P2P Lending: lend directly, with eyes open
Understand how peer-to-peer lending works before you invest
P2P platforms connect people who want to lend with people who want to borrow. Returns can be attractive, but the risks are real. Read how it works and compare the platforms below.
What is P2P lending?
Peer-to-peer (P2P) lending lets individuals lend money to borrowers through an online platform, instead of going through a bank. In India, such platforms are regulated by the RBI as NBFC-P2P.
You are the lender
Your money is lent to one or more borrowers through the platform, often split across many loans.
Borrowers repay
Borrowers repay principal and interest over time. The platform passes repayments on to lenders.
The platform connects
The platform assesses borrowers, matches loans and collects repayments. It does not guarantee your money.
Four simple steps
Register
Create an account on the platform and complete your KYC.
Choose a plan
Pick a plan or loans and read their terms, tenure and risks.
Lend
Add funds and lend. Track repayments from your dashboard.
Receive repayments
Receive repayments and withdraw as per the platform's rules.
Who may and may not consider P2P
May consider it
- People who understand and accept the risk of loss
- People who lend only a small part of their savings
- People who can keep money locked for the full tenure
- People who want to spread money across many loans
Should avoid it
- Anyone looking for guaranteed or fixed returns
- Money you may need at short notice
- Emergency funds and essential savings
- Anyone who has not read the platform's terms
Risks you should know
P2P lending is not a bank deposit. You can lose part or all of the money you lend.
Default risk
A borrower may not repay on time or at all. This can reduce your returns or your principal.
Liquidity risk
You may not be able to take your money out before the loan or plan ends.
No guarantee
Returns are estimates. P2P is not covered like a bank deposit and the platform does not guarantee repayment.
Platform risk
The platform's processes, systems or business can fail or change. Check its regulatory status.
Concentration risk
Putting a large part of your money in P2P, or in few loans, raises your risk.
Tax and charges
Interest earned may be taxable, and platforms may charge fees. Check the terms and speak to a tax adviser.
P2P lending platforms
Details below are as stated by each platform on its own website. Please verify them and read the platform's terms before you lend.
A peer-to-peer lending platform. Its main plan, FMPP®, spreads a lender's money across multiple borrowers, as stated by the platform.
- Minimum amount₹10,000
- Platform-stated returnUp to 15% p.a.*
- WithdrawalAs per platform terms
*Platform-stated, "up to" figure. Not guaranteed. Returns depend on repayments and may be lower. Please read the platform's terms and risks.
A peer-to-peer lending platform. Its Monthly Income Plus plan pays principal and interest in monthly repayments, as stated by the platform.
- Minimum amount₹10,000
- Platform-stated returnUp to 18% p.a.*
- Loan tenureUp to 24 months
*Platform-stated, "up to" figure. Not guaranteed. Returns depend on repayments and may be lower. Please read the platform's terms and risks.
The platforms state that they are RBI-registered NBFC-P2P. Please verify this on the RBI website. We are a referral partner and do not provide investment advice.
Frequently Asked Questions
1. Is P2P lending safe?
It carries real risk. Borrowers can default, and P2P is not a bank deposit. Lend only an amount you can afford to lose, and spread it across many loans.
2. What returns can I expect?
Platforms advertise "up to" returns, but these are not guaranteed. Your actual return depends on repayments and can be lower.
3. How much do I need to start?
The platforms shown here state a minimum of ₹10,000. Check the current minimum on the platform.
4. Can I withdraw my money anytime?
Not always. Withdrawal depends on the plan and the platform's rules, and money may be locked until the plan or loans end.
5. What happens if a borrower defaults?
The platform may try to recover the amount, but recovery is not assured. You may receive less than you lent.
6. Is the interest taxable?
Interest from P2P lending is generally taxable as income. Please check the current rules or talk to a tax adviser.
7. How do I choose a platform?
Check its RBI registration, read its terms, look at its track record and risk disclosures, and start with a small amount.
Other options
Have questions before you lend?
Talk to us. We will explain how P2P works, its risks and how the platforms compare, so you can decide for yourself.
Important Disclosure: Peer-to-peer lending involves risk, including default by borrowers, limited liquidity and possible loss of part or all of the amount lent. Returns are not guaranteed, and figures shown are stated by the platforms on their websites. P2P lending is not a bank deposit. Advisor4U / Sahare Wealth acts as a referral partner, does not provide investment advice through this page, and is not responsible for the platforms' operations. Please read the platform's terms and verify its regulatory status before you lend.