Good points about diversification. A few hundred dollars across several loans is not enough. A person will either achieve an outstanding return or a terrible return without investing in 30-50 loans like you recommend.
By the way, since Lending Club allows $25 loans, a lender can have double the diversification on the same amount of money. So to spread you money across 60 loans only takes $1,250. That is one of the reasons that I started lending with LC instead of Prosper.
[…] After the loan opportunity has been posted, lenders or investors will browse through and see if they want to take that risk. Most of the current P2P sites allow sharing of loans so that the risk is spread around. For example, if someone needs a $9000 loan, instead of one lender offering the whole amount, thirty lenders may each provide $300. The interest rate payments will be equally divided among those lenders based on much of the loan they purchase. As with everything make sure you diversify, ideally you would want AT LEAST 30-50 separate loans. […]