Alternative Investments: P2P, understanding borrowers profiles

Alternative investments are gaining popularity in India (and across the globe) with busy professionals. Many look to build a passive income and discover P2P is a great option. P2P lending facilitates a direct transaction between individuals in need of credit and those willing to lend from their surplus funds.

Lenders are always concerned about the risk of default. Find out the due diligence undertakes to mitigate this risk. It’s the reason why we selected them as our P2P partner.

How Does It

The rule engine is an in-house algorithm. It assigns different weightages to various factors to compute a score that helps understand a borrower’s risk profile. It is this risk profile that determines the interest rate, loan tenure and amount at which the borrower’s loan request can be listed on the platform to secure funding from the lenders. Interest rates are directly proportional to the risk profile. For example, loans listed at high-interest rates indicate a high-risk profile while lower interest rates mean lower risk.

Various factors are considered by’s fully automated credit evaluation mechanism to determine a borrower’s risk profile.

Ability of the borrower to repay the loan: This is understood through a detailed study of the borrower’s income & expenditure behaviour. It is gauged through their banking habits. A healthy percentage of income saved, and lower debt ratio reflects better ability of the borrower to repay his/her financial liabilities.

Stability of the borrower to repay the loan in a timely manner: It refers to the stability in borrowers personal and financial status that supports his/her loan repayments. Criteria assessed is the nature of borrower’s residence i.e. rented/self-owned, length of stay at the same address, length of employment in the same organization etc.

A borrower may have the ability and the stability to repay their loan in a timely manner, however intentionally default due to habit or lack of financial discipline. The intention is understood by analysing the past repayment behaviour of the borrower towards their financial liabilities. Delayed repayments in past financial transactions reduce the chance of loan approval.

Other than analysis of financial, credit and personal data, also undertakes telephonic verification to get first-hand information from the borrowers as well as physical verification at both their residence & office address. All documents submitted by the borrower are also verified for forgery using state-of-the-art technology. This data is made available on the borrower profile for lender perusal.


Alternative investments offer attractive returns for busy professionals and offer passive income options. With P2P, lenders often feel that investing in borrowers with high-interest rates will lead to high returns. That’s is not necessarily true as high-interest rates also indicate a higher possibility of default – counter-productive to providing a passive income.

A smart investor takes full advantage of the partnership between Cube Wealth and and skips all of this worry. They simply select their risk category and a custom P2P portfolio hand-picked for them. Investors get the full expertise and comfort of the borrower assessment without doing any of the work themselves.

It’s the smartest way to manage your P2P portfolio and experience the high returns of an alternative investment. It’s exactly what every busy professional wants. Book a free call with your personal wealth coach today or read more about P2P lending via Cube Wealth here.

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