Lending Club is a person-to-person lending service that allows its members to directly invest in and borrow from each other. The theory is that it avoids the cost and overhead of the banking system, and thus provies better returns for the investors and lower rates for the borrowers. There is risk for the investors, and it's not FDIC insured. For those looking for higher yields and don't mind the risk, it's something to consider.
For invetors who have at least $5,000 and who don't want to pick borrowers, Lending Club offers what it calls the PRIME account
in which Lending Club's Investor Services team helps to administer your Lending Club account.
The Debt Kid has a review
of his experience with Lending Club's PRIME account. He made a large investment of $100K. So far he has received good returns in the last 3 months. There are risks that he'll see defaults as the loans age. My Money Blog has reported
higher defaults and lower returns as the loans age.