I joined Prosper about 6-7 months ago. Every few weeks I put a few hundred dollars in my Prosper account. To date, I have loaned out just under 3k at an average interest rate of about 17%. After factoring in the expected default rate for my loans, I can reasonably expect to get a 12-13% return on my investment. That’s an incredible rate year after year, if you think about it.

I actually stay away from the sob stories. I believe very strongly in helping those less fortunate than me, but I am using Prosper as a place to invest my money and I keep emotion out of it. If you browse Prosper listings, I think you would see that the majority of bids get placed on loans where the borrower sounds professional and seems likely to pay back the loan. Instead of telling the story of how she could not get a Halloween costume for her daughter, the woman who posted the quoted loan request would have been much better off simply explaining why she was in debt, how she plans on getting out of debt, and how her fortunes are changing so that she will be able to pay back the loan.