You are able to earn monthly interest based on the loans given to borrowers that you invest in. Historical returns on Prosper average 5.3%.

Investors will have to pay a 1% loan servicing fee annually on their outstanding principal balance. They also make money on late fees that are charged to the borrower once the loan is 15 days past due. The fee is 5% of the loan amount or $15, whichever is greater.

Prosper does not guarantee repayment of loans and the risk of default is placed on the investor. Investments in Prosper should also not be considered highly liquid, even if there is a secondary market for the loans.