Is P2P lending profitable in India?
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Is P2P lending profitable in India?
Compared to debt funds, P2P lending can generate average annual returns of 12\% to 15\%. That’s an astonishingly high rate of return, comparable to equity investments, which carry much higher risk than P2P lending.
How profitable is P2P lending?
According to Lending Club, P2P investors have earned average net returns (after fees and charge-offs for defaults) ranging from 5.24 percent for their highest-grade A rated loans to about 9 percent for their lowest-grade E, F and G rated loans. Not too shabby.
Which P2P lending is the best in India?
Platforms Facilitating Peer-to-Peer Lending in India
| Name of the P2P Platform | Interest Rate (p.a.) | Repayment Tenure |
|---|---|---|
| Faircent | 9.99\% onwards | 6 months to 36 months |
| OMLP2P | 10.99\% onwards | 3 months and 36 months |
| i-lend | 15\% onwards | 6 months to 36 months |
| LenDenClub | 6.5\% onwards | 3 months to 24 months |
How can I invest in peer-to-peer lending in India?
India’s Most Trusted P2P Lending Platform
- #STEP1 Register With RupeeCircle. Create your account in 5 simple steps including profile, document submission verification, application and approval.
- #STEP2 Choose Your Loan. Choose the offer with the terms that work the best for you.
- #STEP3 Get Your Funds.
How much can I invest in P2P?
As per RBI regulations, one can invest up to Rs 50 lakh across P2P platforms. The minimum amount is Rs 25,000. The RBI has specified that the tenure of a single loan cannot be more than three years. Exposure to a single borrower cannot go above Rs 50,000.
Why is P2P reliable?
Peer-to-Peer vs. Client/Server: Reliability and Efficiency of a Content Distribution Service | SpringerLink.
Why peer-to-peer lending is bad?
P2P credit risk 1: Loss due to bad loans (credit risk) This P2P risk is probably the most “common” reason for losing money on some loans: when your borrowers are not solvent enough and cannot pay back your money. Or the P2P-lending site might have set aside a pot of money to pay for expected bad debts.
Is P2P lending a good investment?
Just like any investment, P2P lending carries risk and no return is guaranteed by any P2P platform. Any platform guaranteeing a certain return on your investment is up to something shady. An investment is only an investment because it carries certain risks and rewards.
What is the market size of P2P lending in India?
The Indian P2P lending market size is expected to be $ 4-5 billion by 2023. P2P lending is here to stay, and the sooner you start investing in this asset-class faster you earn on your surplus funds. Build a diversified portfolio of investments over some time.
Is peer-to-peer lending a good investment?
An investment is only an investment because it carries certain risks and rewards. Peer-to-peer lending is no different. That said, most peer-to-peer lending platforms provide education and information about their investments so you, as the investor, understand what risk you are taking on.
How do P2P platforms evaluate borrowers?
The P2P platforms use these credit checks to evaluate the trustworthiness of borrowers. An optimal strategy to reduce risk is to invest smaller amounts of money across multiple loans instead of putting a lot into a single loan. The diversification across loan types, loan amounts, and loan risk can help reduce overall risk to the investor.