How much does it cost?
Signing up for a Folio Investing Note Trading Account is free of charge. Folio Investing charges the seller of a Note a transaction fee equal to 1% of the purchase price of the Note. The transaction fee is charged once the trade has settled. If a trade is canceled, no fee is charged.
Folio Investing does not charge a fee to the purchaser of a Note. However, Lending Club charges a fee to each Note holder. Lending Club charges a fee of one percent (1%) of the amount of any payments received within 15 days of the payment due date from the Borrowers on the loan corresponding to the Note.
Lending Club will charge investors one of the following collection fees, which will be deducted from any amount recovered:1) 18% of the amount recovered if the loan is 16 or more days late and no litigation is involved, or 2) 30% of hourly attorneys’ fees, plus costs, if litigation is involved. These fees are deducted by Lending Club from the payment proceeds at the same time (or immediately after) they are deposited into the Note holder’s Lending Club account.
Please note that the collection fee described above is a reduced collection fee, which may be discontinued at any time. The normal collection fee is a percentage of the amount recovered: 30% if the loan is less than 60 days past due and no more than 90 days from the date of origination; 35% in all other cases, except litigation; 30% of hourly attorneys’ fees in the event of litigation, plus costs.
Folio Investing plays no role in processing payments from Borrowers or in servicing the Notes.