P2P LENDING
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P2P Lending

Peer-to-peer (P2P) lending enables individuals to obtain loans directly from other individuals, cutting out the financial institution as the middleman. Traditionally, banks and other financial institutions collect money (through savings accounts or deposits like fixed or recurring) at low-interest rates (say 2-8%) and lend it to borrowers at much higher rates (8-12%). This margin goes into paying for the high costs they incur like thousands of employees to pay salaries to and hundreds of swanky branches to maintain and so on.

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P2P brings borrowers and lenders directly in touch with each other, removes the intermediary cost and enables borrowers to access faster and cheaper credit, and enables lenders to make greater returns on funds lying idle in bank deposits. P2P lending websites connect borrowers directly to investors. The site sets the rates and terms and enables the transactions. P2P lenders are individual investors who want to get a better return on their cash savings than a bank savings account or CD offers. P2P borrowers seek an alternative to traditional banks or a better rate than banks offer.


Eligibility Investment Limit Maturity Interest Rate Tax treatment
Anyone can Invest Min – Rs 10,000
Max – Rs 50 Lacs 		No Lock – in. – to 36 Months 9- 12 % p.a . Taxable in the hands of the investors.