P2P Lending Terms Scanner

Analyze personal and P2P lending terms for origination fee stacking, prepayment penalties, default definitions, and debt sale provisions.

Built by Sergei Tokmakov, California-licensed attorney.

LendingClub Prosper Upstart SoFi

Lending Provisions I Check First

Online lenders have aggressive fee structures and default triggers. These provisions have trapped borrowers in debt cycles they didn't anticipate.

Origination Fee Stacking

High Risk

Origination fees (1-8% of loan) are deducted upfront, meaning you receive less than the loan amount but pay interest on the full amount.

Look for: "An origination fee of [X]% will be deducted from your loan proceeds. Your APR includes the origination fee."

Prepayment Penalty Structures

High Risk

Some loans charge penalties for early payoff, or front-load interest so early payments don't reduce principal significantly.

Look for: "Early payoff may result in a prepayment fee. Interest is calculated using the Rule of 78s [or similar method]."

Credit Score Impact Timing

High Risk

Hard credit pulls happen at application, affecting your score before you even accept the loan. Multiple applications compound the damage.

Look for: "A hard credit inquiry will be made when you submit your application. This may affect your credit score."

Debt Sale to Third Parties

High Risk

Your loan can be sold to aggressive debt collectors, who may sue for the full balance plus legal fees if you fall behind.

Look for: "We may sell, assign, or transfer your loan to third parties without your consent."

Default Definition & Acceleration

High Risk

Default can be triggered by a single missed payment, making the entire balance due immediately. Cross-default provisions can trigger default on other debts.

Look for: "Default occurs upon any missed payment. Upon default, the entire outstanding balance becomes immediately due."

Borrower Data Sharing

Medium Risk

Your financial data, including bank account transactions, may be shared with marketing partners or used for credit model development.

Look for: "We may share your information with affiliates, marketing partners, and for credit modeling purposes."

Standard Legal Provisions

Common terms in P2P lending agreements affecting borrower rights.

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Arbitration Clauses

Disputes resolved through arbitration.

👥

Class Action Waivers

Cannot join group lawsuits.

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Late Fee Structures

Fees for missed or late payments.

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Credit Reporting

Payment history reported to bureaus.

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Rate Variability

Variable vs. fixed rate terms.

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Cosigner Terms

Cosigner obligations and release options.

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Income Verification

Ongoing income verification requirements.

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Collection Rights

Legal remedies for non-payment.

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