Peer to Peer (P2P)
A regulated credit marketplace that pays you back every month
Peer to Peer (P2P)
Peer-to-Peer lending is a regulated, open-market credit marketplace — and a rare debt asset that pays you back, principal and interest, every single month.
P2P works exactly like a bank — there are lenders and there are borrowers. The decisive difference is that the lender sees exactly who the borrower is, and the spread a bank would keep flows to the lender instead.
Your capital is split automatically across 100–250 borrowers, so no single default can do meaningful damage. Returns come from interest on monthly repayments rather than market movement — which makes this credit risk, not market risk, and something to size as a satellite allocation alongside a diversified core.
How traditional banking works
A bank sits in the middle of every transaction. The depositor and the borrower never meet — each one only ever trusts the bank.
The bank’s profit is that 1.5% spread. Neither does the depositor know who borrowed the money, nor does the borrower know whose money it is.
What is peer-to-peer lending?
P2P lending works exactly like a bank — there are lenders and there are borrowers. The one decisive difference: the lender knows exactly who the borrower is.
Because it is open-market lending, every platform is regulated by the Reserve Bank of India and must follow guidelines comparable to those that apply to banks and NBFCs.
Two sides, one platform
Everything in P2P lending flows between two participants. Transparency between them is what sets it apart.
Lenders
Supply the capital
- Deposit money that is lent onward to borrowers
- One deposit is split across 100–250 borrowers
- See each borrower’s details before disbursal
- Earn interest through monthly EMI repayments
Borrowers
Demand the credit
- Need small, short-term funds — quickly
- Sourced from 50+ digital lending apps
- Rigorously screened before they qualify
- Repay in fixed monthly instalments
Who borrows — and why not from a bank
A parent is ₹50,000 short on school fees. His income comfortably covers it within two to three months — but he needs the money now.
So he comes to the P2P platform, borrows ₹50,000, and repays it over the next few months.
Why the bank cannot serve him
No short tenures
Banks will not lend for just two or three months.
Minimum-amount limits
Small-ticket needs fall below the bank’s floor.
Forced one-year loans
A personal loan locks the borrower in for a full year.
Prepayment penalties
Paying early triggers extra charges.
A selective borrower funnel
Volume is high, but qualification is strict. Only a small fraction of daily applicants ever become funded borrowers.
Where they come from
≈ 7% approval rate
Heavy screening is what keeps the pool of borrowers creditworthy.
One deposit, spread across hundreds
Lend ₹10,00,000 and it does not go to a single borrower. It is automatically split across 100 to 250 different borrowers.
This is the mutual-fund principle
A fund manager spreads money across 60–80 stocks so that if one or two fail, the rest keep the capital safe. P2P applies the same diversification logic to loans.
₹10,00,000 → 100–250 loans. Each dot is one borrower carrying a small slice of the risk.
The platform in numbers
Four lending tenures
Lenders pick the time frame that suits their cash-flow needs. The money is then distributed to borrowers on matching terms.
Why borrowers accept 20%+
Lending rates start at 20% and go up to 35–36%. That sounds steep — until you look at the rupee cost rather than the percentage.
On a ₹50,000 loan held for six months, the gap between a bank personal loan and P2P is roughly ₹2,000 in total, or about ₹350 a month. For a borrower who needs the money urgently and will repay it in weeks, that difference barely registers.
₹50,000 · six-month interest cost
Difference: ₹2,000 — roughly ₹350 per month.
From 20% gross to ~12–13% net
Start with the minimum rate borrowers pay, then subtract the built-in cushions and costs.
A built-in cushion for defaults
The platform provisions 5% for NPAs, while the actual figure has historically been around 3.43%. Because that provision is already deducted, your return moves gently even if defaults rise.
Across three crore-plus loan files, only a handful of cohorts have ever crossed 6–7% NPA.
Every rupee moves through escrow
The platform never handles your money itself. RBI oversees each leg of the transaction.
Bank-managed escrow
Deposits sit in an escrow account run by a bank — the P2P platform cannot access it.
Repayments ring-fenced
Borrower repayments also flow into the same escrow account, not to the platform.
T+1 transfer rule
Per RBI guidelines, money is passed to the lender within one day of collection.
End-to-end oversight
Every step of the transaction is monitored by the Reserve Bank of India.
What RBI allows you to lend
Before you size an allocation, these caps apply to you personally — not to the platform:
Your total exposure across all P2P platforms is capped at ₹50 lakh, and exposure to any single borrower at ₹50,000. If you lend more than ₹10 lakh in aggregate, you must give the platform a certificate from a practising Chartered Accountant confirming a minimum net worth of ₹50 lakh. These limits are set by the RBI framework governing NBFC-P2P Lending Platforms.
Your money comes back every month
The same ₹10,00,000, in two different debt products.
- Principal locked until maturity
- Only the interest can be drawn out
- One lump sum of ₹11,20,000 at the end
- Principal and interest repaid monthly
- Roughly ₹90,000–92,000 back every month
- Full cash flow from day one
The power of monthly cash flow
A benefit few other debt products offer: your capital keeps coming back to you as spendable cash, month after month, rather than sitting locked until maturity.
01 No other debt product
FDs, bonds and debt funds lock your principal until maturity. P2P alone returns it — with interest — every single month.
02 Reinvest to compound
Redeploy each month’s repayment into P2P or an SIP. Compounding can lift your effective return materially over a year.
03 Liquidity for businesses
Current-account holders keep cash on hand for day-to-day operations, and reinvest only what they do not need.
Reinvestment and SIP returns are illustrative and subject to market risk; they are not guaranteed.
A debt product with an unusual shape
Few debt mutual funds, bonds or fixed deposits combine double-digit return potential with regular principal repayment. That combination is what makes P2P distinctive — and it comes with credit risk that a deposit does not carry.
Net annual return
Roughly 1% a month in hand
Principal + interest
Real cash flow from day one
Compounds further
Route repayments into SIPs
For businesses
Steady, predictable liquidity
Frequently asked questions
Other products in our suite
Not sure if this fits your plan?
Tell us your goal and timeline. We will tell you honestly whether Peer to Peer belongs in your portfolio — or whether something simpler would serve you better.
- A senior advisor calls you, not a call centre
- Recommendation matched to your goal and risk profile
- Written summary after the call
- No cost and no obligation
Is Peer to Peer right for you?
Every product suits a particular goal, horizon and temperament. A short conversation is the fastest way to find out where this fits in your plan — or whether something else serves you better.