It makes absolute sense.

The market for Bitcoin-backed loans is growing and more players are entering this space: from new startups to established banks.

This will bring down the annual interest rates (currently in the 7%-12% range) to the level you are predicting.

It may take some time, but we will get there. It's inevitable unless we reach Bitcoin mass adoption earlier. 😉

Disclosure: I work for Firefish.io, a non-custodial, p2p, platform for Bitcoin-backed loans.