zcommodore

Yes, it happens once in awhile.  A borrower comes to Prosper and asks for the maximum at a high rate and actually pays it off.

This morning, I had one borrower do just that.  About a year and a half ago, in IRC, Bama told me he wouldn't pay for another 6 months, that he would default.  I didn't save the log so I can't prove it but, suffice it to say, he was wrong.  At any rate, since pensioner had over $18K of that loan, I'm sure he's happy with the results.

I did a bit of checking on ericscc.com and found that between Prosper's launch and the end of February 2007, 24 borrowers were successful in getting $25K loans at rates 25% or higher.  Of those, 10 are current, 5 are paid and 9 are 1-month late or worse.  Obviously, with rates even 25% or higher, if 37.5% default, you're not going to make any money.  And, incidentally, I was on one of those defaulted loans as well.  In that case, the borrower declared bankruptcy and it was recently finalized.

Oh, and one other thing, the borrower I had who paid in full got a new loan for nearly $22K at 35% about a month ago.  I have no idea how he's going to make any money paying those kinds of rates but he seems to think it's possible.  I wasn't aware he was seeking a loan until just the other day when I saw his previous one was paying off.  All I can say is, "good luck" to his new lenders.