To become a lender you can deposit as little as £10 with no maximum amount and you can lend up to 5 years. Your details will remain anonymous to the borrower. Lenders are protected to a degree by the Lending Works Shield and insurance which gives some protection whilst reducing the risks involved in peer to peer lending, although they are not backed by the Financial Services Compensation Scheme.
I think peer to peer lending sounds a great idea compared to loan companies. My advice would be to consider carefully any financial lending or borrowing before committing yourself, after all you wouldn't want to stretch your finances.
This post is written in collaboration with Lending Works.