P2P lending enables individuals to borrow and lend money by excluding the intermediary – official financial institution. Peer-to-peer is a new type of lending which removes the intermediate from the process however it involves more risk and time than standard lending ways. P2P lending can be also named as social lending, because lenders and borrowers meet at a particular lending-borrowing platform where they can fulfill their investing needs and desires. The main advantage for lenders is that they can generate higher income from such investments than they could from traditional products (savings accounts, investments in bonds or stocks). For borrowers P2P lending gives an access to funding they could not get from standard financial institutions. Investors who search for different alternative investment management strategies choose peer-to-peer lending because of high ROI. Borrowers choose P2P lending for its low loan rates and possibility to get out of a short term debt.  However, this method has a disadvantage as long as the lender has a very little assurance about the borrower, who might have been rejected by several financial institutions due to high likelihood of defaults. Currently, many online lending companies have been established, however not all of these P2P lending companies have applied thresholds for borrowers such as collateral. Also long storied lending history is necessary when you are choosing a P2P company. As with any asset class, peer-to-peer lending should be viewed as a higher – risk component. Such an alternative investment management products seem to be more attractive than they were 6 years ago. It is recommended that investors diversify their peer-to-peer loan holdings by investing in a portfolio, which consists of at least 100 different loans. Almost always minimum investment in peer-to-peer loan starts from $15, so as an investor you should consider a 100 loan portfolio which would cost at least $1500. Also investors should regularly check their accounts and reinvest the cash if it earns nothing. It is not known exactly how peer-to-peer companies rate the creditworthiness of their borrowers. However, if P2P lending companies screw up, nobody will use them again. So, they have plenty of incentive to guarantee that borrowers will repay loans with high ROI.