What large fees on prepayments? I've been searching around the LC site and I'm not sure what fee you're talking about

They call it the "servicing fee" or something like that. They charge 1% of each payment, without regard to the allocation of the payment to principal or interest.

If a borrower borrows $1000 and then pays it off immediately, there is no interest (well maybe a day or two of interest, but it is inconsequential), and the single pament is $1000 (plus a day or two of interest), and LC would subtract $10 for servicing.

For a loan which runs to term, the lendingclub servicing fee could end up being on the order of 5% of the interest you earn, but on a prepaid loan, the servicing fee can be several times LARGER than the interest you earn.

Prepaid loans reduce your return by any reasonable measure.