Consumer complaint received 2025-09-06 00:00:00
Product: Payday loan, title loan, personal loan, or advance loan — Payday loan
Issue: Can't contact lender or servicer — 
Company: SoLo Funds Inc.
State: FL

Complaint narrative:
On XX/XX/year>, I signed up to become a lender on SoloFunds platform. I chose to do so with this platform because I agreed with their peer to peer lending methods, as well as supporting them as an alternative to predatory loan companies with extremely high interest rates. I did this also in hopes of making a small financial gain while handing out interest free loans, hoping to profit from the small optional " tip '' that a borrower may opt to give the lender. I enter XXXX XXXX XXXX service on the XXXX of XXXX, and would like all of this figured out before then. 

Upon funding a few loans, it became apparent to me that how they described the manner in which their " insurance '' works was not how it actually worked out in reality. I was in fact losing money by purchasing insurance, thinking it goes into effect after a loan becomes delinquent, when in reality it goes into effect once a borrower enters the grace period. Even if a borrower pays back during the grace period, SoloFunds keeps their money and the tip. A lender effectively loses 16 % of their original investment even when a borrower pays back within the grace period. SoloFunds is profiting off of their unclear and misleading descriptions and explanations of how their internal mechanics work. I have tried making contact, only to receive minimal information. And as of now, they have ceased communicating with me. 

Below is my final email to them, which they have not replied. It lays out exactly what the problem is, I will attach images in the " documents '' box. 

-- -- BEGIN EMAIL SLP is only mentioned one time within your Terms of Service and they do not explain the mechanics to which you have explained. This does not suffice. Throughout your platform, verbiage is inconsistent, and explanations are incomplete. 

Lets look at your Terms of Service - The only mention of SLP in this document talks about loans repaid within the grace period. If a loan is funded with SLP then it will not be subject to the 12 % recovery fee. That is the only mention of it, nowhere does it say that loans paid within the grace period, but funded with SLP, will only be refunded the 90 % plus donation, and will not be reimbursed the full amount if the borrower repays. 

Now lets look at your Loan Agreement that every lender receives following their funding of a loan - Your organization describes a borrower being deemed in default if they fail to pay timely any amount due on the loan. What exactly is timely? In that same document, a late fee is adjudicated if the borrower fails to pay within 35 days after the funding date. So is it untimely after the 35 days? This is important as we consider to examine the documents. 

On your Blog there is a post titled Understanding Fees on SoLo Funds as You Lend. It is important to note that this is one of your most publicly available documents, that is available to help lenders understand certain things before funding loans. This post defines what a Grace Period is which is 20 to 30 days after the loan was funded. For nearly every lender on earth, their understanding of a grace period, means that a borrower is in grace and will still pay in a timely manner. SLP is also discussed within this post, stating that it is 6 % of [ the ] principal ( optional insurance to cover NON-REPAYMENT ) your verbiage here is important to note as we continue. 

Finally lets look at the options one has when they go to fund a loan. When you click on the option to Add SoLo Lender Protection it states that If the loan becomes DELINQUENT, SoLo credits you 90 % of principal + donation. Notice how delinquent is used here. A loan is not delinquent if it is in grace, during a grace period. 

Here is what your platform is doing : You are deliberately misleading lenders who are using this insurance to protect themselves from NON-REPAYMENT. You state that it protects from delinquent loans. In reality, you are paying out the insurance to a lender, effectively buying out a loan like a collections agency would, even if the loan is still in a grace period. If the borrower pays back while being in grace for even just one day, you keep the profits and tip paid, that the lender is owed because they took the risk. If this was truly insurance you would either not pay it until the loan was no longer in grace, or you would front the 90 % and donation to the lender, and then add the remaining tip and 10 % once the borrower paid. This structure appears designed to exploit ambiguity in your own policies, resulting in consistent financial disadvantage to lenders, even when borrowers pay within grace. 

It seems clear that that this structure materially increases your platforms earnings at the expense of insured lenders- which likely is amounting to significant sums. It is deceptive and unfair. The CFPB cares about principles of fairness, and this may raise concerns of a UDAAP. I will also release my findings on public platforms if I do not receive a response, which could do a great deal to your reputation. 

I want to reiterate that I wholeheartedly agree with your business model and support towards the disadvantaged. However, you are simultaneously taking advantage of lenders, and profiting off of their expense. 

-- -- END EMAIL

Company response to consumer: Closed with explanation