Peer-to-peer (P2P)

Peer-to-peer (P2P) lending is a form of lending in which borrowers and lenders can meet directly via an online platform and attain better rates since there is no middleman such as a bank in between. It is an alternative method to financing.

How P2P Lending in India Works?

P2P Lending companies in India work by bringing together borrowers and lenders on a common platform. Lending can be done directly between both parties.

By doing this the middle man, such as banks, are cut out which allows investors to earn a healthier return from principal and interest payments while aiding borrowers to achieve their goals.

For p2p lenders in india, the process begins when they sign up to the platforms and invest their surplus funds post completion of documentation. For borrowers, the process starts by signing up on the platform and providing basic documentation such as identity proof, and post this a credit check is done on the borrower.

If the borrower has a good credit score then the platform will offer them a lower rate whilst if there is no credit score or a low credit score the rate offered will be higher. The platform enables investors to make selections on which borrower they would like to lend to based on their risk appetite.