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What is P2P Lending?

By Elricho Gomes

21st May 2022

2 mins read

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We all know how banks lend. For those of you who don’t, it’s straightforward; lend money at exorbitant rates and borrow at meagre ones. Added to it, for the borrowers, there’s always a ton of documentation to be done before you see the first penny in your account. For the lenders, it is primarily lending your money and forgetting it existed in the first place while the cents die a slow death to the poison called inflation. Banks shall remain as they do now, and little can be done to revolutionise the “lunch ke baad aana” institutions. But where there’s a will, there’s a way (cliche but true), and that same way is known as Peer-2-Peer lending.

Sounds new and unfamiliar? Stay with us, and we’d acquaint you with our new friend.

The P2P Lending Market

Unlike the banks, the P2P lending market is highly flexible in loans. It offers different amounts of loans to be borrowed at different rates ensuring the most economical rate for borrowing the loans. The P2P lending market has emerged as a cheaper and viable alternative for small businesses, student loans, and even to pay off their credit card bills at a much lower interest rate than the credit card companies.

Advantages of P2P

  • Safer Investment - While P2P might seem a risky investment, lending through RBI regulated NBFCs makes it one of the safest investment options. The investments done through Spenny are in turn lent to individuals with high credit scores, making it a safe investment option to earn good returns on one’s money.
  • High-Interest Rate - Spenny offers a fixed interest rate of 10% p.a. on Spenny wise (an investment product backed by P2P lending), as opposed to the fixed interest rate offered by banks that bite the dust to the ever-increasing inflation rates.
  • Rewards for better credit scores - In the conventional banking system, the people with low credit scores don’t get the loans, while those with a good credit score still pay hefty interests on the amount borrowed. However, P2P lending rewards borrowers with higher credit scores with lower interest rates while safeguarding the lender's money and charging higher interest rates to those with lower scores.
  • Liquidity - The money invested in Spenny Wise can be withdrawn in full anytime after seven days.
  • Diversification - Although Spenny offers multiple avenues for investment like Mutual Funds and Digital Gold, market crashes can worsen your Monday blues. On the other hand, Spenny Wise ensures that interest on the lent amount is credited daily and can be liquidated without any hassle. This makes it a fantastic investment opportunity for investors with a low-risk appetite.

This was some finformation on our new friend, P2P lending. Make sure you check out Spenny Wise for more information regarding the same.

Till then, Stay Safe! Invest Safer!!


What are NBFCs?

Non-Banking Financial Companies are institutions similar to banks but have a few differences, like not being able to accept demand deposits or issuing self-drawn cheques.

What is a Credit Score?

A credit score represented CIBIL score quantifies the ability of the borrower to return the loans. The score ranges from 300 - to 900. The lower the CIBIL score, the higher the interest rates and the more complex the procurement of a loan.

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Made with ❤️ in India