Abhik Das
Jul 15th 2024
Finance
Peer-to-peer lending or P2P lending offers a way for individuals to borrow and lend money without involving traditional financial institutions like banks. This direct connection through the P2P platforms can result in faster loan approvals and lower interest rates for borrowers, while potentially offering higher returns for lenders compared to other investments. While P2P lending can be beneficial, it is important to consider the risks associated with it.
The fintech industry in India is experiencing rapid growth, particularly in the P2P lending sector. In this particular blog, we aim to showcase the top 10 P2P lending platforms in India for 2024. We will delve into their unique features, advantages and impact on the ever-changing financial landscape.
List of P2P Lending Companies in India (2024)
Given below is the list of top 15p2p lending companies in India that are currently functional in 2024 along with their various important parameters -
P2P Lending Platform | Minimum Investment Amount (In INR) | Interest Rate Offered Per Annum (in % age) |
i2i Funding | 1000/- | 36 |
Lendbox | 10,000/- | 30 |
Cashkumar | 1000/- | 24 |
Finzy | 1000/- | 22 |
IndiaP2P | 5000/- | 16 |
Fello | 500/- | 15.5 |
LenDenClub | 50,00,000/- | 15 |
Lendingkart | 50,000/- to 20,000,000/- | 15 |
13 Karat | 500/- | 13 |
Faircent | 30,000/- | 12 |
12% Club | 1000/- | 12 |
Mobikwik Xtra | 1000/- | 12 |
Rupee Circle | 25,000/- to 5,00,000/- | 12 to 30 |
LiquiLoans | 1,00,000/- | 10.5 |
Cred Mint | 1,00,000/- | 9 |
Read Also:Top 10 Non-Banking Financial Companies (NBFCs) in India 2024
Now will discuss the top 5 P2P companies that are currently active in India from the list above in detail.
1. i2i Funding
I2i Funding, established in October 2015, is a key player in India’s growing peer-to-peer (P2P) lending sector. The platform serves as a bridge, connecting individuals looking for unsecured personal loans with investors seeking attractive returns. It is worth mentioning that i2i Funding is a registered Non-Banking Financial Company - P2P Lending Platform (NBFC-P2P) under the Reserve Bank of India
i2i Funding Business Model
i2i Funding is an online P2P lending platform that connects verified borrowers with investors looking for high-yield opportunities, creating a streamlined loan process from application to repayment. Their online platform ensures a seamless experience for both borrowers and investors.
i2i Funding's Role
For Investors | For Borrowers |
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2. Lendbox
Lendbox, which started its operations in November 2015, has become a significant player in India’s growing peer-to-peer (P2P) lending industry. The company is registered with the Reserve Bank of India (RBI) as an NBFC-P2P and is focused on transforming debt investments in India.
A Vision to Democratize Wealth Creation
Lendbox was created to provide ordinary investors with greater access to debt investments, realizing the constraints of traditional investment systems that tend to favour institutional investors and high-net-worth individuals. Their mission is to dismantle these barriers by -
- Fractionalizing Debt Investments: It allows small investments in debt financing, making it accessible to more people
- Increased Liquidity: It improves debt investment liquidity for more flexibility in trading
- Removing Intermediaries: It connects borrowers with investors, removing intermediaries and lowering fees
Lendbox has successfully enabled retail investors and HNIs to create wealth since its establishment. Additionally, they have formed strong collaborations with various wealth management firms by adopting a smooth API integration model.
From Bootstrapped Startup to Innovative Leader
Lendbox established itself in the P2P lending industry without waiting for regulations. They obtained their NBFC-P2P license from RBI in 2018, making their platform trustworthy and compliant. Despite being self-funded initially, Lendbox received seed funding in late 2018 to improve its platform.
Lendbox’s focus on investor success is evident through its constant innovation, aimed at providing reliable and noteworthy returns. They have strategically placed investors at the centre of their operations, leading to significant growth and a strong reputation in the Indian P2P lending sector.
3. Cashkumar
Cashkumar, a fintech company founded in March 2014, aims to simplify access to financial services in India by addressing inefficiencies in the lending sector and ensuring a seamless user experience.
A Company Rooted in Innovation
Cashkumar is a startup founded by 3 highly-educated individuals who graduated from reputable Indian institutions. They saw the importance of providing financial solutions for common problems and set out on a mission to revolutionize the financial industry. The company has demonstrated a dedication to ongoing growth and a willingness to pursue new ventures.
Cashkumar Today
Cashkumar is committed to making financial solutions easier for Indian consumers. They provide a variety of financial products and services that cater to different needs like -
- Foreign Exchange
- Travel Insurance
- Personal Loans
- Peer-to-Peer Lending
Cashkumar uses technology to simplify the financial services process, making it more convenient for the customer. With a focus on innovation and satisfying customers, they have become a major player in India’s changing financial industry.
4. Finzy
Finzy is a popular platform in India that connects borrowers with lenders. As an RBI-registered NBFC-P2P, it provides personal loans with competitive interest rates. This makes Finzy a convenient and attractive option for individuals in need of financial assistance.
Finzy Features
- Competitive Rates: It offers personal loans at competitive rates, starting at 10.99% per annum, which can reduce borrowing costs, particularly for larger loans
- Fast and Convenient: Its online application process is fast and convenient, providing loan approvals and funding within 48 hours, eliminating lengthy waits
- Flexible Repayment Options: It offers flexible repayment options with no penalty charges for prepayments
- Transparency and Security: It values transparency and security, using secure digital processes to protect user data for a safe borrowing experience
How Does Finzy Work?
Finzy functions as a marketplace that connects borrowers in search of personal loans with investors who are eager to lend money. Here is a simplified breakdown of the process -
- Borrowers Apply Online: Borrowers apply online with loan details
- Credit Assessment: Finzy’s credit assessment process involves evaluating the borrower’s creditworthiness to ascertain their eligibility for a loan and determine the appropriate interest rate
- Matching Borrowers with Investors: Finzy matches borrowers with investors based on creditworthiness and loan details
- Loan Disbursem*nt: The loan amount is disbursed to the borrower’s account after a successful match
- Repayment: Borrowers repay the loan principal and interest in monthly EMIs directly to Finzy. Finzy then distributes the repayments to investors
5. IndiaP2P
IndiaP2P is a leading RBI-registered peer-to-peer (P2P) lending platform designed to empower both borrowers and investors in India. They offer a secure and transparent marketplace for individuals seeking high-yield investment opportunities and those requiring loans.
Why Choose IndiaP2P?
- High Returns with Predictable Performance: It offers investors the opportunity to earn high returns with predictable performance. With a focus on attractive returns of up to 16%, they aim to provide a clear picture of expected performance through risk-reduced portfolios
- Focus on Integrity and Innovation: It prioritizes ethical practices and transparency and its team is committed to upholding the highest standards of integrity. Moreover, they leverage innovative technology to develop industry-leading investment products
- Building a Community of Purpose: It aims to build a community that prioritizes values and positive social impact alongside financial gain. They are dedicated to creating an environment where investment decisions are aligned with the greater purpose of progress and social change
How Does IndiaP2P Work?
While the specific details may vary, here is a simplified overview of the P2P lending process on the IndiaP2P platform -
- Investors Register and Deposit Funds: Investors sign up, deposit funds and select investment options to match their risk preferences and financial objectives
- Borrowers Apply for Loans: Borrowers apply for loans by submitting loan applications detailing the desired loan amount and the purpose for which it will be used. IndiaP2P evaluates the creditworthiness of the borrowers as part of the loan application process
- Matching Investors with Borrowers: It is a platform that matches borrowers and investors in India. It connects creditworthy borrowers with suitable investors by using specific criteria
- Loan Disbursem*nt and Repayment: IndiaP2P facilitates loan disbursem*nt and repayment. Once a match is made, borrowers receive the loan amount and they repay it with interest in monthly instalments. Repayments are made directly to IndiaP2P, who then distributes them to the investors
Frequently Asked Questions (FAQs)
Q: What is P2P lending?
A: P2P lending offers an alternative to traditional banking by connecting borrowers and lenders directly through online platforms. This gives borrowers and lenders directly through online platforms. This gives borrowers access to funds for various purposes while potentially offering lenders higher returns compared to traditional savings accounts. The practice operates outside of traditional financial institutions and can provide competitive interest rates for both borrowers and lenders.
Q: How do P2P lending platforms work?
A: P2P lending platforms create an online marketplace where borrowers can submit loan applications detailing their needs and proposed interest rates and borrowers are assessed based on their creditworthiness. Lenders can browse through loan listings, research borrowers and invest in loans that align with their risk tolerance and investment objectives. The platform manages secure transactions, automated repayments and collection processes for users.
Q: What are the typical interest rates for P2P loans in India?
A: Interest rates on P2P loans in India are determined based on factors such as the borrower’s creditworthiness, loan amount and loan term. These rates typically range from 10% to 25% per annum. Borrowers who have a higher creditworthiness are more likely to qualify for lower interest rates.
Q: What is the minimum investment amount in P2P lending?
A: The minimum investment amount can differ among platforms, ranging from as low as 500 rupees to potentially higher amounts
Q: What are the tax implications of P2P lending in India?
A: It is crucial to be aware that the interest earned on P2P loans is categorized as income from other sources and is subject to taxation based on your income tax slab. Additionally, defaults on P2P loans may also carry tax implications. Seeking advice from a tax professional for personalized guidance is highly recommended.
Q: Are there any alternatives to P2P lending platforms in India?
A: Yes, there are several alternatives available for investors looking to achieve higher returns. Some of these options include:
- Direct investment in bonds
- Mutual funds
- Real Estate Investment Trusts (REITs)
Q: Are there any regulatory considerations for P2P lending platforms in India?
A: The Reserve Bank of India (RBI) plays a crucial role in overseeing the regulation of P2P lending platforms in India. To operate legally, these platforms are required to obtain registration as NBFC-P2Ps from the RBI. This regulatory framework provides a foundation for consumer protection and oversight within the P2P lending sector.
Related Posts;
- Top 10 Private Banks in India 2024
- Top 10 Government Banks in India 2024
- Top 5 Payment Banks in India 2024
- Top 10 Small Finance Banks (SFBs) in India 2024
- Top 10 Regional Rural Banks (RRBs) in India 2024
Author: Abhik Das
Abhik Dasis a versatile content writer with over 5 years of experience crafting engaging and informative content across diverse industries. His expertise spans the fields ofed-tech, pharmaceuticals, organic food, travel, sports, and finance.
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Abhik's diverse background empowers him to deliver insightful content across a wide range of subjects. Whether you're seeking engaging explainer pieces on the latest financial trends, informative guides to organic food choices, or captivating travelogues, Abhik has the expertise to craft content that resonates with your audience.
