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Frequently asked questions

Here’s everything lenders and borrowers ask us about P2P lending on 1 Finance P2P.

About 1 Finance P2P

Peer-to-peer (P2P) lending connects borrowers and lenders directly. It allows borrowers to get loans quickly and lets lenders earn money on their returns. This is all done through a safe and regulated online platform. Lenders can choose whom to lend to, helping them diversify their portfolios.

Yes, P2P lending is regulated by the Reserve Bank of India (RBI). Since P2P platforms engage in lending and borrowing, the RBI mandates that they be registered as P2P non-banking financial companies (NBFCs).

1 Finance P2P is a Reserve Bank of India (RBI) registered NBFC-P2P with a simple vision: to make credit more accessible and lending more rewarding. We select high-quality borrowers, and lenders can earn up to 16% p.a. depending on borrower repayment. For borrowers, we provide loans at the best rates in the industry.

Yes, 1 Finance P2P is officially registered as an NBFC-P2P with the RBI. It ensures we offer a safe and regulated platform for peer-to-peer lending and borrowing throughout India.

Anyone who is a resident of India, has an Indian bank account, and is at least 18 years old can become a lender at 1 Finance P2P.

1 Finance P2P helps you diversify beyond traditional asset classes by lending directly to individually assessed borrowers. Every borrower is evaluated through our proprietary Borrower Quality Score™ (BQS), which assesses more than 250 data points across income stability, cash flow, repayment capacity and credit behaviour — and only around 3% of applicants make it through. Diversification further reduces your risk: no more than 5% of your total lending is allocated to any single borrower. As borrowers repay their EMIs, you earn interest income every month, with returns of up to 16% p.a. possible depending on borrower repayment. Please note: P2P lending carries risk. Borrowers may default, and your principal is not guaranteed or insured by the platform or the RBI.

If a borrower defaults, P2P lending platforms take steps to recover the loan, such as sending reminders, charging late fees, and reporting to credit bureaus. In severe cases, legal action may be taken; however, the lender ultimately incurs the financial loss.

At 1 Finance P2P, we help manage risk your money by diversifying your funds across multiple borrowers. No more than 5% of your capital is ever lent to a single borrower, minimising risk. Additionally, we have a stringent credit underwriting process that evaluates over 250 parameters before approving loans. It ensures you lend only to high-quality, creditworthy borrowers, reducing your risk of default.

To borrow from 1 Finance P2P, you need to be at least 18 years old and not more than 60 years of age, and hold a valid bank account. KYC documents are also required to apply for a loan on P2P lending platforms. The total borrowing limit across all platforms is capped at ₹10 lakh at any given time.

You can apply for a maximum online loan of up to ₹10 lakh from 1 Finance P2P. The minimum amount you can borrow is ₹10,000. Remember that you can apply for a loan up to ₹10 lakh across all P2P lending platforms at any point in time.

Borrowers will be charged an interest rate based on their risk profile. The interest rate will range from 8% to 24%.

A borrower can avail a loan for up to 36 months. The actual tenure depends on the loan amount and the credit profile. However, as per RBI guidelines, the maximum tenure for a P2P loan cannot exceed 36 months.

At 1 Finance P2P, we believe in 100% transparency. While there is a nominal processing fee for borrowers to cover administrative and credit assessment costs, there are no hidden charges. All fees, interest rates, and repayment terms are clearly disclosed upfront before you finalise your loan or return, ensuring you stay in complete control of your finances.

Lending

Yes, P2P lending is legal in India. The platform you use to lend money must be registered with the Reserve Bank of India (RBI) as an NBFC-P2P. Remember that P2P platforms must share clear details about the borrowers and their loan performance with their lenders.

The amount you can lend on any P2P platform depends on its specific rules. For example, at 1 Finance P2P, the maximum you can lend to a single borrower is ₹50,000, with a limit of 5% of your total lending to any single borrower. It reduces lenders' risk by spreading their returns across multiple borrowers.

No, To ensure secure, fast, and smooth transactions, 1 Finance P2P uses a lender's escrow account managed by an RBI-regulated trustee for all fund transfers.

According to RBI, a lender's total exposure to all borrowers across all P2P platforms may not exceed ₹50 lakh at any time. If your lending exceeds ₹10 lakh, you need to obtain a Net Worth certificate from a Chartered Accountant that verifies your net worth is at least ₹50 lakh.

No, you cannot withdraw your loan principal before the loan tenure ends on a P2P platform. However, you can choose how much money you want to lend to a borrower, as well as the repayment schedule they follow. The maximum amount you can lend to any one borrower is limited to 5% of that borrower's total loan amount. As they make repayments, you will receive monthly payments as a lender with 1 Finance P2P.

At 1 Finance P2P, we carefully screen borrowers by reviewing their financial details, history, and over 250 parameters. It is crucial to remember that P2P lending is not the same as a bank deposit—it is not insured, and there is always a risk that a borrower might not repay the loan. This means that your potential returns are not guaranteed. We do our best to recover the money you lend in the event of a default.
Before you lend through 1 Finance P2P, please read our terms and conditions carefully to understand all the risks involved.

At 1 Finance P2P, lending includes built-in diversification. You can lend at least 1% and up to 5% of what a borrower needs, but no more than that. This way, your money is spread across multiple borrowers rather than concentrated in a single borrower. If one person defaults, it won't affect all of your funds. This strategy helps reduce the risk of your lending portfolio.

No, the earnings from P2P lending are not guaranteed. There is always a risk that a borrower might not repay their loan. At 1 Finance P2P, we mitigate this risk by conducting thorough checks on all potential borrowers, using more than 250 different parameters. Lending only to reliable borrowers is the best way to reduce the chances of defaults.

All repayments you receive from borrowers on 1 Finance P2P will be made without any tax deduction. We will provide an annual income statement for you to download from your dashboard. Your earnings will be taxable according to the income tax rules that apply to you. It is your responsibility to pay the applicable tax on the income earned.

The biggest risk of P2P lending is that a borrower may not repay the loan. At 1 Finance P2P, we reduce this risk by using a strict underwriting process carried out by an experienced team. Our team assesses over 250 factors when selecting borrowers. A loan is only disbursed once the borrower signs a legally binding loan agreement. Additionally, there is a limit on the maximum amount you can lend to a single borrower. These measures help decrease the chances of dealing with a defaulting borrower.

Borrowing

It depends on the specific P2P platform from which you are borrowing. At 1 Finance P2P, the online loan borrowing process is easy and transparent.
To borrow personal loans online from 1 Finance P2P, you must meet the following criteria:
1) Be at least 18 years old and not more than 60 years of age, and be a resident of India.
2) Have a valid bank account.

Loan Amount: You can take an online personal loan starting from ₹10,000 up to a maximum of ₹10 lakh. Loan Tenure: The platform offers a flexible repayment option, allowing you to choose loan tenures of up to 36 months.

Depending on your profile, credit score, and payment history, the interest on a 1 Finance P2P online loan will be between 8% and 24% per annum.

You will be borrowing from multiple lenders, including MNIs, HNIs, and family offices familiar with alternative fixed-income products. These lenders are genuine and registered with 1 Finance P2P. Importantly, each lender contributes up to 5% of your total loan amount.

Yes. You can close your 1 Finance P2P loan early, in part or in full, at any time — with zero prepayment or foreclosure charges. You repay the outstanding principal plus interest accrued to that date.

If you fail to make payments on time, you will face penal charges, which may include:
- Late Payment Charge
- EMI Overdue Charge
- Legal Action
- Bounce Charges
All these charges will depend on the P2P platform from which you are borrowing. They may vary from one platform to another. Be sure to read the Key Fact Sheet carefully before taking a personal loan from a P2P lender.

1 Finance P2P offers a fair, transparent borrowing process. You take loans from lenders, eliminating extra intermediary costs. All associated charges are clearly outlined in a transparent agreement before you start borrowing.

To choose the right platform, you should evaluate the following key features:
Competitive Rates: Look for competitive interest rates, typically in the range of 8% to 24% per annum.
Flexibility: Ensure the platform offers flexible loan amounts, ranging from smaller amounts such as ₹10,000 to larger amounts such as ₹10 lakh, and allows you to choose a comfortable repayment tenure.
Transparency: Verify that all fees are clearly displayed upfront with no hidden fees. This includes checking the costs for loan processing, onboarding, and any charges for prepayment.

Yes. You can cancel and exit your loan within 3 days of disbursal. You repay only the principal that was disbursed — no interest and no prepayment charge. This 3-day cooling-off period applies to every loan on 1 Finance P2P.

No. Prepayment is free on 1 Finance P2P — there is no charge for either full prepayment (foreclosure) or partial prepayment. You pay only the outstanding principal and the interest accrued up to the date of prepayment. All charges are set out in your Key Fact Statement (KFS) before you accept the loan.

ROI Calculator

ROI (Return on Interest) in P2P lending represents the actual profit you earn on your lending after deducting all costs. These costs include platform fees, losses from borrower defaults, and taxes. A high interest rate doesn't always equal a high ROI if these costs are significant.
P2P returns are calculated by taking the gross interest earned from borrowers and subtracting the platform's fees & Charges and any non-performing assets (defaults). The resulting figure is your pre-tax income. To find your final net return, you must also deduct the applicable income tax based on your tax slab.
Most basic calculators show pre-tax returns. However, our P2P ROI Calculator explicitly includes a field for your tax bracket to estimate your post-tax ROI. In India, interest income from P2P lending is typically taxed as 'Income from Other Sources' at your marginal tax rate.
ROI is a simple measure of total profit relative to initial lending over a period. XIRR (Extended Internal Rate of Return) is a more complex metric that accounts for multiple cash inflows and outflows (like monthly EMIs and subsequent lending) occurring at different times. XIRR is generally more accurate for ongoing P2P portfolios.
Re-lending is the practice of taking the EMIs you receive from existing loans — both the principal and interest portions — and lending them out again instead of withdrawing them. Because your earned interest is put back to work, it can start generating further earnings, which is the basis of compounding. Each re-lent amount funds a new loan, subject to borrower availability and the platform's matching policy.
When you withdraw an EMI, only your original principal was ever earning. When you re-lend it, the interest you've already earned is added to the amount that's working for you, so future earnings are calculated on a larger base each month. Over a longer tenure, these repeated cycles are what create the gap between the two gross-interest figures shown above — without re-lending and with re-lending. The size of that gap depends entirely on the rate, tenure, and repayment assumptions you enter.
No. The numbers shown are illustrative estimates based on the assumptions you provide and assume timely repayment with no defaults. P2P lending is subject to risk, including the possible loss of principal and interest, and the entire risk is borne by you as the lender. As per RBI directions, no P2P platform can offer assured returns, guarantees, or liquidity commitments.

EMI Calculator

A P2P EMI Calculator is a tool designed to help borrowers and lenders understand the repayment schedule of a Peer-to-Peer loan. It calculates the monthly installment (EMI), total interest payable, and the total amount to be repaid based on the loan principal, interest rate, and tenure.
P2P EMI is calculated using the standard formula for Equated Monthly Installments: E = P x r x (1+r)^n / ((1+r)^n - 1), where P is the principal loan amount, r is the monthly interest rate, and n is the loan tenure in months. This ensures a constant monthly payment composed of both principal and interest.
In a Standard EMI plan, you pay a fixed amount every month which includes both principal and interest, gradually reducing the loan balance. In a Bullet Repayment plan, you typically pay only the interest (or sometimes nothing) during the loan tenure, and repay the entire principal amount in one lump sum at the end of the term.
An Interest-Only repayment plan requires the borrower to pay only the interest component every month. The principal amount remains unchanged throughout the tenure and is repaid in full as a final payment at the end of the loan term. This results in lower monthly payments but a large final obligation.

Loan Eligibility Calculator

Your eligibility score (out of 1000) is a weighted aggregate of your Age (5%), Employment Type (5%), Credit Score (30%), Payment History (30%), and Fixed Obligation to Income Ratio (FOIR) (30%). A higher score indicates a lower risk profile and better potential interest rates.
FOIR stands for Fixed Obligation to Income Ratio. It is calculated as (Total Monthly Expenses + Existing EMIs) divided by your Monthly Income. Lenders use this to assess your repayment capacity. A lower FOIR (typically under 40-50%) increases your chances of loan approval.
No, using this calculator is a 'soft inquiry' and does not impact your credit score. It is a simulation tool to give you an estimate of your borrowing potential and likely interest rates.
While P2P lending is more inclusive than traditional banks, a credit score of 700+ is generally considered good and attracts lower interest rates. Scores below 650 may still be eligible but might attract higher interest rates to account for the increased risk.

Loan Refinance Calculator

Not always. Refinancing is beneficial only if the interest savings from the new loan outweigh the costs associated with closing your current loan (foreclosure charges) and processing the new one.
Yes, foreclosure charges are a significant cost when refinancing. They are usually a percentage of your outstanding principal. If these charges are high, they can eat into your interest savings, making refinancing less attractive.
Typically, the goal is to reduce EMI. However, if you choose a much shorter tenure to pay off the loan faster, your EMI might increase even if the interest rate is lower. Conversely, extending the tenure can lower EMI but increase total interest cost.
A general rule of thumb is that a reduction of 0.50% to 1.00% or more can be worthwhile, but you must calculate the exact numbers including all fees to be sure.
Extending your tenure will reduce your monthly EMI but will likely increase the total interest you pay over the life of the loan. For maximum savings, try to keep the tenure same or shorter if you can afford the EMI.

Can’t find your answer? Email us at care@1financep2p.com