Firstly, there is a risk of default, and as we have just mentioned this would not be covered by any government support. While several peer-to-peer lenders have contingency and provision funds, the risk is still clearly higher than with a traditional high-street bank, for example. Another potentially serious issue is that the peer-to-peer lending site that you choose could go bust. Several such companies have gone out of business previously, which is why we have recommended several of the best current peer-to-peer lenders here. For one, many investors love the peer-to-peer lending arrangement by virtue of its good profits. They get to rake in some nice interest rates from their investments while the borrower gets a loan at low cost. In fact, the interest you get from peer-to-peer lending deals could well be higher than what you could get by investing with banks.