SoLo Funds is a loan app that offers both small-dollar lending and borrowing services.
As a lender, you decide which loan requests to fund. However, user reviews state that nonrepayment of loans is common. This can hit your pockets hard unless you take measures to minimize the risk.
Note: This review focuses on SoLo Funds’ lending services. For prospective borrowers, our SoLo Funds Borrow review can determine if it’s the right borrowing platform.
| Pros | Cons |
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Provides lenders with a year-end statement for tax reference
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Does not provide in-house tax advice to lenders
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Lenders can choose which loan they wish to fund based on their parameters
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Doesn’t guarantee loan repayment for lending members
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Ability to check a borrower’s score and repayment history before lending
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Charges significant in-house and third-party recovery fees
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Who SoLo Funds Lend Is Best For
If you have enough capital and want to help people out, you can fund borrowing requests from other members on the Solo Funds platform. Remember, though, people often default on these loans, which means you could lose any amount you lend without lender protection. So if you’ve got a good heart and a healthy bank account to match, it could be a way to do some good. Just don’t expect it to replace your regular investment earnings.
Who SoLo Funds Lend Isn’t Right For
SoLo Funds is not a strong good investment because you could lose the money if the borrower doesn’t repay, and debt collection efforts aren’t successful. Unfortunately, this is a relatively common occurrence, according to user reviews. As such, SoLo lending isn’t a good option for lenders who don’t have an excess of funds to risk in an unpredictable borrowing system.
Featured Partner Offers
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Upgrade Personal Loans
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SoLo Funds Details
SoLo Funds is unlike most other community financing programs. It has a unique set of criteria for prospective members. First and foremost, lenders and borrowers are required to fulfill the basic requirements for having an account with SoLo Fund. However, lenders must fulfill additional requirements to qualify.
Eligibility for Lenders and Borrowers
To become an eligible lender for SoLo Funds, you’ll need to:
- Be at least 18 years old
- Be a U.S. citizen or permanent resident with a 10-year nonconditional card
- Must open an account at Evolve Bank & Trust to process transactions
- Must be able to accommodate repayment and collection fees charged by SoLo Funds
To lend money, you can’t have a SoLo Funds loan out yourself. If you do have one out, you’ll be eligible to lend money to other borrowers as soon as you pay it off.
Borrowers, on the other hand, must:
- Be at least 18 years old
- Be a U.S. citizen or permanent resident with a 10-year nonconditional card
- Have a bank account with a debit card that SoLo Funds supports
When a borrower applies for an account, SoLo Funds runs a soft credit check, which does not damage their credit. While their credit score doesn’t impact their eligibility, it feeds into their SoLo Score—a proprietary in-app credit score that SoLo Funds creates to help lender users decide whether they’re comfortable lending money to a borrower.
Lending Amounts
Lenders have more flexible limits than borrowers. There are no fixed limits on how much you can lend. Instead, lending limits are imposed by Evolve Bank and fluctuate based on the volume of transactions going in and out of your account. But we caution you to limit your lending to any amount you can’t afford to lose.
Fees
For lenders, there’s only one optional upfront cost: SoLo Lender Protection (SLP). This option recoups a portion of your money back if the borrower doesn’t repay you. It costs 5% of the loan amount (i.e., $5 for every $100 you lend). Some loans aren’t eligible for SLP, such as if the borrower has a SoLo Score under 50 and hasn’t set a tip amount of at least 5% to offset their higher-risk loan.
If the borrower doesn’t pay by the due date, you’ll get SoLo credit in the amount of the loan principal, plus any pre-set donation amount from the borrower. It’s important to note that you’ll be refunded in SoLo Credits that you can use to make another loan to someone else, and these credits never expire. You won’t, however, get that money back as cash deposited in your bank account without making another successfully-repaid loan.
Fees for Late Payments or Defaulted Loans
If you’re a lender and you didn’t purchase SLP, here’s what’ll happen if your borrower pays late, based on how many days it’s been since the loan was first disbursed:
- Up to 35 days post-disbursement. You’ll receive 100% of your funds back, plus any lender tip. SoLo Funds will also give you the donation the borrower had specified to go to them.
- 35 days post-disbursement to 90 days past due. You’ll receive your funds back plus the 10% late fee—or the principle of the loan if it’s higher—and any tip and transaction fee that the borrower paid. Your funds will be returned to you, but SoLo Funds will take a 30% cut to cover the cost of recovering the money.
- 90 days or more past due. SoLo Funds will ban the borrower from the platform and transfer the debt to a collection agency. If they can retrieve your funds (loan amount plus late fee, transaction fee and tip), they’ll take up to a 30% cut as their fee and return the remainder to you.
How SoLo Funds Works
SoLo Funds is a peer-to-peer lending platform consisting of borrowers who want to borrow money and lenders that can lend money to those borrowers. To apply, you can access the application online or via an app.
Borrowing requests, which are made on the platform, include:
- A profile picture (optional)
- First name and last initial of the borrower
- A viable reason for the request
- The requested amount ($25 to $100 at first but can reach up to $575)
- An estimated repayment date (up to 35 days)
- Additional lender tip
- The borrower’s SoLo score, based on their credit score, bank account usage, SoLo Funds repayment history and social media information
If a borrower’s request isn’t fulfilled within three days, it’ll automatically cancel and the borrower will have to create a new request.
Lenders can choose which borrowing request fits their capabilities. From there, SoLo Funds move funds from the lender’s account to the borrower’s account. This process can take about 20 minutes after a lender agrees to fund a borrower’s loan.
From there, the borrower merely has to repay the loan as agreed. If they fail to repay, a borrower will be subjected to late payment or default fees.
Regardless, SoLo Funds reports any borrower payments that borrowers make to the credit bureaus. A good repayment history can build a better credit score, a better SoLo Funds score and grant access to higher borrowing limits.
Customer Reviews
Customer reviews for SoLo Funds are mixed.
As of August 8, 2023, the SoLo Funds has 1.23 out of 5 stars on the Better Business Bureau (BBB) website, based on 62 customer reviews. Many lenders complain about excessive fees, falsely-advertised default rates and poor customer service. Lenders also state that they were never reimbursed for their loans after the transaction.
Reviews on the Google Play and Apple iTunes stores (both 4.4 out of 5 stars) were better, with lots of users stating how helpful the loans were, although there were still reports of lenders not being paid back in full.
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