What do fixed deposits, mutual funds and capital market have in common?

These are investment options available today. Each of them has an earning potential commensurate with the underlying risk involved. Usually, people approach banks and other financial institutions for such investments who constantly endeavor to provide investment options as per the risk appetite of each individual investor.

Peer-to-Peer lending is the latest financial tool which allows investors to directly invest in loan products given to borrowers. The earning potential of such investments is high as they are not routed through banks or financial institutions. Like other investment options, P2P lending offers the flexibility of earning returns proportionate to the risk involved.

People-Lend’s proprietary risk model scores borrowers which can help investors make an informed decision before investing and strike the right balance between risk-and-return.

A good financial portfolio is one which has low, medium and high risk financial investments. With P2P lending you can spread your investments across various risk categories by investing in different investment options. Using technology and big data, we help connect borrowers and investors faster & cheaper than banks and other financial institutions.

Why Invest

P2P investments are less volatile and have much higher yields as compared to other fixed-return investments. Read more (CTA will be directed to the page ‘Why Invest’)
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Who Can Invest

There are some criteria to be fulfilled before becoming an investor at People-Lend. On fulfilling the criteria and submitting the required documents, the investor account is opened.
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Process

Right from registration to reaping the benefits of your investments; we have truly simplified the entire process.
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Returns and Fees

Higher rate of return and lower fees and charges as compared to banks makes People-Lend your trusted Investment and P2P lending partner
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FAQs

Have questions? Get your answers here; from registration to your first investment to all the how-to’s and what-do-I-do’s – we have answers for all your queries.
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Why Peer to peer Investing

The word Investment has been synonymous with fixed depositsor shares or mutual funds in India. Investors usually rely on banks and financial institutions for these investments, as they are trustworthy. However, there are other aspects that usually get overlooked.

One such aspect is the amount of fees / charges associated with investing through these institutions. These charges can eat into your earnings more so if the investments are compounding over years. Also, a good diversified portfolio would require you to invest in different financial tools to create a balance between low, medium and high risk investments. This would mean that to keep a tab over your investments you would need to manage different platforms (banks, AMCs and broking portals)

Peer-to-Peer lending offers an opportunity to invest in loan products that are offered to pre-verified borrowers at better rates by connecting you to the borrowers directly. Further, the borrowers are given a credit score by our proprietary risk model classifying them into risk categories. This can help you spread your investments across the spectrum and create the right risk-return balance.

We create a digital community of investors and borrowers allowing mutually agreeable financial transactions. We are a tech-enabled platform that works on the fundamental guidelines set by RBI and SEBI for lending and investments. We have developed our internal procedures and policies synchronal with the same to provide a seamless experience to you.

Who Can Invest

At People-Lend, we strive to provide a platform for investors and borrowers alike to benefit for the peer-to-peer lending opportunities. We have simplified the registration process for investors with a few basic criterions like:

ELIGIBILITY CRITERIADOCUMENTS NEEDED
  • Government of India recognized Identity Proof
  • Passport
  • PAN Card
  • Voter ID Card
  • Driving License
  • Aadhaar Card
  • Also Admissible
  • Government / Defence Services ID card
  • ID card of public sector employees
  • Pension payment orders of retired employees
  • Government of India approved Address Proof
  • Passport
  • Voter ID Card- if it contains latest address
  • Alternately
  • Income tax/ wealth tax /assessment order
  • Letter from public sector employer
  • Pension payment orders by government departments/public sector undertakings
  • A Valid Bank Account
  • Cancelled Cheque
  • Indian Citizen
  • Passport
  • Voter Id Card

 

Apart from the documents mentioned above the following additional documents are needed:

  • PAN Card (Mandatory for all Customers)
  • Cancelled Cheque
  • Aadhaar Card

Eligibility Criteria

  1. Over 21 Years of Age
  2. Minimum earnings of Rs.12,00,000 per annum
  3. Indian Citizen

These documents can be submitted online (scanned copies) which will be subject to physical verification prior to the agreement. We are committed to the confidentiality and security of all the information provided to us and assure you that this information will only be used for internal / official purposes.

Process

At People-Lend we constantly thrive to keep the process of investments simple, quick and effective. As an investor, it is important for you to understand the entire process from registration to the receipt of payments.

info-Process-Lender

At any stage, you can always contact us for any queries / assistance / guidance and we shall be glad to assist.

Returns & Fees

Returns on Investment

One of the biggest advantages of peer to peer lending is that fact that you as an investor, can decide the returns on your investment and the risk involved. Since People-Lend provides a virtual meeting place for investors and borrowers, the interest rate depends on your negotiation with the prospective borrowers and investment mix across risk classes. We provide a credit score to each borrower via an internal credit assessment system which can be used by investors to manage the risk involved before investing.

Let’s look at an example:

Rajiv wants to invest Rs. 100,000 for a period of 5 years. He wants to maximise his returns but not expose himself to a lot of risk either. The borrower list looks like this:

BorrowerNeedsRisk Class
1 Rs 1,00,000 I

2

Rs 1,00,000

II

3

Rs 1,00,000

III

4

Rs 1,00,000

IV

5

Rs 1,00,000

V

 

(* I – Least risk & V– highest risk)
Keeping his risk exposure low, this is what Rajiv does:

At the end of each tenure, Rajiv has a choice to withdraw the money or reinvest. If he withdraws, then he receives a pay-out of Rs. 120,672 and his return on investment is

Return on Investment (ROI)
= Net Profit * 100/Total Investment
= 20,672*100/100,000 = 20.67%

However, if he chooses to reinvest till he reaches 5 years of investment, then his returns will look like:his returns will look like:his returns will look like:

BORROWERAMOUNT INVESTEDEMITOTAL PAY-OUTPRINCIPAL INVESTEDROI
Borrower 140,000₹ 1,550₹ 92,995₹ 80,00016.24%
Borrower 250,000₹ 2,057₹ 123,447₹ 100,00023.45%
Borrower 310,000₹ 519₹ 31,127₹ 25,00024.51%
Borrower 40
Borrower 50
Total ₹ 247,569₹ 205,00020.77%

So, Rajiv receives a total pay-out of ₹ 247,569 after 5 years.

Return on Investment (ROI)
= Net Profit * 100/Total Investment
= 42,569*100/205,000 = 20.77%

Let’s try some permutations and combinations here. If Rajiv would have taken a little exposure on higher risk classes while keeping his ROI the same:

As explained above, his ROI on pay-out will be 20.40% if he chooses to withdraw. However, if he chooses to reinvest till he reaches 5 years of investment, then his returns will look like:pay-out will be 20.40% if he chooses to withdraw. However, if he chooses to reinvest till he reaches 5 years of investment, then his returns will look like:pay-out will be 20.40% if he chooses to withdraw. However, if he chooses to reinvest till he reaches 5 years of investment, then his returns will look like:pay-out will be 20.40% if he chooses to withdraw. However, if he chooses to reinvest till he reaches 5 years of investment, then his returns will look like:

BORROWERAMOUNT INVESTEDEMITOTAL PAY-OUTPRINCIPAL INVESTEDROI
Borrower 150,000₹ 1,937₹116,244₹100,00016.24%
Borrower 230,000₹1,234₹74,068₹60,00023.45%
Borrower 315,000₹778₹46,690₹37,50024.51%
Borrower 43,000₹177₹10,645₹8,182
Borrower 52,000₹133₹8,004₹6,000
Total ₹ 255,652₹ 211,68220.77%

 

Just by taking a small risk, Rajiv can increase his total pay-out by 3% to ₹ 255,652 at the same ROI.

Let’s also look at the scenario where Rajiv invests more across higher risk classes.

BORROWERRISK CLASSREQUESTINV %AMOUNT INVESTEDINTEREST RATETENURE(MNTH).EMIPAY OUTTOTAL PAYOUTPRINCIPAL INVESTEDROI
1I100,0002%2,00012%30₹77₹2,325₹4,650₹4,00016.24%
2II100,0003%3,00017%30₹123₹ 3,703₹7,407₹ 6,00023.45%
3III100,00015%15,00022%24₹778₹ 18,676₹ 46,690₹ 37,50024.51%
4IV100,00030%30,00029%24₹1,774₹39,031₹106,449₹81,81830.10%
5V100,00050%50,00035%24₹3,335₹66,699₹200,097₹150,00033.40%
Total₹ 130,434₹365,292₹ 279,31830.78%

 

This can fetch him a ROI of 30.78% with a total pay-out of Rs. 365,292 at the end of 5 years!

Rajiv can decide how much risk he wants to take and make an offer to the respective borrower. Typically, borrowers with least risk are offered loans at lower rates and these rates rise as the risk class increases.

Registration fee:
One-time set-up charges of Rs.500

Disbursal Fee    
Investors are charged a flat 2% fee towards disbursal on the investment amount.

Cancellations and Refund
If you want to cancel your registration, then the registration fee will be refunded in the following proportions:

Cancellation of Registration but before making profile liveFull Amount
After profile is made live50% refund
During communication &negotiationNIL
Post disbursalNo cancellation allowed

FAQs

General Questions

People-lend is committed to ethical business practices and has no hidden costs. Unlike banks and financial institutions which earn a margin between investors and borrowers, we disintegrate our overall costs into smaller constituents and charge the Investors for specific tasks. The registration fee is levied to manage the on-boarding costs involved in processing and verifying your documents.

There are some statutory laws pertaining to investments in India. The verification process is to ensure compliance with KYC policies set by RBI & practiced by all financial institutions. Besides, this will also help us keep all our operational processes smooth at a future point in time.

Borrowers are urged to pay the EMIs between the 5th and 8th day of every month. The funds are credited to your account by the 10th day. This is done to ensure smooth operations.

Information like socio-demographic profile and risk classification about the borrower necessary to help investors take informed decisions is made available to them. We also provide a chat box to assist in negotiation without revealing either party’s identity, which is revealed only post agreement.

Investments in P2P loans are not risk-free. In fact we explicitly mention the risk associated with every investment. However, we also take maximum precaution in identifying risk associated with each Borrower and encourage our Investors to hedge risk as much as possible by following some simple rules & strike Interest Rates such that their earnings are not affected by probable defaults. We also have tie-ups with collection agencies to help you minimise defaults and delayed payments. Investors are advised to display prudence before investing.fact we explicitly mention the risk associated with every investment. However, we also take maximum precaution in identifying risk associated with each Borrower and encourage our Investors to hedge risk as much as possible by following some simple rules & strike Interest Rates such that their earnings are not affected by probable defaults. We also have tie-ups with collection agencies to help you minimise defaults and delayed payments. Investors are advised to display prudence before investing.

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We DO NOT deduct any tax on the payments received by you through People-Lend. These earnings will be taxable as per the income tax bracket applicable to you. You are responsible for paying the applicable tax on the income earned through our platform and People-Lend is not liable for any default on the same. You can download an annual income statement from our website.

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