HomeMedia CenterBorrowing from a P2P platform? Here’s what you need to know

Borrowing from a P2P platform? Here’s what you need to know

– Check if your P2P platform is registered with the Reserve Bank of India. While many online lending platforms offer quick loans, only a few of them have received the NBFC-P2P registration from RBI, making it a safer and credible platform for both investors and borrowers.
– Make sure you check for any extra charges that the platform might impose on them that would, in turn, add to the total interest paid, or deducted from the amount they have received.
– Defaulting or late payments on P2P loans has its consequences as most NBFC P2P platforms have bureau integration and thus, it makes it difficult for the borrower to avail future loans as well if the borrower has been tagged as a defaulter.

Borrowing from a peer-to-peer platform is much easier than a traditional lender like banks or non-banking financial companies (NBFC) as it involves less effort and is not charged with higher interest rates or face any hurdles due to poor credit history.However, P2P platforms practice caution as the money involved in their own and without a proper background check and credit history, it becomes risky for investors to lend their money.

“P2P platforms remove the middleman from the process and make the entire process more profitable for borrowers and lenders. Also, the loan disbursal time taken by a P2P platform is comparatively lesser than that taken by traditional banks. Since the process is online on most P2P platforms, the confusing paperwork involved in application is totally avoided,” Ajit Kumar, founder and chief executive officer, RupeeCircle said.

Here are a few things to look out for before borrowing from a P2P platform:

Check if your P2P platform is registered with the Reserve Bank of India. While many online lending platforms offer quick loans, only a few of them have received the NBFC-P2P registration from RBI, making it a safer and credible platform for both investors and borrowers.

P2P platforms use traditional as well as digital data points for underwriting to estimate the creditworthiness of a borrower. Thus, it is advisable to not hide any information while applying for a loan and be as honest as possible so that it becomes easier to get your loan processed.

“When you are borrowing from such platforms, it is essential for you to disclose all the information correctly. If you do not, your loan application may get rejected after verification. So, always disclose the right information at the time of applying. While applying for a loan on such platforms, handy scan copies of the documents and a selfie are all you need,” Bhavin Patel, co-founder and CEO, LenDenClub said.

Make sure you check for any extra charges that the platform might impose on you, that would, in turn, add to the total interest paid, or deducted from the amount you have received. Also, ask if there are any prepayment charges that the platform might charge, in case you want to pre-close the loan.

Essentially, you need to pay nominal registration fees and processing fees when the loan is disbursed to the borrower. Make sure you have a clear idea about the final amount that you are getting after all the deductions.

Make sure that you are applying for the right amount of loan, which shall not give you additional financial baggage while repaying the loaned amount. Defaulting or late payments on P2P loans has its consequences as most NBFC P2P platforms have bureau integration and thus, it makes it difficult for the borrower to avail future loans as well if the borrower has been tagged as a defaulter.

Do not shy away from asking about details related to your loan and the equated monthly installment (EMI) that you are going to pay and penalty in case you delay your payment. As per the RBI, if the EMI is not paid in 90 days after the due date, it is considered as a default. Various P2P platforms may have grace periods within which you can pay your dues.

Find out what is the maximum time a platform takes to disburse the loan, as different platforms follow different procedures to disperse the loan. It becomes all the more crucial when you are borrowing for an emergency need.

 

Credit: https://www.cnbctv18.com/personal-finance/borrowing-from-a-p2p-platform-heres-what-you-need-to-know-3322141.htm

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

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