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Yes, Peer to Peer (P2P) lending in India is safe as long as you invest through an RBI Certified P2P NBFC like LiquiLoans or Faircent. Although there are other factors that you must consider before you become a lender on one of these platforms.
Let’s dive into P2P lending in-depth to see the benefits, risks and understand the various regulations that are in place to ensure safety.
Peer to peer lending or P2P lending platforms connect borrowers to individuals or a group of lenders. These borrowers are thoroughly vetted based on their creditworthiness and other important factors. You can consult a Cube Wealth Coach or download the Cube Wealth App.
P2P lending platforms cut out the intermediaries like conventional lenders. Usually, a borrower would go to a lender like a bank for a loan. These loans mostly have an unfavourable interest rate that most borrowers may want to avoid.
At the same time, a loan could be the only way for the borrower to pay off student loans, credit card debt, or other such needs. In such cases, P2P lending becomes the next best alternative.
P2P lending could be a potential investment option that can generate passive income.
Historical data suggests that P2P lending may give returns of 8-14%. This is comparatively better than a bank savings a/c or FD.
P2P lending may generate passive income in the form of recurring monthly interest payments. You can consult a Cube Wealth Coach or download the Cube Wealth App.
Cube's P2P lending partners, Faircent and LiquiLoans, ensure that you lend to thoroughly vetted borrowers who have a high CIBIL score.
The minimum lending amount and the additional investment amount are fairly low. Download the Cube Wealth app to know more.
You can select lending options according to your risk profile and goals. Cube's P2P lending partners help you distribute risk across multiple borrowers.
There are risks involved in P2P lending just like any other investment. Here are the 5 risks that lenders may face:
The borrower(s) may default on their interest payments. Thus, you should rely on a leading platform like Faircent or LiquiLoans on Cube Wealth that thoroughly vet their borrowers.
There's a possibility of principal repayment default in certain scenarios. Thus, you must consult a wealth coach before investing.
Lending a high amount to a specific borrower may be risky. However, Cube's P2P lending partners help you distribute your risk across multiple borrowers.
Most of these risks can be avoided by investing through a trusted RBI Certified P2P NBFC like LiquiLoans or Faircent with advice from a Cube Wealth Coach.
The RBI has guidelines and regulations in place to ensure the safety of both lenders & borrowers. While there are many more guidelines, here's a look at the 7 most important ones that you need to know before becoming a lender or borrower on P2P platforms:
P2P lending can be a passive income generating investment that can give potentially high returns. However, it has its own risks just like any other investment that you must be aware of.
If you're investing through an app like Cube Wealth, you'll have the benefit of splitting your investment across multiple properly vetted borrowers to reduce the risk.
Cube works with trusted RBI Certified P2P NBFC like LiquiLoans and Faircent. There are no hidden fees involved and every important fact is transparent. More importantly, you have complete control over who you want to lend to.
Download the Cube Wealth app for free to know more about P2P lending.
Ans. Cube Wealth gives you access to two of the best P2P lending platforms in India, Faircent and LiquiLoans. Cube's P2P partners are RBI Certified P2P NBFCs that ensure that you only lend to the best, creditworthy borrowers.
Moreover, P2P lending on Cube Wealth is an attractive asset class with historical returns between 8 to 12%. Download App For Free
Ans. Cube Wealth gives you access to two of the best P2P lending platforms in India, Faircent and LiquiLoans. Cube's P2P partners are RBI Certified P2P NBFCs that ensure that you only lend to the best, creditworthy borrowers.
Ans. P2P lending platforms in India often have criteria for both borrowers and investors, including age, income, and credit score requirements. These criteria can vary by platform.
Ans. P2P lending platforms in India have dispute resolution mechanisms in place. In case of a default, investors can pursue legal action against the borrower with the platform's assistance.
Is P2P Lending in India Safe?
P2P lending in India can offer an alternative investment option, but it is not without risks. The safety of your investment in P2P lending depends on several factors, including the platform you choose, your risk tolerance, and diversification.
The regulation by the Reserve Bank of India (RBI) has introduced a level of oversight and transparency to the industry, making it safer than unregulated alternatives. However, investors should carefully research P2P lending platforms, consider risk ratings, and diversify their investments to mitigate risks.
Before participating in P2P lending, it's advisable to consult a Cube Wealth Coach.
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