This Article was fact checked and last updated for accuracy on November 17, 2024 by Mani Karthik
If you are looking for a loan, and have found banks to be of no particular help, online loans might be your way out. Online loan lending is a concept that has garnered a lot of attention in India recently. Essentially, it’s pretty much similar to loans from banks, but just that these are private companies that offer loans online. Most companies have completely online solutions where you can sign up for a loan online and have your loan amount deposited into your bank account in a matter of hours or minutes.
In the last couple of years, many lenders have come about, backed by serious venture capitalists that offer better online loan and peer to peer lending loans to Indian borrowers. In this article, let’s take a look at some of the best peer to peer lending companies in India.
1. Lendbox
Lendbox is a India based online lender that offers loans to credit-worthy borrowers for their needs. It works the typical peer to peer lending way where lenders or investors come together and show interest in certain needs and offer loans to borrowers.
Features
– Lenders are pre approved and borrowers checked for their credit worthiness.
– Their rates are competitive and varies according to each borrowers credit worthiness.
– Anyone who is an Indian resident, is more than 25 years old, has an Indian ID proof, has a valid Indian bank account is an eligible borrower at Lendbox.
– Lendbox charges a onetime listing fee of Rs. 1,500 from all borrowers.
– EMI is decided between the borrower and the investors, and repayments are made directly to them.
Loan Interest Rates & Fees
Interest Rate 16% or less – Fees 2% of Loan Amount or 2000 whichever is higher
Interest Rate 16.25% to 21% – Fees 3% of Loan Amount or 3000 whichever is higher
Interest Rate 21.25% to 25% – Fees 4% of Loan Amount or 4000 whichever is higher
Interest Rate 25.25% to 28% – Fees 5% of Loan Amount or 5000 whichever is higher
Interest Rate Above 28% – Fees 6% of Loan Amount or 6000 whichever is higher
Official website and details here.
2. i2i Funding
i2i is another online loan lending platform in India that operates pretty much the same way as others but with minor differences. They claim that borrowers can get their loans at their own desired rates of interest and investors (lenders) can get high returns (which all peer to peer companies promise). Their interest rates are slightly different as well, as they categorize borrowers into different risk catetgories.
Features
– Registration fee of only Rs.100 for borrowers and lenders.
Risk Category A – % Fees 1.5% of Loan Amount
Risk Category B – % Fees 2% of Loan Amount
Risk Category C – % Fees 2.5% of Loan Amount
Risk Category D – % Fees 4% of Loan Amount
Risk Category E – % Fees 4% of Loan Amount
Official website and details here.
3. Faircent
Fiarcent is yet another lending company in India. Similar process, as others. They offer a marketplace where anyone can register to be a lender or a borrower. They take care of credit check and underwriting process, and hence the entire lending process is easy and seamless for both parties. The whole lending process works on a reverse auction system. An automated underwriting system assigns the loan period, loan amount and indicative maximum interest rate against each borrower’s profile. Lenders can make offers to fund borrower’s requirement at similar or lower interest rates than assigned, which the borrower can accept or refuse. Borrowers too can approach willing lenders with their loan proposals.
Loan interest and interest rates
| ADMINISTRATIVE FEE | LOAN INTEREST RATE | ||||||
|---|---|---|---|---|---|---|---|
| Loan Amt. | 12-16% | 16-20% | 20-24% | 24-28% | 28-32% | 32% & above | |
| 0 | Rs. 50000 | Rs. 1000 | Rs. 1125 | Rs. 1375 | Rs. 1750 | Rs. 2250 | Rs. 2875 |
| Upto | Rs. 150000 | Rs. 3000 | Rs. 3375 | Rs. 4125 | Rs. 5250 | Rs. 6750 | Rs. 8625 |
| Upto | Rs. 250000 | Rs. 5000 | Rs. 5625 | Rs. 6875 | Rs. 8750 | Rs. 11250 | Rs. 14375 |
| Upto | Rs. 350000 | Rs. 7000 | Rs. 7875 | Rs. 9625 | Rs. 12250 | Rs. 15750 | Rs. 20125 |
| Upto | Rs. 450000 | Rs. 9000 | Rs. 10125 | Rs. 12375 | Rs. 15750 | Rs. 20250 | Rs. 25875 |
| Upto | Rs. 500000 | Rs. 10000 | Rs. 11250 | Rs. 13750 | Rs. 17500 | Rs. 22500 | Rs. 28750 |
Get more details from their official website here.
4. LoanTap
LoanTap is an online loan startup in India that offers loans online to salaried people. If you have a salary of over Rs. 40,000 in India, you can get a personal loan online via their website. They call their product “EMI free loans”. What it means is that your pay back is based on your salary and it will be automatically taken from your salary. They claim lower interest rates compared to banks and other lenders, but this is to be proved.
Advantages
- Get loan in up to 204 hours quickly!
- Flexible repayment terms.
- Custom loans according to your requirement.
Disadvantages
- Higher interest rates.
Official website and details here.
Summary
Online loans in India is a promising segment. Banks like Bajaj Finserv have come up with online loan application products already and offer competitive rates. But startups have better products with faster money disbursement and custom products. If you are looking for a applying for a loan online, do check your credit score and be prepared. Almost all online loan products use your credit score to check eligibility. This segment is pretty new in India, so you’ll find a lot of rough edges to these programs. However, I’m hoping that they better with age. More players in this arena means better rates, better products for the end consumer like you and me. Let’s hope we’ll see more action in this space in the coming days.
If you’re looking for a loan, go ahead and apply to these online loan lenders.
hi mani ,
can you suggest me any venture capitalist or foreign bank for my new startup in these sector,
The more the better!
Excellent article Mani! All these lending companies can make the whole ‘getting a loan’ process a lot much simple.