WASHINGTON With banks tightening their lending standards and credit card companies raising interest rates, borrowers are increasingly turning to an unusual source of money: other people.

Despite a recent regulatory hurdle, Web sites that facilitate peer-to-peer lending, in which people often strangers lend money to each other with no involvement from a bank, are growing in popularity.

Borrowers usually get loans with lower rates than they would from banks or credit cards, while investors often get higher returns than they would from traditional bank products such as certificates of deposit.

Analysts expect the industry to grow as customers who face rising credit card rates search for new ways to refinance their debt. Many investors, meanwhile, have lost confidence in the rocky stock market and have sought other places to park their cash.

Membership in peer-to-peer lending groups is climbing fast, and so is the money involved.

About $282 million in peer-to-peer loans were made in 2006, according to Celent, a Boston-based research firm. By 2010, the firm expects such loans to grow to $5.8 billion.

The industry has gained so many followers that the Securities and Exchange Commission last year ruled that companies engaging in peer-to-peer lending must register with the agency because the loans are considered securities.

After temporarily suspending their operations for several months, Prosper and Lending Club completed their registrations. Loanio and IOU Central have filed their papers, an SEC spokesman said. Others are expected to follow.

With this credit crunch, the timing couldnt have been better for this industry to really gain a foothold and grow, said Curtis Arnold, founder of CardRatings .com and co-author of the Complete Idiots Guide to Person-to-Person Lending. It offers a viable option for folks who are getting turned down for credit elsewhere.

Since registering with the SEC in October, Lending Club has gained 300,000 members. Last month, it oversaw $3.4 million in loans. Between the time it launched in 2006 and registered with the SEC in July, Prosper has grown to 850,000 members and facilitated $180 million in loans.

Officials at the lending sites said much of their increased traffic has come from borrowers whose interest rates on their credit cards have spiked. Card issuers have been raising rates in anticipation of a new law, set to take effect in February, that could hinder rate increases. Prospers loans can come with interest rates as low as 4 percent. With their credit card debt, it could take 20 years to pay it off, said Chris Larsen, Prospers chief executive.

Prosper allows lenders to bid on the interest rates for borrowers, which results in low-rate loans. Virgin Money codifies loans between friends and families. Other companies specialize in particular types of loans student loans, for example.

The sites typically vet borrowers by pulling their credit reports and requiring minimum credit scores. But the loans do not come without some risk. Lending Clubs borrowers have a default rate of about 3 percent. Prospers default rate is about 5 percent.