Well early payments are better than defaults but not as good as reliable payers. They effectively reduce the total pool so the defaults represent a higher percentage of the loans remaining.
I have suffered 4 in Jan, 4 in Feb, and 5 so far in Mar out of 240 active loans. It's a lot and it appears to be getting worse.
I lost an AA last week to this same rash.
If you're a reinvesting lender, early payoffs act as a kind of Gresham's Law (especially in a declining interest rate environment) because the borrowers whose finances are improving can get better rates will pay off.
But the borrowers that are hitting hard times will not pay you off, neither will they off you 5% more interest to compensate you for the increased risk.
All the loans that paid you off were good picks--but now you have to reinvest.
When you reinvest, you will naturally pick some loans that, 6 months in the future from now, will improve and others will deteriorate.
The good ones will pay off, the bad ones never will. Reinvest.
Keep doing that, and you'll eventually you'll have only bad loans in your portfolio.
So payoffs are bad
for reinvesting lenders. But if you're just trying to get your funds out of Prosper--I can understand liking the payoffs.