P2P lending platform serves to those individuals typically who have low or poor credit score and on the basis of the information furnished in the online form such as personal details, financial inflow etc, credit score of the person is decided and based on which the interest rate is decided.
In a usual case, more than one lending platform fund the loan and as and when it is 75% funded, the disbursal is made.
Process to apply for P2P funds:
Registration of borrower: Borrower has to register his or her relevant details such as professional, financial and personal, for the different platforms to judge his or her financial health. The registration is further processed and completed after the mandated documents are provided. There is also some prescribed for the registration and that usually varies across platforms.
This source of funding has been chiefly useful in cases where individuals seeking mid or short term loans face tedious documentation and high interest rate situation. Also, the eligibility criteria for availing the loan from the P2P entity should be understood in respect of the maximum ticket size the institution lends, loan purpose as well as the location the entity covers.
As per the RBI guidelines, an individual can secure a maximum of Rs. 10 lakh via P2P platform. But different platforms have different upper limit when it comes to loan size. Another factor i.e. of utmost importance is that you should secure fund from a platform i.e. registered as NBFC-P2P with RBI
The institution thereupon after the borrower's details have been entered into the system, carry out to understand at what interest rate, the funds should be provided. Usually higher the credit score, lower is the rate of interest rate charged from the borrower.
Profile listing: Now depending upon the purpose for which the loan has been sought, amount and credit rating, prospective lenders will view the listed borrower's profile. And if the institution after verification is satisfied with the prospective buyer's profile then they may go ahead in lending.
And before the final disbursal of the loan, a digitally signed agreement is entered into for verification by logging into either the borrower or lender's account.
Furthermore, borrower as a security is required to furnish required number of post-dated cheques for final disbursal of loan.