Jeremy Lustman is not a dumb guy.
When he told me that he didn't understand my explanation of how to make money using Prosper, I figured...don't blame the reader, blame the writer. So, I'll try again.
Let's say you are paying off a high interest (29%) credit card loan of $5,000. You go onto Prosper, put in your financial info, and the site conducts a credit history check on you.
Then, you explain why you would like to borrow money and offer up reasons why you are likely to repay.
This is published on the website where individuals like me can offer to lend you money at, say, 15%. I may lend you $100, but if 50 other people do the same, then, bang, you've got your $5,000 at half the interest rate.
Meanwhile, instead of leaving that cash in the bank at 5%, I've tripled my rate of return.
Everybody wins...except the credit card company.
Of course, there's no guarantee that you get your money back (people default), but that's the risk you take for the higher rate. Plus, you can allocate monies across multiple loans to diversify your risk.
Hope this helps....