HomeMedia CenterAre low-interest rates making you jittery? Consider P2P lending

Are low-interest rates making you jittery? Consider P2P lending

Falling interest rate amid coronavirus crisis has impacted income of many investors who depended on debt instruments; those with surplus cash can consider peer-to-peer lending, which is attracting increasing interest from people willing to lend to those in need of short-term financing — whether individuals or small businesses

KEY HIGHLIGHTS

  • P2P lending helps earn decent returns and bridge the credit gap in the economy
  • P2P platforms connect lenders with borrowers; former earns interest and latter receives loans
  • It faces a high level of risk due to unsecured lending and is suitable mostly for investors with a high-risk appetite
  • Coronavirus lockdown has reduced demand for loans, but willingness to lend stays
  • Risk of defaults has increased post-COVID-19, but a well-managed portfolio may still earn 12-14%
  • Minimum Rs 25,000 and maximum Rs 50 lakh can be invested across P2P platforms
  • Exposure to single borrower can’t exceed Rs 50,000
  • A few P2P players have their lending limits within RBI’s prescribed limits

The falling interest rate has impacted the income of many investors who depended on debt instruments such as fixed deposits, bonds, debentures, government securities and debt mutual funds. At a time when the interest rate has fallen significantly, gold prices are trading near record highs with the limited scope of similar performance in near future, stocks markets are volatile and the sentiment is negative towards debt funds due to defaults and liquidity issues, investors with surplus cash are looking for new investment avenues to deploy their savings. One such investment is peer-to-peer lending, which is attracting increasing interest from people willing to lend to those in need of short-term financing – whether individuals or small businesses.

Credit: https://www.businesstoday.in/magazine/money-today/investment/are-low-interest-rates-making-you-jittery-consider-p2p-lending/story/405285.html

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

About

Investment

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 investment returns. 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 investment 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’ investment amounts.

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

*P2P investment is subject to risks. And investment 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 returns received by investors

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