The website says you can earn between 9.49% and 12.81% as a money lender...not a bad return for what looks like fairly small risk - assuming you spread your loans out to a wide group of people. Those figures are what lenders received from borrowers with AA - C credit grades and who have had very few delinquencies. As a borrower is allowed to put a picture on the webpage to "solicit" funds - I wonder what impact that can have on a lenders' willingness to fund projects.
Prosper, based in San Francisco, aspires to do for money what eBay did for your grandmother's teapot collection -- create a person-to-person marketplace for consumer loans, and in the process, turn average people into bankers...Since last year when it went live, Prosper has grown to more than 140,000 members and has originated about $33 million in loans. Less than 1 percent of its loans have defaulted; close to 3 percent of its loans are at least three months late.
http://www.washingtonpost.com/wp-dyn/content/article/2007/01/26/AR2007012601722.html
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