Financial Education

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Sensible Borrowing

When you apply for a credit card, a loan, or even insurance, lenders check your credit score. This number is used to evaluate your creditworthiness. Your creditworthiness basically is an estimate of how likely you are to repay your financial commitments.

Your credit score can impact everything from your ability to get a loan or a credit card, to rent an apartment, to get a mortgage or even auto insurance. Your credit score can also play a role in determining your interest rates. The commonly used FICO credit score ranges from 350 (very unlikely to repay) to 850 (very likely to repay). Often a 720 or higher is considered a strong FICO credit score, but different lenders have different standards.

Yes. You can have different credit scores depending on which credit reports and which scoring models are used. There are three major credit reporting agencies that provide credit reports: Experian, Equifax, and TransUnion. There are also different credit score models that are tailored to different industries and therefore produce different credit scores. For example, your auto lender will likely use a different score model than your credit card company.

Investment Tips

Once you have funded your account, you are ready to start investing. Here are some key concepts that will help you build a portfolio that matches your investing goals.

Diversification is a way to manage investment risk by spreading your money across many different investments to reduce the exposure to and the risk of a single investment. Investing in a combination of .. that are not correlated can lead to a return with lower volatility and less unique risk. An example of the Power of Diversification Diversification helps to limit the impact of any single charge off by spreading your money across many different Notes. For example, say you have Rs.25,000 to invest in RupeeCircle borrowers. You could invest: Rs25,000 in one borrower; or Rs2500 in 100different borrowers. If you invest in one borrower and that borrower becomes late and the loan eventually charges off, you could potentially lose 100% of your total investment amount. If you invested a relatively equal amount in 10 different borrowers and that same borrower becomes late, your potential loss on that particular Note would be limited to 10% of your total investment amount.

In RupeeCircle , you browse the loans currently listed on the site and build your portfolio. Browse the loans currently listed on the site Place one-time orders for the specific borrower that you choose

Let's say you build a portfolio of loans paying you an average of 18% interest per year. Even borrowers with great credit can default, and this portfolio may see charge-offs of about 5% per year on average. RupeeCircle charges a 1% fee to process the payments the borrowers make on their loans. So after accounting for defaults and fees, you could earn 12% on average per year.

Key Risks Of Peer To Peer Lending

Lending Risk

Lending money can cause loss of some or all of your money if the borrower does not repay their loan. This risk is reflected in the comparatively high returns you are likely to receive for your investment. However, it pays to remember that you may still lose your money even if you choose a loan that has been listed as a low risk. In RupeeCircle , we have created a safeguard provision fund which will save Investor in case of borrower going to default. If a Borrower defaults after four months of arrears, that particular Loan Contract is automatically assigned to safeguard fund and a claim is made on your behalf to reimburse your principal.

Assessing Credit Risk

The operators of P2P lending platforms often make claims about a borrower's ability to repay the loan. The operators may also rate or grade borrowers by their level of creditworthiness. It's important to keep in mind that these ratings are based on a point in time assessment only and are not the same as the ratings used by an external credit rating agency or even consistent with the ratings used by other P2P lending platforms. Before you invest you should understand and feel comfortable with how the borrowers are assessed before they are given a loan.
RupeeCircle applies a lot of due intelligence to assess risk worthiness of the borrower and classifying them in different risk grade.

Investments In P2P Lending Are Not Deposits

Investing through a P2P lending platform is not the same as putting your money in a deposit account with a bank, building society or credit union. The Government guarantee on deposits that applies to savings products such as a term deposit does not apply to funds invested in peer to peer lending.

Responsible Lending

  • You will not borrow money to lend, either from this platform or otherwise.
  • You will honour your commitments and not renege on your loan offers after listing it on our site.
  • Tread the safe path! When it comes to online peer-to-peer lending, it is best to take the safest path. Assessing the eligibility of the borrower is of utmost importance to ensure that lenders are not cheated of their money. Prior to lending, you need to evaluate the borrowers in terms of requirement for the loan and their capability to repay the amount within the stipulated time frame. Responsible lending is the key for all lenders to make quick money.
  • You will adhere to all laws relating to income tax and pay your taxes on the income so generated.
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