Various fees charged by P2P platforms
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What do P2Ps charge a borrower?
Every loan involves a cost. From the time of signing up to delay in repaying the loan, here’s a list of charges a borrower needs to pay while taking a loan from a peer-to-peer (P2P) lending platform.
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Registration fee
Most P2P platforms charge a non-refundable, one-time fee of Rs 100-1,000 at the time of registration. This fee is to cover the cost, time and effort incurred by the company for risk assessment and screening of borrower's profile.
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Loan processing charge
This varies from 1-10 per cent of the disbursed amount, depending on the risk grade and loan tenure. An average fee of 2-4 percent of the loan disbursed is charged by various P2P platforms.
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Interest rates
Interest rates on a P2P loan are set by the lender and the borrower. However, there is an interest rate range that both lenders and borrowers can negotiate within. The range can be between 14 percent and 36 percent and would depend on the loan term, borrower's financial and social environment.
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Prepayment charges
There are no prepayment charges after three months from the date of loan disbursal. However, to protect investor interest, any pre-closure done prior to three months can be done only after paying interest due for a period of three months from the date of disbursal.
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Late payment fee
Borrower may be charged a fee for delay in loan repayment. A platform may charge you for all expenses incurred, including legal and operational, for the collection of delayed EMI or settling of account. If a legal notice sent by the platform for collection of dues, you may be charged Rs 500 by the P2P platform.
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Charges for cheque bounces
A borrower may be charged a fee of up to Rs 250 in case of cheque bounce.
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Stamp duty
All applicable stamp duty charges will be borne by the borrower as per actual cost incurred.
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Others
You may be charged by the platform if there is a change in bank account details, EMI date or loan terms after any funding commitment. These charges may vary with platforms. Some platforms charge a fee of Rs 200, while some others may charge up to Rs 1,000 for change in bank account details.