The Bidding Process for Lenders and Borrowers | The Agreement | Faircent
For Lenders
Lenders have to follow a simple registration process and provide the required documents as mentioned on our site. Once the verification is complete, the lender has pre-funded the Lender’s Escrow account with the amount he wishes to invest; he can start investing.
Loan listings are visible on the lender’s dashboard along with relevant financial, credit and personal details of each borrower. Lenders can use this information to make an informed choice and send a proposal to fund the borrower. Offers are accepted on first come first serve basis. A lender can fund up to 10% of a borrower’s total loan requirement.
Loan disbursal begins only after the official loan agreement has been signed and the borrower has provided the required number of Post-Dated Cheques towards security and repayment of the first EMI. After the loan is disbursed, the Lender will receive EMIs on or before the 15th of every month. If a borrower fails to pay an EMI within a stipulated time, a penalty is levied on the borrower which is payable directly to the lender.
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For Borrowers
Borrowers have to follow a simple registration process and provide the required documents as mentioned on our site. As part of the verification process, the team gets in touch with the prospective borrowers. On the basis of these documents, every borrower will be identity-verified, credit-checked and risk-assessed and our automated system will provide an indication about the Borrower’s capability to efficiently repay the loan. The rate of interest ranges from 12% to 28% and the loan tenure from 6 months to 36 months.
Once the loan is listed, multiple lenders can view the listing and send proposals to fund it at the given interest rate. A lender can fund up to 10% of a loan requirement or up to Rs. 50,000/- whichever is lower. Hence, each loan will be funded by at least 10 lenders. All proposals are accepted on first come first serve basis. Loan disbursal begins only after minimum 75% of the borrower’s fund requirements have been fulfilled, Borrower has paid the relevant administrative fee to Faircent, he has signed the loan agreement with all the lenders and provided requisite number of post-dated cheques towards security and EMIs payable to each lender.
The borrower has to make all EMI payments by the due date fixed between 1-15th of every month. Any failure to do so within the stipulated time invites a penal charges per lender of 18% per annum for each instance of delayed repayment. Faircent will also charge a collection penalty and fee towards issuance of legal notice.
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The Agreement
Once the lender and borrower have reached a mutual agreement, Faircent facilitates the signing of a legally-binding agreement between the borrower and the lenders.
We use a tech-enabled, paper-less and presence-less process wherein the borrower and lenders sign the legally-binding agreement online. The agreement is available online on the borrower and lender’s Faircent account. They login to their respective accounts, read and understand the terms and conditions mentioned, “digitally sign” by clicking on the acceptance box under the agreement and the process is complete. The agreement is then sent to both the borrowers and lenders through email for their records. The process, though legally binding just like a physical agreement, is faster and more efficient ensuring faster flow of loan amount from lender to borrower.
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