In early 2008, I jumped on the peer-to-peer lending bandwagon and started making loans on Prosper. I made 34 loans that year and continued to make more loans with the money that was coming in every month. Seven more loans in 2009 and 4 more this year for a total of 45 loans worth approximately $2,000. My projected average return was 14.85%
But through 2008, I had 8 defaults and I was instantly in the hole. On top of the defaults, 7 people paid off their loans early so I didn’t make much interest off of them.
Two and a half years later and I just logged in to Prosper and saw a profit for the very first time! I’m now up $20.65 with 27 active loans remaining (though one of those is over 30 days late and will probably default). Still, with over a year to go on most of these loans, that profit should continue to creep up.
Overall, I don’t consider it the greatest investment I’ve ever made because it’s been hard to have that money tied up for three years at a time. And I wasn’t happy with all the defaults, but we were going through a really tough time economically so maybe it wasn’t the best time to be loaning out money to strangers 
I’m happy to be turning a profit no matter how small, but I won’t be putting any more money into Prosper at this time. There are just too many things that Bird and I are saving for, so I will continue to withdraw the payoff money as it comes in and transfer it to our various savings accounts.
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I used Prosper too and did not have much luck with them although I did not have anyone go into default. I also invested in Lending Club and have had MUCH better results to the point where I am now funding a new $25 loan every month. I am also withdrawing all money from Prosper but will continue to use Lending Club.