This is an important question because if we want to use these lending platforms successfully, then we need for the platform to stick around. In other words, it has to make money so we can make money.
First, Prosper.com makes money on loan originations. When a loan funds through their platform, they charge an origination fee, just like a mortgage company does. This fee is to do the loan and paid upon the loan closing. There is a sliding scale of fees based on the term of the loan and rating that Prosper gives to the borrower. You can see the chart, directly from the Prosper site here below:
So you see the fees range from 0.50% up to 4.95% per loan. As you can see from the chart above that a borrower needs to include the closing fee in the borrowing amount since its taken right off the top.
Like a mortgage company or other loan companies and programs, the p2p lending platforms only make money upon the successful closing of the loan.