Dolores Booth, the Huntersville lender, is pleased with the 15 percent return that her Prosper loans are generating. "You can't get that from a bank," she observed.http://www.lendingstats.com/lenders/Vivalucero
She has put about $5,000 into 22 loans, funding portions of requests for homeowners with "A" credit ratings. One of her borrowers is a month late on a payment, but Booth thinks she'll catch up soon. "She's not going to ruin her credit," Booth said.
Besides, Prosper is just a small part of her nest egg, which includes a money market account and IRA. Booth likes tech stocks but avoids CDs because of their low return.
Prosper carries its own risks, she acknowledges. "It's a lot like gambling," Booth said last week as she considered making a 23rd loan. Her cat, Lacey, stretched on the floor, and CNBC played on TVs in the living room and kitchen. "You don't know if they're going to pay you back, but you take that chance."
Booth, a retiree and widow, likes the idea that her loans are giving others a leg-up. Most borrowers turn there, she believes, to secure lower interest rates than the banks would charge. According to the borrowers' profiles, her loans have helped people pay college tuition, remodel homes, buy inventory for small businesses and pay off credit cards. She was especially moved by one profile of a man who says he's a single dad with 10 adopted sons, in need of $15,000 to buy a business. At the end of October, she put $400 into his loan.
According to LS...she's not doing much better than those CDs she doesn't like, and that's not registering her $400 bid which just went late as noted in this thread: http://www.prospers.org/forum/anyone_up_for_a_feel_good_loan-t3592.0.html
If that one doesn't come current, her returns will completely disappear.
Overall, though...it was one of the better articles I've seen.