What is Peer to Peer Lending? The ultimate guide to Peer to Peer Lending

Nov 8, 2017

If you’ve been following the news lately, Peer to Peer lending in India is creating a huge buzz among retail investors and institutional investors. If you’re wondering what exactly is this Peer to Peer lending and how will it benefit you, you’ve come to the right place!

Peer to Peer or P2P, as the name suggests, refers to person-to-person. Peer to Peer Lending, in layman terms means lending and borrowing money between two or more people without any intermediaries. Usually, a person who has excess money (Lender) lends it to another person (Borrower) who requires money urgently for a certain period of time which will be repaid with some interest. So where do Peer to Peer platforms come in to the picture?

Peer to Peer platforms like LenDenClub connect such lenders & borrowers and provide help and support to both the parties by charging a small amount for the services rendered, some of them being borrower assessment, collection of dues, timely disbursal etc.

How are Peer to Peer platforms different than traditional financial institutions like Banks and NBFCs?

Peer to Peer platforms, worldwide, are taking the banking model and revamping it entirely to create a favorable lending and borrowing climate.

P2P platforms are cooler version of banks!

Getting a instant personal loan from a Peer to Peer platform is faster, easier and hassle-free plus you get a better interest rate when compared with banks because they have massive overheads which include salaries, swanky offices, ATMs etc. Think about it, FD rates are around 6% and interest that bank charges is upwards of 12%.

Peer to Peer platforms, on the other hand, don’t have such overheads hence the lenders make more money on their investments and the borrowers can get a better interest rate. A win – win for both!

Here’s why you should be using P2P platforms like LenDenClub to borrow or lend money


1.     Quick and hassle-free loan application process

2.     Fast loan approval and disbursal

3.     Cheap interest rates


1.     Earn great returns on investment within a short span of time

2.     Bypass the volatility of the stock market

3.     Watch your money grow every month

As per the trends shown in countries like UK & US, majority of the people are turning towards P2P platforms to fulfil their credit needs. Although at a very nascent stage in India, the P2P industry is projected to be a $4 – $5 Billion by 2020, as per a report published by KPMG & NASSCOM. Everything said, Peer to Peer lending is here to stay and if you haven’t been a part of this financial disruption then now is the best time with the RBI supporting P2P lending and promoting it.

Want to know how to start lending in Peer to Peer platforms? Read this article.

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