What is Peer to Peer (P2P) Lending

In recent years, Peer-to-Peer (P2P) lending platforms have gained considerable popularity in India, revolutionizing the investment and borrowing landscape. These online platforms connect borrowers directly with lenders, creating a mutually beneficial lending ecosystem. The availability of internet access, coupled with the underserved credit needs of individuals and small businesses, created an ideal environment for Peer to Peer  lending platforms to thrive. These platforms leverage technology to facilitate loan transactions, matching lenders’ investment preferences with borrowers’ credit requirements.

Investing in P2P lending platforms offers several benefits for investors looking to diversify their portfolio and earn attractive returns.

Here are some key advantages

Higher Returns: P2P lending platforms provide an opportunity to earn higher returns compared to traditional investment options. By directly lending to borrowers, investors can potentially earn interest rates that surpass those offered by traditional financial institutions.

Diversification: P2P lending allows investors to diversify their investment portfolio with a new-age investment avenue that is non-market linked. This diversification helps mitigate the risk and helps to balance the portfolio.

Accessibility: P2P lending platforms provide access to a previously untapped market of borrowers, including individuals and small businesses who may struggle to secure loans from traditional financial institutions. This accessibility allows investors to support creditworthy borrowers who might otherwise be overlooked by banks.

Passive Income Stream: P2P lending can generate a passive income stream for investors. Once funds are invested, the platform handles loan disbursement, repayment collection, and borrower management, reducing the need for active involvement. Investors can earn regular interest payments, which can supplement their income or be reinvested to compound returns.

Technological Efficiency: P2P lending platforms leverage advanced technology and automated processes, streamlining the investment process for investors. These platforms use Artificial Intelligence and Machine Learning technologies to assess borrower creditworthiness, minimizing the time and effort required for due diligence.

Following are the best P2P lending platforms to invest in P2P lending.

LenDenClub: LenDenClub is India’s largest P2P lending platform in India, providing investors with attractive returns of up to 12% p.a. on their investment amount. LenDenClub has revolutionized the P2P lending landscape in India by introducing their P2P lending investment plan called FMPP because it is available to all investors.

Faircent: Faircent is a prominent P2P lending platform in India that offers lenders the opportunity to invest in loans. Investors can explore a wide range of loan listings and select loans based on their risk appetite and expected returns. Faircent has successfully established itself as a trusted platform, facilitating lending transactions between borrowers and lenders.

Lendbox: Lendbox operates as a P2P lending marketplace, connecting borrowers in need of personal loans with potential lenders. The platform caters to various loan purposes, including debt consolidation, education expenses, medical bills, and more. Lendbox provides an avenue for investors to participate in P2P lending and contribute to borrowers’ financial requirements.

i2iFunding: i2iFunding is another P2P lending platform that allows individuals to invest in loans. Investors can diversify their investment portfolio by selecting loans from different risk categories offered on the platform. Returns are generated based on the interest charged on these loans, providing investors with potential earnings.

RupeeCircle: RupeeCircle presents lenders with an opportunity to invest in loans across a range of risk categories. Investors can choose loans based on borrower profiles, loan purposes, and interest rates, enabling them to diversify their investment and minimize risk. RupeeCircle aims to facilitate secure lending transactions and offer attractive options for investors.

Check out the Best P2P lending platforms in India


The P2P lending industry is dynamic and it is important to note that the landscape is continuously evolving, and new platforms may emerge or existing platforms may undergo changes. Therefore, we recommend conducting thorough research, reading user reviews, and taking into account factors such as interest rates, loan terms, borrower verification processes, and customer support before selecting a P2P lending platform. Staying informed and updated about the latest developments in the industry will help ensure that you make well-informed decisions when choosing a P2P lending app.

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