A Step-by-Step Guide to P2P Lending Investments in India

Aug 2, 2022

Peer-to-peer lending, also known as P2P lending, is one of many ways to manage liquidity for your company or personal usage. P2P operates as an online platform allowing lenders to invest your money and for borrowers to procure funds for their usage. Borrowers can get funds with ease, while lenders can earn better returns vis-a-vis bank savings or investment avenues.

P2P business model 

The crowd-funding mechanism is the essence of peer-to-peer lending. Majority India P2P lending platforms are NBFC fintech companies (Non-Banking Financial Companies). The P2P model, in contrast to that of conventional banks and financial institutions, is a contemporary credit model to address present day business credit needs.

LenDenClub is an eminent example that offers P2P lending. LenDenClub app is supported by artificial intelligence. Here, you will invest your funds for a predetermined duration and will receive the entire investment back at the end of provided tenure, along with compounded earnings.

P2P lending provides a forum for collecting funds from private individuals, high net worth individuals, and Hindu undivided families (HUFs). P2P lending can rightly be referred to as uberization and democratization of the lending segment.

With LenDenClub’s P2P business model, you can invest in their P2P lending product – ‘FMPP’ short for Fixed-Maturity P2P. The loans are placed automatically among a large pool of borrowers through AI-based infrastructure. Additionally, lenders also benefit from comprehensive credit history checks of the borrowers. The entire process from investments to distribution to maturity is seamless and automated. This provides investors with a comfortable investing experience..

Following are essential prerequisites for the P2P platform and as a money lender, you should always look for them.

Conditions for registering as P2P

  • In order to provide P2P lending services,  the company must be incorporated in India. Further, they need to possess requisite technological, entrepreneurial, and management capabilities. Platforms like LenDenClub, formed in  2014  is a torch bearer when it comes to successful P2P platforms.
  • Organization should be well equipped with sound capital structure.
  • A business plan for the company’s Peer to Peer Lending Platform must be available.
  • Companies must possess Certificate of Registration (CoR) to act in  public interest.
  • They should hold an RBI authorized NBFC-P2P license in order to commence their operations.

How to make your first P2P investment

The following steps will help you make your first FMPP investment with LenDenClub:

  • Create your KYC compliant account
  • Fund your account with some amount, for instance ₹50,000/-
  • Select the amount you wish to invest out of the ₹50,000/- you funded
  • Select the time-frame for investments from 1-5 years
  • Give your final confirmation to invest and your FMPP is created instantly.

While the process seems pretty smooth, let’s see what goes on behind the scenes and how investing with LenDenClub reduces the hassles of what otherwise could have been a time-consuming process:

  • You need to register on a P2P platform once you have decided to invest your money. After giving basic information, personal details and completing the sign-up process, your account is created. You will be required to enter your PAN number for verification purposes so it’s best to keep your PAN card handy.
  • Once your account is set up, you can fund your P2P account with the amount that you want to invest. You also need to choose the time-frame from 1-5 Years. For a maximum yield on your investment, it’s always best to choose the highest tenure available. This is because of the compounding effect that works behind the scenes. The longer you stay invested, the better are your chances of earning higher yields.
  • Investor Profile and suitable investments opportunities are created by AI. Once you proceed with the deposited funds and the selected time-frame, LenDenClub’s robust AI & ML platform kicks in to place your funds among different borrowers. The risk-mitigation strategies implemented by LenDenClub diversifies your risk to as low as ₹1 per borrower that makes sure your investment is shielded throughout your investment cycle.
  • The powerful platform invests your funds into a well-diversified pool of credit-bureau-verified borrowers without any human intervention and you start your journey towards financial freedom.

Once your funds are placed, you can stay on top of your investments with our simple portfolio dashboard. This will provide you insights on your returns, your portfolio worth, the remaining time-frame and maturity among other details. Lenders have the freedom to lend up to as high as ₹50 lakhs with LenDenClub’s state-of-the-art infrastructure.

The entire investment process from account creation to starting your investment journey is free and there are no hidden costs lurking behind the scenes that catch you off-guard. So you can rest that your money works for you!

At the end of your investment tenure, your money gets returned to you along with the interest amount that you have earned over the tenure. Then, it’s your call whether you want to put your money to good use again and reinvest or use them against your financial goals that you had set.

ProTip: If you have multiple goals with different time-frames, you can always choose to create multiple FMPPs that help you address such different timelines easily. All you FMPPs individually generate up to 10-12% returns p.a*. taking you to your destined goal one step at a time.


P2P lending is a boon for investors who otherwise get constrained with low-yield investments options. The non-market linked asset class definitely generates above-average returns than its peers providing a level playing field for small and large investors alike.

A digitalized ecosystem’s transparency makes it simpler for new-age investors to experiment with their investment. They could explore P2P as a high yielding investment avenue with very little capital requirements. LenDenClub’s revolutionary FMPP investment has greatly reduced the turnaround time for investors to be able to create their investments. It’s instant! The cherry on cake of course lies with high return within a low to medium time-frame in a highly regulated environment. As the saying goes, to avoid all eggs in one basket, FMPPs create a win-win situation for investors and borrowers alike. So explore the trending opportunity today. Create an FMPP today!

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