One thing that I have noticed about Prosper is the high number of high risk borrowers. These people can't get loans in traditional places so they come to Prosper with hope. Some come with unreal expectations and some are put out when they don't get the loan. Not everyone is there because they can't get a loan someplace else and I'll cover that tomorrow.
Here's a loan that was hard to pass up. A guy came to Prosper to borrow some money. Borrowers set the interest rate of their own loan. You can look at your credit score and see what the average interest rate is for your risk category but you can set it at whatever amount that you want. So this guy set the interest rate at 0% for his loan. I can't remember what amount of money he was asking for. It doesn't really matter since he didn't get a single taker. I guess it doesn't hurt to try but why in the world would you lend money to a stranger at 0%? And why would you lend money to someone who doesn't understand that? In his loan description, he went on and on about being a Mason. This supposedly made him low risk and exempt from interest.
Borrowers who don't get funding can ask lenders on the forum why they aren't being funded and lenders will jump in with answers. Like all tools, there is good and bad to this. The good part is that honest people can take the advice and improve their credit, their financial situation, and their listing. The bad part is that not honest people can learn how to tweak their listing to attract lenders.
I read one listing a couple of weeks ago and couldn't see why this person was borrowing money. I told her that with her financial situation, she didn't look like she needed a loan. She was trying to consolidate her credit cards but she had enough money to pay them all off in 6 - 8 months. A couple other lenders gave her the same advice. Why pay the origination fee and get into a 3 year loan when you could be done with it all in 6 months. She insisted that she wanted the loan. It made me wonder what she wasn't telling us.
Prosper has been a great learning experience.