Peer To Peer Lending

I was watching CNBC and they discussed an interesting concept that has gained momentum during this credit crunch: Peer to peer lending. In other words, there are websites that allow individuals to lend to others individuals. The borrowers have 660+ FICO scores and provide a description of why they need the loan. Supposedly the default rate is below 1%.

Note: I haven't tried this out at all, but I'm thinking about trying the lending side with CD rates plummeting. It sounds like a win-win. Borrower gets a lower rate and a LOAN. Lender gets an above average rate of return.

I'm sure there are plenty of other competitors, but has anyone tried this? Or know of other competitors?

http://www.lendingclub.com/home.action