Download Now
August 21, 2025

Understanding Fees on SoLo Funds as You Lend

Lending on SoLo Funds offers more than competitive returns — it gives you a direct way to create impact while generating income. But to maximize those returns, it’s important to understand the fees involved and how they fit into the lending timeline.

This guide walks you through every potential fee, from the moment you make a loan to the final repayment — including how these costs compare to yield-generating alternatives like stocks, ETFs, or crypto.

The Lending Timeline: From Funding to Recovery

1. Loan Funding & Donation Fronting

When you fund a loan, you’re providing both the principal amount and fronting the SoLo Donation on behalf of the borrower:

  • You fund: Principal + Tip + SoLo Donation (all borrower-selected).

  • The donation is paid to SoLo by the borrower, but temporarily fronted by you until repayment.

  • At repayment: The borrower pays back the full amount, you keep the principal + tip, and the donation goes to SoLo.

Example:

  • Loan principal: $100

  • Tip: $10

  • SoLo Donation: $8

  • You fund: $118

  • Borrower repays: $118 total

  • You receive: $110 (principal + tip), SoLo receives $8 (donation).

2. On-Time Repayment (By Scheduled Date)

If the borrower repays on or before the scheduled repayment date:

  • You receive 100% of principal + tip.

  • The borrower’s donation goes to SoLo.

  • No additional fees apply.

3. Grace Period Repayment (20–30 Days From Scheduled Payment Date)

The grace period begins immediately after the scheduled repayment date and lasts 20–30 days depending on the loan’s length.

  • For new lenders with fewer than 100 loans funded, no extra fee applies (the SoLo Fee is waived).

  • For all other lenders, a SoLo Fee of 12% of principal applies only on non-SLP loans repaid during the grace period.

Example (with SoLo Fee applied):

  • Loan principal: $100

  • Tip: $10

  • SoLo Fee: $12 (assessed when payment is late)

  • You receive: $98 ($100 + $10 – $12).

4. Post-Grace Period Recovery (After GP Ends, Before 90 Days)

Loans repaid after the grace period but within 90 days of the scheduled payment date incur additional deductions:

  • Recovery Fee: 30% of principal.

  • Late Fee: 10% of principal (paid by borrower, goes to you).

  • Transaction Fee: Borrower pays 2 × [(0.009 × principal) + $0.70] to SoLo.

Example:

  • Loan principal: $100

  • Tip: $10

  • Late fee (10%): $10 (to you).

  • Recovery fee (30%): $30 (deducted).

  • Borrower also pays ~$2.48 transaction fee to SoLo.

  • You receive: $90 ($100 + $10 + $10 – $30).

5. Default Period (90 Days After Scheduled Payment Date)

If the loan isn’t repaid within 90 days of the scheduled payment date:

  • It goes to third-party collections.

  • Recovery chances drop significantly.

  • Collection agencies retain up to 30% of recovered funds.

Other Lender Fees on SoLo

Here’s what you need to know about fees you might pay as a lender:

  • SoLo Protection (SLP) Fee: 6% of principal (optional insurance to cover non-repayment).

  • Instant Withdrawal Fee: 1.75% (optional, for immediate access to wallet funds).

  • ACH Withdrawal: Free (standard 1–2 business days).

  • SoLo Fee: 12% of principal (applies only on loans repaid during the grace period if no SLP is used).

All costs are transparent and shown before you lend.

How This Compares to Yield-Creating Alternatives

Unlike traditional credit products, SoLo isn’t about extracting interest — it’s a peer-to-peer model where borrowers and lenders both benefit.

  • Stock & ETF Portfolios: Average long-term returns of 6–10% annually, with volatility and no direct social impact.

  • Crypto Investing: Potential for high returns (or steep losses), with volatility and no borrower connection.

  • SoLo Funds: Potentially higher monthly returns with consistent lending, plus the ability to diversify your risk while directly impacting real borrowers.

According to the Cash Poor Report, nearly half of Americans are financially fragile — making transparent lending models like SoLo not just profitable but socially critical.

The 3-2-1 Lender Strategy

Whether you’re lending $100 or $100,000, how you build your portfolio impacts both returns and the health of the marketplace. The 3-2-1 Strategy is a framework used by SoLo’s top lenders:

3️⃣ The Daily Player

  • Risk: Low at 20+, Returns: High

  • Capital: $5K+ | Engagement: 10+ app opens/day

  • Focus: High-score loans (76–99), high tips, minimal SLP

  • Best for: Active users seeking significant additional income

2️⃣ The Balance Scorer

  • Risk: Moderate, Returns: Mid

  • Capital: $5K+ | Engagement: 2–3 app opens/day

  • Focus: Mix of high and mid-score borrowers, some SLP usage

  • Best for: Consistent returns with less time commitment

1️⃣ The Impact Builder

  • Risk: Moderate, Returns: Lower but steady

  • Capital: $1K+ | Engagement: 1 app open/day

  • Focus: Diversified borrower base, heavy SLP use

  • Best for: Low-stress lending with modest gains

Sample Portfolio Using 3-2-1:

  • 3 loans: Scores 71–99, high tips, no SLP.

  • 2 loans: Scores 60–79, SLP used.

  • 1 loan: New borrower with compelling story.

Key Takeaways

  • Grace period lasts 20–30 days depending on loan length, starting immediately after the scheduled due date.

  • SoLo Fee applies only on grace period repayments of non-SLP loans.

  • Post-grace recovery includes a Recovery Fee, Late Fee, and Transaction Fee.

  • Defaults occur 90 days after the scheduled payment date.

  • Use SLP + 3-2-1 Strategy to balance returns and reduce risk.

  • With SoLo Funds, you’re not just lending — you’re building financial access for real people while generating returns for yourself.

Share on Facebook