Why Peer-to-Peer Lending is becoming so popular?

Answer 1

because Peer-to-Peer lending aims to provide better returns for the lenders than from a bank deposit account while offering easier access to credit for borrowers. P2P lending offers returns in 8-14% range and offers the possibility of earning even more than 14%. Consumers want to settle their credit card debt .People are trying to pay off their credit card debt because rates can routinely climb to alarming figures if a borrower misses even a single payment! Thus people have the benefit of debt consolidation. Banks are still not lending freely
Bank credits remain at an all-time low! Personal loans are difficult to obtain while home equity loan (a popular form of borrowing until the last decade) was marred by the financial crisis. Small businesses are also reeling under the effects of the crisis. Hence, business owners continue to look for alternative means of financing.P2P industry is gaining credibility.
The coalition government in the UK has brought unexpectedly good news for P2P platforms indicating P2P would qualify for up to GBP 100m in government investment as part of its efforts to boost the country's weakened credit supply. P2P lending, having moved beyond GBP 2 billion in originations, is finally seeing the light of day offering more advantages to both borrowers and lenders!