Faircent FAQs | Lenders/Borrower Frequently Asked Questions | P2P Lending
BORROWER FAQS
Q: Why borrow through Faircent?
A: Faircent offers the borrowers a lower interest rate and less hassle than traditional financing options. It offers attractive fixed rates, an easy online application, friendly service and no hidden fees.
Q: How do I get started?
A: Simply click on the Sign Up Now icon and register through the simple step by step process as instructed. Once you have filled the basic information required and uploaded the documents required, Faircent risk assessment team will identity-verify, credit-check and risk-assess your profile. If qualified, your registration as a Borrower will be approved and you can apply for loan on the Faircent platform.
Q: Why do you require documents?
The documents are required to identity-verify, credit-check and risk-assess a borrower before registration. Apart from the CIBIL score, we use various other parameters like ability, stability, past performance and intention of the borrowers, which are evaluated basis these documents. The documents provided like salary slips, bank statements, ITR’s, balance sheets etc. help in taking a collective and transparent decision ensuring a fair field for the borrower.
Q: Why should I pay filing fee?
The filing fee is towards the considerable time, effort and resources spent by our credit evaluation mechanism to carefully assesses each borrower profile. The filing fee is non-refundable and payable at the time of disbursement only by the borrower funded through the Faircent portal.
Q: How much can I borrow?
A: At Faircent, loan disbursal is dependent on loan requirement. For personal requirements, loan amount can vary from Rs. 10,000/- to Rs. 5,00,000/-. For business purpose, a borrower can apply for a loan upto Rs. 10,00,000/-.
Q: Will I be funded by an individual lender or by multiple lenders?
A: As per Faircent policy, no single lender can fund the entire loan requirement of a borrower. Hence, your loan will be funded by multiple lenders.
Q: Can I pre-pay my EMI? Can I repay my loan early if I like? Are there any charges?
A: Pre-closure of loan can be done after three months from the disbursal of the loan without any additional charges. Prior to three months, to protect lender interest, pre-closure can be done after paying balance interest due to lenders for a period of three months from the date of disbursal. This is payable directly to Lenders. Faircent charges a one-time non-refundable pre-payment fees of Rs. 500/-.
Q: Can I choose my monthly repayment date?
A: The repayment date can be decided mutually between the Faircent team and the Borrower for any date between the 1st – 10th of every month. This is decided basis the date on which the borrower’s salary is credited.
Q: What interest rates can I expect to pay?
A: Interest rates are suggested to each borrower by an automated credit appraisal system that uses the personal and financial information provided by borrowers across more than 120 criteria using more than 400 data points to risk-asses the borrowers and understand the strength of their credit profile. The interest rate thus assigned ranges from 12% to 28%. However, Unrated Borrowers can be registered at higher interest rate.
Q: On what parameters does Faircent verify my profile and check my credit-worthiness?
A: We use a highly-developed, technology-driven process of verification across more than 120 criteria using more than 400 data points basis the personal and financial information and documents provided by the borrower. Each borrower is identity-checked, credit-checked and risk-assessed by our experienced team. The intention, stability and ability of borrowers is evaluated and understood.
Q: Does Faircent.com undertake physical verification?
A: Yes, Physical verification at both residential and official address is undertaken after prior appointment. This is undertaken to verify the identity of the Borrower.
Q: Does Faircent require references?
A: Yes, as part of the verification process, we require 4 references from your professional or personal contacts who should be able to verify your identity, intention, ability and stability to take and repay a loan.
Q: How much time does it generally take before a loan is listed?
A. Once a borrower Signs Up, provides basic information, pays the non-refundable filing fee and uploads the required documents, the risk assessment team takes 48-72 (office) hours to evaluate and verify the borrower; basis which the credit appraisal mechanism sets the parameters for the loan –loan amount, rate of interest and loan tenure. Once the borrower accepts the same, the profile is made live on the portal. Thus, your loan requirement will be available on the website for lenders to fund between 48-72 hours from your first log-in on the website.
Q: How much time does it take to find a lender? How long can my loan request be available for lenders to fund?
A: All loans are listed on the platform for 15 days which may, under special circumstances, be extended to a maximum of 30 days. This is known as listing period. However, the funding of the loan cannot be predicted or controlled as it is dependent upon attracting sufficient lenders. Credit-worthy borrowers can get funded within minutes and some borrowers assigned high rate of interest can take a few days. You can monitor lenders interest anytime by logging into your account.
Q: How long is the disbursal process?
A: The disbursal process starts only after the borrower has paid the processing fees, signed the loan agreement and provided the PDCs, NACH Mandate and any other documents required. This process is driven by borrower interest. By using technology-driven facilities available only on Faircent you can reduce this time to less than 24 hours. Post this process funds are transferred from lender’s escrow account to the borrower’s bank account within 12-24 hours. Thus, the entire disbursal process takes 24-48 hours. It is transparent and driven by borrower and lender interest with Faircent acting only as a facilitator.
Q: Why was my application declined?
A: Faircent holds the right to decline a listing in certain cases such as:
- The Borrower is unable to provide complete documentation or the same cannot be authenticated.
- These documents are required to evaluate the borrower’s credit-worthiness and intention/stability and ability to take and repay loan. Any deficiency on these parameters or in terms of past loan-performance of the borrower will lead to cancellation of listing of the borrower.
- Physical verification report is negative. It is established that the Borrower does not reside or work at the address submitted by the borrower.
- If at any stage of loan application, Faircent finds that misleading information was deliberately provided by the borrower with intentions to cheat and hurt the Faircent system, its Lenders, founders, stake holders, partners or employees or to infringe or steal the intellectual property of Faircent.
Q: What happens in case of delayed or non-payment of EMI?
A: Borrowers are morally and legally obliged to pay all dues in a timely manner. In case the EMI is not paid on the scheduled time, a penal interest is payable as per Faircent policy for each instance of delayed repayment. These charges are paid to lenders. Faircent will also charge a non-refundable overdue charges per delayed payment which will be adjusted against repayment before adjustment of the delayed EMI amount. So, Faircent encourages all borrowers to make timely payments to avoid penalty charges.
In the worst-case scenario, if Faircent has to issue a legal notice to a defaulting borrower on behalf of the lenders then a non-refundable charge of Rs. 500/- per legal notice will be payable by the borrower to Faircent.
Q: I have defaulted on loan payments before or Banks/Financial Institutions have rejected my loan application. Can I borrow on Faircent?
A: Faircent will not approve of a listing if it does not meet with our credit and verification standards. However, we encourage applicants to work on improving their credit history by repaying their debt in a timely manner and then try again after six months.
Q: How are repayments calculated?
A: Repayments are equated monthly installments calculated using the reducing balance method. Your installment per month will remain the same throughout the tenure of your loan. The first installment may be different depending on the date of disbursal.
Q: Will Faircent provide me with my credit score?
A: Faircent does not provide you with your credit score.
Q: What information can be viewed about me?
A: Once your listing has been approved by Faircent, your profile can be viewed by all registered Lenders. This includes your full name, profession, purpose of loan, email ID and financial information as this information helps you to get a loan faster. However, this information will not be visible to general visitors to the website. For more information, please view our Privacy Policy.
Q: Will my address and phone number be available online on the website?
We do not show anyone’s address or phone number to prevent harassment. For more information, please view our Privacy Policy.
Q: Can I change the loan amount I want to borrow after applying?
A: No, to avoid confusions and maintain lender interest, we do not make changes to a listing after it has been made live on the website. To increase the loan amount, you can create a fresh loan request for the difference.
Q: Can my loan request be terminated or reviewed at any stage?
A: Yes, if at any stage the information furnished by you or the verification(s) initiated by us are found to be incomplete, fraudulent or unverifiable then funding request is terminated and consequently, the invest button on the profile would be de-activated. No fee paid will be refunded.
Q: How do I cancel my loan application?
A: Please write to [email protected] requesting cancellation of your registration as Borrower. Loan cancellation can only happen prior to disbursal of funds.
Q: How do I change my bank details or set up a new direct debit?
A: Please write to [email protected] stating both your old and new bank details. Swapping charges of Rs. 500/- per swap will be applicable and payable to Faircent.
Q: Can I be both, a Lender and a Borrower?
A: No. You can either be a Lender or a Borrower at a given time.
Q) What is e-mandate? How can I verify my e-mandate?
A: In simple words, e-mandate facility allows borrowers to pay their monthly EMIs and repayments online via Electronic Money Transfer and Auto-Debit facilities. Faircent will email you the e-mandate link. Click on the link and verify using either your debit card or net banking. The whole process takes not more than a few minutes. Once the mandate is aproved, all future EMIs will be directly debited from your bank account and collected by Faicent in its collection account and then disbursed directly to each Lenders escrow acccount.
Q: How is e-mandate beneficial to me?
A: This facility has been introduced as it provides the following benefits to borrowers:
- Quick and secure
- Convenient and less time consuming: Whole process takes just a few minutes
- Contactless
- Stress free. You do not have to worry about missing your EMI date.
LENDER FAQS
Q: Who can lend on Faircent?
A: Any individual, body of individuals, HUF, firm, society or any artificial body, whether incorporated or not, with a valid bank account in India and PAN card can lend on Faircent. RBI listed finance companies or Companies formed under the Indian Companies Act are also eligible to apply as Lenders.
Q: How am I helping others achieve financial success? How will this benefit me?
A: Faircent provides a unique opportunity to help borrowers get loans at a better rate of interest and in the process help Lenders earn a higher interest rate than what they would if they kept their money idle. The process is mutually beneficial and is a win-win situation for both parties. However, please read the Terms and Condition to understand the risk involved.
Q: How do I become an investor on Faircent?
A: The process is simple. Please click on Sign Up and fill in some basic details about yourself. Our support team will verify your details and get in touch with you within 12-24 hrs. Once your registration is verified and approved, you can log on to your Faircent account and start lending.
Q: How much money can I lend? And for what period?
A: Using Auto Invest, depending on your investment approach selected, you can start by investing from Rs. 500/- per loan. Borrowers are registered on the website for a loan period up to 36 months. You can choose the Borrower according to the loan period that suits you.
Q: Why does Faircent need to verify my details?
A: Faircent conducts a verification process of the data and documents provided by Lenders. In addition, we appraise each request to ensure that concerned Lender can afford to give out loans within the boundaries of statutory laws of India. We also make sure that Lenders do not use our platform to fund any prohibited actions or purposes.
Q: Can I choose the date to get my repayments?
A: No, repayment dates are fixed in between 1st to 15th of every month.
Q: What kind of returns can I expect?
A: Returns depend on the credentials of borrowers and the ongoing demand for lenders in the Faircent marketplace. We have an automated system, which assigns a rate of interest to each borrower. It ranges between 12% to 28%. Returns depend on how a lender spreads his investment.
Q: What is the maximum amount I can invest in one borrower?
A: An individual lender can invest up to 10%, HNIs (High Net worth Individual’s) up to 50% and institutional lenders upto 100% of the total loan amount requested by an individual borrower. This policy is to hedge the risk of the lenders by spreading their investments across borrowers.
Q: How safe is my money?
A: All borrowers listed on the Faircent marketplace are curated through various data points. Infact, Faircent has a strict borrower selection criterion. Although, this is unsecured lending, lenders can seek legal help and Faircent also has a soft recovery and collections process to ensure the safety of the monies invested through the platform. However, you must understand that this does not ensure guaranteed returns or zero defaults. Your money is not insured and is not risk-free. Please read and understand Terms and Conditions before investing. Contact Us for any clarifications.
Q: How are repayments calculated?
A: Repayments are equated monthly installments (EMIs) calculated using the reducing balance method. Your installment per month will remain the same throughout the tenure of your loan. The first installment may be different depending on the date of disbursal.
Q: Do I have to put money upfront into my Faircent account?
Yes. To ensure secure, fast and smooth transfer of funds with every transaction on the platform, Faircent has opened a Lenders Escrow account with ICICI Bank under the trusteeship of IDBI Bank.You need to transfer the amount you wish to invest through Faircent into their Escrow account.
Q: How can I fund or recharge my escrow account?
A: You can fund or recharge the Lender Escrow account using the payment methods:
- NEFT/RTGS
- Netbanking/Debit card
- UPI
- PayTM
- Cheque
To know more click here
Q: I used UPI payment method to recharge my Lender Escrow account. Why is the transaction not reflecting?
A: To avoid delay in the recharge reflecting in your escrow account when using the UPI payment method make sure to scan the UPI QR code properly using an app on mobile that supports UPI. If you do not do a fresh QR code scan, then transaction may get delayed and will not reflect immediately in the Escrow passbook
Q: How can I use the UPI payment method to recharge my Lender Escrow account?
A: Every Lender Escrow account is assigned a UPI Virtual Payment Address which is like “FAIXXXXXXXXXXXXXX@icici” and can be found in the “Virtual Escrow Account details” section of your Escrow Passbook. You can use any UPI payment app like Google Pay, Phone pe or Bhim etc. to recharge your Escrow account by sending funds to the UPI virtual payment address (VPA) of your Virtual Escrow Account.
Q: I prefer to recharge my Lender Escrow account directly from my bank account. What precautions should I take?
A: Please keep the following in mind to ensure smooth transactions when recharging from your bank account:
- IMPS recharge is reflected with substantial amount of delay and hence its is best to use only RTGS/NEFT facility.
- Make sure you have entered the correct account number, IFSC code and amount as provided by Faircent team. Do cross check to make sure.
- When transferring funds from ICICI bank, please ensure that you choose the option “Transfer to the same bank”
- When transferring funds from any bank other than ICICI bank, please ensure that you choose the option “Transfer to other bank”
Q: Which payment mode should I use when recharging my escrow account through PayTM?
A: While recharging through the PayTM option, wallet is selected as a default mode. The same can be changed to debit card, net banking or UPI, as convenient. Net banking has the lowest fees applicable and hence could be preferred over other modes.
Q: Do I need to inform Faircent after recharging my Lender’s escrow account?
A: While it is not mandatory to inform (except in case of cheque deposits), in order to ensure smooth recharge please do share screenshot, especially for NEFT transactions, with your portfolio manager. If screenshot is not available then send an email with details such as mode of payment, Lender Investment ID, Transaction ID.
Q: How can I recharge my escrow account through cheque deposits and inform Faircent?
A: Cheques for the desired amount can be deposited directly in to Faircent’s bank account. Bank account name and number can be provided by your point of contact or portfolio manager. It is mandatory to share cheque details and deposit date and amount with your portfolio manager so that your escrow account can be updated once the cheque clears.
Q: When does the money go out of my virtual account linked to the Lenders Escrow account?
A: Once a loan transaction is closed with the borrower, he has signed the loan agreement and provided the PDCs the lender is officially informed by Faircent and the loan amount is transferred from the lenders virtual account to the borrower’s bank account immediately.
Q: What are the risks? How is the risk managed?
As with any lending, there are some risks, the biggest being that a borrower doesn’t repay. At Faircent we try to keep this risk to a minimum by ensuring that every borrower registered with us is identity-checked, credit-checked and risk-assessed by our experienced team. The loan is disbursed only after the borrower signs the legally-bound loan agreement. In case of default we use legally-compliant collections agencies to follow-up and collect missed payments on your behalf. Though we do our best to manage the risk at every step, defaults may happen. We encourage you to spread your investment across a number of borrowers to reduce risk.
Q: What happens in case of delayed or non-payment by Borrowers?
A: In case the EMI is not paid on the due date by Borrower(s), additional penal interest applicable as per Faircent Policy will be applied to the due amount for the duration of delay which Borrowers will be liable to pay. Also, as an NBFC-P2P, Faircent.com reports any defaults by Borrowers to the credit bureau.
In the worst case scenario, Faircent will facilitate the collection through our in-house collection mechanism and also send a legal notice on behalf of the lender to the borrower.
Expenses incurred for sending legal notices, by recovery agency and towards other legal proceedings are borne by the lender.
Q: Will I know my Borrowers?
A: Once a Borrower listing has been approved by Faircent, their entire profile can be viewed by all registered Lenders including their financial information and KYC details. However, we do not reveal the Borrower’s address and phone no. For further information, please view Faircent Policy and Terms and Conditions.
Q: Is my interest income through Faircent taxable?
A: All repayments you receive from Borrowers on Faircent will be without any tax deduction. We will provide an annual income statement to you to download from your dashboard. Earnings will be taxable as per the income tax rules that apply to you. Paying the applicable tax on income earned is your responsibility and Faircent is not liable for any default on the same.
Q: How long does it take to find Borrowers?
A: You can find active borrowers on the Faircent platform at all times. Credit worthy borrowers at low interest rates gets funded immediately and borrowers listed at high interest rates sometimes take a few days. It’s an open market place and finding a borrower matching your loan amount and desired rate of interest is dependent on your ability to manage your risk.
Faircent also offers Auto-invest a fully-automated tool that matches Lender’s investment criteria with borrower requirements, provides an indication about the Borrower’s capability to efficiently repay the loan. This is done basis certain criteria selected, approved and activated by the lenders on their respective accounts.
Going forward, all borrower requirements – personal, business, collateralized - will be first fulfilled through automated investment and only any balance requirement will be listed for manual investment option.
Q: Can a non-individual lend through Faircent? Can I invest through my company?
A: There is option for institutional lenders and NBFCs to fund through the website provided they meet the set criterion and accept the T&Cs. Please do CONTACT US to discuss this further.
Q: How is the lenders escrow account beneficial to me?
A: Escrow account ensures secure, fast and smooth transfer of funds with every transaction on the platform. Faster transactions lead to faster disbursal and faster investment. Automated, online transactions with least human interface means seamless accounting procedures.
Q: Is Faircent.com regulated by RBI?
A: Faircent.com is India’s first P2P lending platform to be receive the Certificate of Registration (CoR) as an NBFC-P2P from the Reserve Bank of India (RBI).
Q: Is there a minimum amount for recharging Escrow Account?
A: Yes. The first recharge should be for a minimum amount of Rs. 50,000/- and all subsequent recharges should be for a minimum amount of Rs. 5000/-. A non-refundable fee of Rs. 100/- will be charged for every recharge of less than Rs. 5,000/- in to the Escrow Account, which will be deducted from your escrow balance.
Q: What is the maximum investment limit for a lender as per regulations?
A: As per regulatory guidelines, the aggregate exposure of a lender to all borrowers at any point of time, across all P2P platforms, shall be subject to a cap of ₹ 50,00,000/- provided that such investments of the lenders on P2P platforms are consistent with their net-worth. You can increase your investment limit from Rs. 10 lacs up to Rs. 50 Lacs by submitting a Net Worth certificate certifying minimum net-worth of ₹50,00,000/- signed by a practicing Chartered Accountant (CA).
Q: How can I get the net-worth certificate to increase my lending limit to Rs. 50 lacs?
You can contact a practicing Chartered Accountant (CA), provide all relevant documents and procure the certificate. Faircent also facilitates this service at a nominal charge. To know more, please contact your Portfolio or Relationship Manager or reach out to us on [email protected]
Q: Can I withdraw my proposal to fund a borrower’s loan?
A: Once the proposal made by you is accepted by the borrower, you will not be able to withdraw it. Only if the proposal is not accepted by the Borrower will it be deemed to be withdrawn. This is because once the borrower has accepted, we need to disburse funds to him and hence withdrawal at that stage is unfair to him. You will appreciate there are multiple alerts, notifications and checks built in the user flow to ensure that your decision to fund the borrower’s loan is an informed decision.
Q: What is the definition of idle funds in my escrow account?
A: Idle Funds in Lender Escrow Definition: Idle Funds in Lender Escrow = Current Available Balance in Escrow as of 12 am - (Sum of Maturity Amount in last 24 hours + Sum of EMI repayments in last 7 days).
Q: What happens to the idle funds in my escrow account? Why is it moved from the escrow account?
A: Any funds above a value of Rs. 500 lying idle for more than 7 days in your lender escrow account would be automatically invested into the Faircent Double Freedom plan, unless you specifically notify us not to do so at least 2 Business working days prior to the expiry of such 7 days on our email [email protected], in which case we will immediately transfer your escrow account balance in excess of Rs. 500/- to your bank account as required as per regulatory P2P guidelines.
In the event you have not indicated any choice of reinvestment, the maturity amount (principal investment as well as earned returns) will be automatically reinvested via the Faircent Double Freedom Plan after a minimum period of 24 hours from its maturity date. As you may be aware, you are free to release your funds from the Faircent Double Freedom Plan should you want to within 24 hours of any investment into the same.
The objective behind encouraging you to invest is to enable your funds to earn more for you instead of lying idle in the escrow account. You can choose to withdraw such funds invested into the Faircent Double Freedom Plan or reinvest in a different plan anytime after 24 hours of such investment.
Further, if you have opted out of automatic reinvestment of idle funds into the Faircent Double Freedom Plan your idle funds will not be automatically reinvested, but by opting out, if there are funds in excess of Rs. 500/- lying idle in your lender escrow account for more than 7 days, they will be automatically transferred to your bank account. For funds equal to Rs. 500/- or less, you will have the option to wait till the balance therein exceeds Rs. 500/- before you can manually withdraw the amount in excess of Rs. 500/-, which is the minimum withdrawal limit from the Escrow Account, since we need to maintain a near zero balance in the Escrow Account as per regulatory guidelines for P2P platforms.
Q: What is Faircent Double?
A: Faircent Double aims to provide lenders with an investment option that helps them achieve portfolio efficiency without compromising on lender’s choice to free his funds. Lenders can benefit from a portfolio that can deliver stable returns without spending too much time and effort. Interested lenders pool in their money and authorize Faircent to disburse this into a diverse mix of loans and loan products offered to borrowers who as per Faircent’s algorithms have the repaying capacity to provide aggregate returns of up to 12% p.a. The product offers many plans with varied tenures.
Q: Why are there so many different types of plans available in Faircent Double?
A: Basis their investment objective, every lender has a different liquidity to return appetite from their funds. The various plans of Faircent Double have different tenure options from 1 day to up to 36 months. Similarly, lenders can choose from plans wherein both principal and interest is locked in during tenure or where they earn monthly income through interest credited to their escrow account. Thus, lenders can choose the plan that best suits their desire to maintain liquidity of their investments while earning returns.
Q: How is the Faircent Double portfolio built?
A: The portfolio is built by disbursing to a diverse mix of loans and loan products that as per Faircent’s algorithm have the capacity to deliver high aggregate returns. The algorithm cherry-picks the borrowers basis various parameters such as credit history, financial behavior, occupation, geographical location, education, demographics etc.
Q: How is the Faircent Double portfolio built to minimize risk?
A: Faircent Double portfolio is built and managed through a conservative approach and various steps are taken to mitigate risk:
- Diversification across many loan-segments basis tenure, interest rate, industry mix and borrower profile through an algorithm based on years of experience in credit data analytics.
- More effective spread across a large number of borrowers and loan products through analytics driven strategy.
- Reinvestment of monthly interest received, which are diverted to less riskier buckets using a scientific approach to portfolio management.
- The portfolio is closely monitored, regular re-calibration and course correction is undertaken.
Q: How are defaults managed under Faircent Double plan?
A: For loans under Faircent Double plan, analytics driven collection strategy has been formulated to minimize defaults. Defaulter’s data is scrubbed regularly, and concentrated effort is made towards recovery.
Q: What is the Lender processing fee payable payable in Faircent Double?
A: There is no lender processing fee for Faircent Double. Faircent charges a fee for managing the pool of loans. The portfolio management fee is performance-linked. Hence, Faircent is only able to earn a fee when the plan delivers. For eg. If the net returns post default (if any) is 15% p.a. and the return on loans to be provided to lender as per the plan selected is 12% p.a, then the Faircent Portfolio Management Fee will be 3%. If the net returns post default (if any) is 11.5% p.a. then the lenders will receive 11.5% while Faircent will not receive any Portfolio Management Fee in such cases.