HomeMedia CenterAuto loans lend a hand to P2P players eyeing hassle-free lending

Auto loans lend a hand to P2P players eyeing hassle-free lending

P2P players are increasingly looking at more secure product partnerships, aiming to introduce asset-based investment products with Faircent being the first to do so.The platform has tied up with Mumbai-based on demand biketaxi service Baxi to provide twowheeler loans to drivers.

Besides auto loans, Faircent also plans to introduce trade loans to distributors and retailers of consumer-durable products and other such companies. Similarly, other players like LendenClub and i2iFunding aim to offer investment products like auto loans and invoice discounting options on their platform.

“We have disbursed loans to over 25 drivers many of whom have two jobs, some of them peons.The loan amount is usually `50,000 for a lower interest rate of 14-15% and can be repaid over a three-year period. We aim to disburse loans to at least 200 drivers through the Baxi partnership,” said Rajat Gandhi, founder of Faircent. Since August, Faircent has seen a monthly loan disbursal amount of up to `2 crore. According to Bhavin Patel, cofounder of LenDenClub, internationally peer-to-peer players have gone on to offer auto loans, home loans, cross border financing loans, risk finance and consumer and electronic durable loans.

“We have created two-wheeler and four-wheeler loan products and discussed how to assess them. We have even discussed partnerships with dealers but will wait for RBI regulations to be announced, even though we don’t expect to hear anything pertaining to secured loans. These are early stages in India, just a matter of few months before we offer auto and other similar secure lending options,” said Patel.

Venture Catalysts-funded i2iFunding plans to offer bill-discounting options and then follow up with auto-loan products on the platform. The platform is currently in talks with an NBFC to offer bill discounting to its existing user base. Bill discounting loan sizes could range from `50,000 to `20 lakh, offering an interest rate of ly 15%.

“With bill discounting we have an idea of the kind of default rate to expect since we will be leveraging data from our existing user base. With auto base. With auto loans there are more legal hassles in case of default since it’s a riskier segment but we aim to offer both of these options early 2017,” said Vaibhav Pandey, cofounder of i2ifunding. However, Sanjay Swamy, managing partner of Prime Venture Partners and an investor in the fintech sector, expects negligible default rates for two-wheeler loans, since transportation is essential.

“This is a natural progression and a logical starting point for P2P products. However, it’s important to distinguish between essential versus discretionary assets. Also with Aadhar, eKYC and IndiaStack access to credit will be easier for many more people than in the past,” Swamy added.

Credit: Times of India

LenDenClub is India’s largest alternate investment platform which started operations in India in 2015. We have been helping lenders diversify their investments beyond traditional investment instruments ever since.

About

Lending

Best Blogs: Best Investment Apps | Best P2P Lending Platforms in India | Best Trading Apps

The Reserve Bank of India does not accept any responsibility for the correctness of any of the statements or representations made or opinions expressed by Innofin Solutions Private Limited, and does not provide any assurance for repayment of the loans lent through its platform.

LenDenClub is an Intermediary under the provisions of the Information Technology Act, 2000 and virtually connects lenders and borrowers through its electronic platform via the website and/or mobile app.

The lending transaction is purely between lenders and borrowers at their own discretion, and LenDenClub does not assure loan fulfilment and/or lending simple interest. Also, the information provided on the platform is verified or checked on the best efforts basis without guaranteeing any accuracy of the data/information verification. Any lending decision taken by a lender on the basis of this information is at the discretion of the lender, and LenDenClub does not guarantee that the loan amount will be recovered from the borrower, fully or partially. The risk is entirely on the lender. LenDenClub will not be responsible for the full or partial loss of the principal and/or interest of lenders’ lending amounts.

*This is an annualized yield and is subject to the maximum FMPP tenure, which is 5 years. P2P lending is subject to high risk and may cause an entire loss of principal.
 

*P2P lending is subject to risks. And lending decisions taken by a lender on the basis of this information are at the discretion of the lender, and LenDenClub does not guarantee that the loan amount will be recovered from the borrower.

** Average value mentioned is the weighted average of simple interest received by lenders

© 2024 LenDenClub by Innofin Solutions Private Limited | CIN: U74999MH2015PTC266499