As per the updated RBI guidelines of Dec 2019, the following limits are applicable to any person(s) lending on P2P platforms:
A Lender can maximum lend INR. 50 lakhs across all P2P lending platforms
A Lender can maximum fund INR. 50,000 per loan
The maturity of the loans shall not exceed 36 months. However, LiquiLoans platform is currently only accepting a maximum of Rs. 10 Lakhs per PAN from any investor. The lender lending more than Rs. 10 Lakhs across P2P platforms shall mandatorily need to produce a certificate to P2P platforms from a practicing Chartered Accountant certifying minimum net-worth of Rs. 50 Lakhs.
The interest income earned from P2P loans must be mentioned while filing tax returns under Section 56(2) of the Income Tax Act under “Income from other sources” under the column B3 in ITR1 and tax has to be paid according to the slab the lender would fall under.
By selecting the auto invest feature or/and signing this document, lender understand that EMIs received from the assigned loans will be relent/re-invested as per the auto-invest criteria defined by the lende.
Each lender can opt to list their existing loan(s) for sale, as well as buy secondary loans from the secondary marketplace made available on the platform. Lenders shall have to define the sale / purchase specifications, and if a buyer / seller is available with matching requirements, the transaction will get executed and funds will be settled within 48 working hours. Secondary marketplace is purely a platform provided for transactional assistance (sell / purchase of loan/s) and should NOT be construed as a guarantee by LiquiLoans that such sale / purchases will be executed.
A single P2P loan may be funded by a number of lenders, leading to distribution of risk among the borrowers.
Easy Interface Operate Online, Management of Funds is easier
Reduced Costs Help save on traditional middlemen intermediation charges/fees/costs
Reduced Costs Help save on traditional middlemen intermediation charges/fees/costs
Lucrative Lending Rates Enable borrowers to borrow money at lower rates
As with any type / form of lending, there are some risks, the biggest being that a borrower doesn’t repay i.e., there is a risk that a borrower may default.
LiquiLoans minimizes the above risk by having the best-in-class risk management and borrower sourcing mechanism. LiquiLoans ensures that investment of each lender is diversified across a number of borrowers if the lender has opted for the auto-invest feature and hence protecting the lender from concentration risk of exposing oneself to only few borrowers.
In case of a default, LiquiLoans uses a combination of soft and hard collections to collect missed payments on the lender’s behalf.
LiquiLoans shall assist / facilitate the collection through its in-house collection mechanism and may also send a legal notice on behalf of the lender to the borrower. LiquiLoans has already signed up with collection agencies to recover monies from overdue borrowers, who then on the investor’s behalf will try and reach out to the borrower and get back the outstanding funds on case-to-case basis.
LiquiLoans does NOT guarantee any part / full recovery from borrowers.