Peer to Peer Lending Service in India

Peer to Peer Lending is an online platform that links lenders and borrowers directly. A company that strives to start a P2P Lending business must have Rs.2 Crores Net owned funds and need to get a Reserve Bank P2P License.
What we offer :

  • ROC Business Registration for P2P Object
  • Documentation processing and submission
  • Plan for Company
  • Filing a loan license application for P2P with RBI
  • Model of P2P lending
  • Danger and Legal Consultancy
  • All processing with RBI

Peer to Peer Lending Service

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Peer to Peer (P2P) is essentially an online platform that works to raise loans that are to be repaid with intrigue.
The creditor can be either a person or a lawful entity. The online platform may set the cost of funding to be paid on the loans or it may be widely selected between the parties. During the first days of their business, peer to peer lending has become a main and comfortable option for most start-ups and entrepreneurs when they are looking for venture capital. Business people will get money from people on this stage without much of a stretch.

Also, Peer Peer Lending is a plan for obligation financing under which people can lend or borrow money without the addition of any monetary organization as an intermediary. Peer to Peer lending companies is considered by the Reserve Bank of India. They work online thus making P2P lending a cost-effective approach. P2P lending platform is a quick way of lending or borrowing money. It has confirmed profitability for both parties in such a way that lenders can get profit by lending their money at a greater rate of interest while borrowers enjoy the advantage of a lower rate of interest.

P2P lending stages organizations powered by the creativity that are enlisted under the Companies Act. They go around as an aggregator of borrowers and lenders. At the lending level of P2P, lenders and borrowers register on the web themselves. From that point on, the P2P lending platform completes due diligence and affirms the loan/obtain action support applications.

One needs to get a license from the Reserve Bank of India to do a P2P lending service. A legal application is filed with the authority next to the necessary documents by the experts to receive a P2P lending license.

  • Any individual, including an individual, a body of individuals, a HUF, a corporation, society or any artificial body, may participate in the loan platform for P2P.

  • P2P lending is governed by the NBFC Peer to Peer Lending Platform Master Directions.

  • Released in 2017 by the RBI. With the approval of the RBI, only the NBFC may register as a P2P lender. A certificate of registration from the RBI should be obtained by any P2P lender. The Department of Non-Banking.

  • Regulation, Mumbai, should register any current and non-banking NBFC-P2P.

  • Furthermore, the P2P should have at least 20 million net owned funds and fulfill the other conditions laid down by the RBI. A debt ratio not exceeding 2 must be maintained by P2P lenders.

  • Crowd Lending, i.e. the unsecured personal loans that are commonly given to individuals, companies, or charities.

  • Loans for Students.

  • Loans for Commercial and Real Estate.

  • Company Loans Covered.

The model of P2P lending is based on the model of crowd-funding. The majority of P2P lending platforms are structured as fintech companies of the NBFC (Non-Banking Financial Companies). The P2P model is a new credit model for meeting current business credit needs, unlike conventional banking and financial institutions. Faircent, Paisadukaan, Finzy, Rupeecircle, and so on, have a few P2P sites providing services.

The P2P loan provides a forum to merge all kinds of individual investments, high net worth (HNI), Hindu Undivided Families (HUFs), and other non-banking institutions.

Following the P2P business model, an auction is conducted where the lender can request a borrower’s loan requirements and the borrower can either accept or decline the bid. Moreover, the platform can give services such as credit assessment, recovering loans, and so on. The platform regularly co-ordinates the transaction between the lender and the borrower.

  • All transactions are performed online on the P2P lending site.

  • Lenders and borrowers do not have a friendship with each other.

  • Lenders have the choice of selecting the borrowers freely to invest in.

  • No requirement for interest rates or sums to be agreed.

  • A P2P lender may serve as an intermediary, providing the participants with an online marketplace or forum.

  • Pursuant to Section 45I(bb) of the RBI Act, 1934 or the Companies Act, 2013, a P2P lender shall not raise deposits.

  • A P2P lender is unable to lend, offer or arrange any credit enhancement or a credit guarantee on its own.

  • A P2P lender, except for loan-specific insurance products, can not lend on its own, allow an international flow of funds, or cross-sell any item.

  • A P2P lender should ensure that the participants comply with the legal specifications laid down by different applicable laws

  • Process and maintain data storage on hardware located within India for all data relating to its activities and participants.

The creditors from the individual financial investors (principal) are willing to lend their own credit to the creditors at an equitable rate of interest on the peer-to-peer lending network.

The profiles of the borrower are displayed on the P2P lending platform from which the borrower can unhindered select the profile of the borrower and lend their money. There are no relations between the moneylender and the buyer. It is not significant.

It is not necessary to receive a complete loan from the proposed borrower; he may be given a measure of what a financial specialist requested (investor). For the remaining sum, at least one lender could offer the credit at the P2P lending point.

  • Easy-to-use platform: The entire peer-to-peer lending scheme operates solely on an online platform. The application method is also fast and easy. Securing funds on the P2P automated platform is handy. In general, a list of investors who loan loans to borrowers and merge them through an automated matching mechanism is provided by the peer-to-peer lending platform. This means that the processing time can be fast and sometimes even as little as a few hours to get the cash.

  • Access to more inexpensive rates: In comparison to conventional lenders like banks, one also gets access to loans at lower interest rates on P2P platforms. Investors directly lend money to borrowers across peer networks. For both sides, the absence of any overheads in P2P is the greatest advantage, and interest rates are set at reasonable rates.

  • For traditional lenders, P2P lending is an ideal alternative: P2P serves as a great substitute for conventional financial modes. For people who require alternative finance for their personal and professional needs, it plays an important role.

  • Borrowers just have to connect to the peer to peer network: The P2P platform ensures that the lending and borrowing process is streamlined by intermediaries between the parties. It means that a borrower doesn’t have to create an investor relationship; he can keep anonymous. Where all payments are only transferred through the platform.

  • Higher flexibility than banking and unsecured loans: A P2P network as an unsecured credit provider demands no collateral, which in banks is not so. You must then deposit your personal property as collateral to seal the deal if you take a loan from a bank. P2P has the sole justification for a quicker application process and gives you shorter access to funds.

  • The organization must be registered in India as a Private Limited or Public Limited Company for the main financial purpose.

  • Profit at least has assets of INR 2 crores.

  • Website / Mobile Application Performance.

  • The online application is available on the RBI site (COSMOS).

  • A copy of the printed version of the program and the accompanying documentation will be sent to the RBI Office

  • Permission will be granted after reviewing the application monitoring and documentation attached to it.

  • The company must be based in India, and have the necessary technical, business, and administrative resources to provide P2P lending services to participants.

  • The company must have sufficient financial structure and management to conduct the P2P lending business.

  • The company has implemented a Peer to Peer Lending Platform.

  • The company is issued with a Certificate of Registration (CoR) to serve the public.

  • Any other condition imposed by the bank for the purpose of starting a business or conducting business in India.

  • To exercise due diligence on its participants before accepting them as participants on the platform.

  • Performing risk assessments and credit assessments of registered lenders and disclosing the same to registered lenders.

  • Seeking clear and prior consent of participants to access its credit information.

  • Drafting of loan agreements and other relevant documents.

  • Provide assistance in repaying and repaying the loan amount.

  • Provide loan repayment services from the platform.

  • For Peer to Peer Lending platforms, funds will be transferred between participants through the Escrow account method, which will be used by the Trustee.

  • Two small Escrow accounts need to be maintained – one for receiving credit from creditors while waiting for withdrawals and the other for lenders.

  • All transactions will only be done through bank accounts. Currency transactions are not allowed at all.

  • Keeps the credit details of creditors and lenders well maintained and updates the same at such times, as determined between the Company and the CIC.

  • The necessary steps that may be required to ensure the credit information provided by it are standard, accurate, and complete.

  • In agreements with participants, it will include the appropriate permission to provide credit information.

  • Information relating to the identity of the borrower, the interest rate required the required loan amount, and the loan.

  • Details regarding terms and conditions relating to loans such as repayments, taxes and levies.

  • Details about the amount proposed by the lender and the interest rate offered.

  • Grievance Redressal System

  • Detailed Business Model

  • Portfolio Performance every month, which covers portions of non-performing assets

  • Disclosures on usage and security of user data

  • The frame of credit assessment and parts examined for the same

What is Peer to Peer lending licensing?
Who governs the P2P lending firms?
What is the capital required to get a P2P lending license?
Is the P2P loan model in India regulated?
What is the procedure license for a P2P lending license?
What is the validity of a P2P Lending License?
What are the required documents to get a P2P lending license?

Peer to Peer Lending Service

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