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How to Build a Better Investment Portfolio from P2P lending

If you are a lender on P2P lending platform, you can easily build a better investment portfolio by diversifying, automating your investment and staying invested for a longer term.

Peer to peer lending in India is relatively a new asset class, but investors are already exploring it to include it in their investment kitty. If you have decided to become one of the personal loan lenders on a P2P lending platform, you would be also looking at building an optimal portfolio to get the maximum risk-return trade-off.

Here are some useful tips to build a better portfolio from P2P lending:

1. Diversify

The mantra of ‘don’t put all eggs in one basket’ applies to lending money online as well.

  • The investment amount

Unless you have a specific reason to offer loan to a single borrower or have a small investment size (for example, Rs10,000), you should spread the loan amount over a number of borrowers. So, if you want to invest Rs1 lakh, try to give it to at least 7-10 borrowers. This way, if one of the borrowers defaults, there wouldn’t be much loss to you. Diversify your risk, as simple as that!

  • Across the borrower profile

You will find borrowers from different personal, financial and professional backgrounds on peer to peer lending sites in India. They are salaried individuals, women entrepreneurs and even small business owners. So, it would be a good idea to select people from diverse backgrounds while lending money online.

  • Across risk categories

Each borrower gets a credit rating from the peer to peer lending companies in India. While, most personal loan lenders would prefer low risk borrower, it wouldn’t be a riskier proposition to lend money to one or two borrowers with medium or high risk rating. So, depending on your risk-return expectation, you can diversify across risk categories.

2. Automate Your Investment

Several P2P lending platforms such as LenDenClub offer automated investment service. If you are an individual or an institutional investor with large investment amount to disburse, then you can use automated investment. Instead of manually looking over each loan or borrower profile, you can save time by applying automated filters and get a quick overview. It also makes easier to manage the account with so many borrowers and huge investment to take care of.

3. Stay Invested

Most personal loan lenders make the mistake of withdrawing the interest return or principal repayment EMIs at regular intervals, even monthly or quarterly in some cases. However, it is advisable to stay invested for a longer period and re-invest the cash flow. This will fetch you more money through the power of compounding.

With a bit of careful planning and logic, you can always build a better portfolio in peer to peer lending in India.

LenDenClub is India’s largest alternate investment platform which started operations in India in 2015. We have been helping investors diversify their investments beyond traditional investment instruments ever since.



The Reserve Bank of India does not accept any responsibility for the correctness of any of the statements or representations made or opinions expressed by Innofin Solutions Private Limited, and does not provide any assurance for repayment of the loans lent through its platform.

LenDenClub is an Intermediary under the provisions of the Information Technology Act, 2000 and virtually connects lenders and borrowers through its electronic platform via the website and/or mobile app.

The lending transaction is purely between lenders and borrowers at their own discretion, and LenDenClub does not assure loan fulfilment and/or investment returns. Also, the information provided on the platform is verified or checked on the best efforts basis without guaranteeing any accuracy of the data/information verification. Any investment decision taken by a lender on the basis of this information is at the discretion of the lender, and LenDenClub does not guarantee that the loan amount will be recovered from the borrower, fully or partially. The risk is entirely on the lender. LenDenClub will not be responsible for the full or partial loss of the principal and/or interest of lenders’ investment amounts.


*P2P investment is subject to risks. And investment decisions taken by a lender on the basis of this information are at the discretion of the lender, and LenDenClub does not guarantee that the loan amount will be recovered from the borrower.

** Average value mentioned is the weighted average of returns received by investors

© 2023 LenDenClub by Innofin Solutions Private Limited | CIN: U74999MH2015PTC266499


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