How Much You Should Invest in Peer to Peer Loans?

How Much You Should Invest in Peer to Peer loans

Now that p2p lending is emerging and growing in India, it makes sense to ask the question “How much I should invest in peer to peer loans?”

New Asset Class
P2P Lending is a new asset class in India. It’s important to understand that it really is an asset class just like real estate, gold or stocks. You need to think of your portfolio of p2p loans just like any other investment, including how much to allocate to it versus other investment options.

While there are secured loans out there, loans secured by collateral like Real Estate or other assets, most p2p loans currently are unsecured so you need to keep this in mind when you invest. There’s lots of different reasons to borrow and some are outlined here in the borrower section of the i2iFunding website.

investing in Peer to Peer

Let’s examine a couple other asset classes so we can compare them.


Indians love their gold. Not just for ceremonial events like weddings but Indians are some of the most gold loving people on Earth. The average investor in most of the world usually allocates no more than 10-15% of their portfolio to Gold or other precious metals although for the average Indian this number is likely much higher.

Gold is not liquid and generates no income.


Stocks can be a good investment and they generally do not correlate with p2p loans. P2P loans are like a bond or other fixed income investment and stocks mean you own equity or a piece of the company. Specialized knowledge

is required to make great stock choices while it is easier to make good P2P loan investment choices.

According to the NSE the index of the NIFTY 50 increased from 7938.45 on January 1 up to 8677.90 as of this writing. That’s a very solid 9.3% return so far for this year. However, just as easily, stocks can go down as they fluctuate wildly and requires good knowledge about stock market and time to earn good returns. P2P loan minimums are very small with returns that are more consistent.

P2P Loan returns can get into the teens and even over 25% with good investment choices.

Real Estate

Property is often seen as a good investment but there are 2 requirements that make it very different from investing in a peer loan.

Down Payment

The down payment required is often in the 10-25% range and that prices many Indians, especially young Indians out of the market to buy property. If you can afford the down payment and the monthly payments this is certainly an investment to consider. P2P loan minimums are small.

You Have To Live Somewhere

While many people consider their home an investment, the truth is that it really isn’t.

Why? Because you have to live somewhere.

If you decide not to buy a home, you still have to pay rent or live at home or live somewhere. A home is not exactly a great investment since once you sell it, you still have to live somewhere. On the other hand, a 2nd home that you can sell and still have your own home is definitely a good investment. But then you need 2 down payments: one for the home you keep and one for the home you sell.

It starts to add up and your money is locked up in the property.

As you can see there are some widely varying options for your investment rupees including gold, stocks and real estate as well as peer to peer loans. The best choice of these assets for returns, risk, market and cost to get started is with p2p loans.

While how much you should invest is up to you, p2p loans are more liquid than real estate or gold and don’t correlate with stocks so they play an important role in building a diversified portfolio. If assets can rise together, they can also fall together so the lack of correlation is important.

Due to its low minimum investment and how much control you can have over what types of loans you can buy p2p loans like i2iFunding offers can generate great returns with less risk than other investment options out there. Sign up to lend your Rupees today at

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