In a blast from the past (In particularthis entry) I mused on whether participating in "Prosper" or other lending club web site would be a good choice. I never wrote more on it as I never tried it. Don't know if it was fear of the unknown, inertia, or just what, but I passed on it, and then just forgot it. I guess other things were on my mind then (like getting divorced!).
Anywho, this was brought back to me today as I was reading personal finance forums and there was a long thread on Lending Club, Prospr, and the like. From what most people wrote, it turned out that while they did make money with the sites, it was not nearly as much as they hoped, and that over time the payback tended to get worse and worse, and now most people were just cashing out and wouldn't bother with it any more. And their returns in the past years had usually been less than 10%, often only a few percent a year. Now they were saying how they lost out on having that money in the market in the run up of the past years.
I suspect the first couple of years would have done well, but with interest rates so low only the desperate would use these sites any more. And it turns out they do a very bad job (or no job) of getting the outstanding debts.
Turns out most fads are just passing fads and a waste of time and money. I guess the lending club model (at least here in USA) was a passing fad I'm glad I passed on.