LenDenClub Peer to Peer lending platform connects a borrower looking for a loan with lenders on the platform who wants to give money to him/her.
The platform allows a borrower to take a loan starting from Rs. 1 to Rs. 10 Lakhs based on borrowers’ risk profile. Any lender on the platform can lend up to 5% of the loan amount to give a loan to a borrower.
LenDenClub helps lenders understand the borrower’s risk and the probability of default based on past borrower behavior. It also facilitates the agreement and other operational work through its digital platform. By providing the platform on which lenders can find borrowers, their risk analysis, probability of default, collection support (on the best effort basis), agreement facilitation, and escrow transactions support, the platform charges fees from the lenders varying between 0% to 5% unless specified otherwise in the borrower profile. The Platform will charge a fee only when the lenders received EMIs/repayments from the borrowers. Further, in case of higher default any lender’s portfolio, the platform may provide a partial or complete waiver of fees at it’s discretion.
Like lenders, the platform also provides services to borrowers. The borrowers can apply for a loan on the platform. The platform does credit and risk assessment of the borrower through various data points like digital transactions, bank statements, credit bureau data, digital footprints, etc. If the borrower is selected through the risk and eligibility criteria of the platform he/she will be connected with the lenders on the platform. By providing services of on-boarding, risk, and credit assessment, connecting with lenders on the platform, agreement support, disbursement, and repayment facilitation, etc., the platform charges fees varying between 0% to 7% or any other amount conveyed at the time of on-boarding itself.
All transactions on the platform are done from Escrow bank accounts maintained with ICICI Bank Limited via ICICI Trusteeship Services Private Limited. The funds brought to the platform lie in the escrow account and are only meant to be lent into borrowers’ loans as specified or chosen by the lender. Platform cannot and does not use these funds for any activity other than this specified use nor earns any commission from the bank on idle money lying in the escrow account.
The platform earns fee-based income from either or both lenders and borrowers.
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