I have made loans to 80 people through Prosper. Most are $50 loans - I don't like to make large loans to just one person. I take the advice given on prosper, to make many small loans rather than a few large ones.
At this time three of these loans are totally paid off, 77 are active, and 2 of the active loans have been charged off. Those two are over four months late and the collection process is now beginning (I may yet recover some of the loss). Even with the two charged off, a loss of almost $100, the average return on my investment right now is over 16%. That contrasts rather favorably with the investments I have made in the stock market, which I am happy to say were not huge numbers. That is, I did not invest much in stocks.
Right now prosper is going through the process that will allow it to offer a reselling program. This program will allow us lenders to sell our loans to others if we need some quick cash or want to invest somewhere else. This process takes a while and while it goes on we can't make any more loans. So the money that is collecting in my prosper account can't go anywhere right now. I could send it back to my bank but I am not sure I will do that yet. So this isn't an ideal time to start an account on prosper - I am not sure it is even possible.
Another peer-to-peer lending company, Lending Club, has been through this process and now does offer the ability to resell loans. I haven't tried it yet, don't know the limitations, the pluses and minuses. I understand that I can now go back to making a few more loans on Lending Club so I probably will do so.
None of this means much in the face of a huge tax bill I have yet to finish paying...