RE: Full disclosure and $25

That is how I started, a couple of hundred at a time until I had a good feel for the site. Your questions about why the AA or A borrowers don't go to a bank for a better rate is a really good one. I have AA credit with no delinquencies. At my bank, which happens to be Wells Fargo, the current rate on a 36 month unsecured $10,000 Personal Loan is 11.44%. This varies by State and loan amount - they have a tool on their website that helps you calculate the current rate. For home loans the rates are less, but there are also upfront fees, and not everyone is a home owner. For car loans you can also get a better rate, but not everyone with A or AA credit has a car that is completely paid off to use as collateral. You can see the average loan rates for Prosper here.

I think what you will find is that Prosper rates end up being very comparable to loan rates that you would get from a bank on a Personal unsecured loan. I have funded loans to AA borrowers for between 8.5% - 12% which seems right in line with what banks charge. Also, I am wary of giving loans to people who are trying to use it for buying a house or something where they should be able to find traditional financing - I prefer loans where people are doing things like refinancing their credit card debt at a lower rate.

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