<P> Peer - to - peer lending , also abbreviated as P2P lending , is the practice of lending money to individuals or businesses through online services that match lenders with borrowers . Since peer - to - peer lending companies offering these services generally operate online , they can run with lower overhead and provide the service more cheaply than traditional financial institutions . As a result , lenders can earn higher returns compared to savings and investment products offered by banks , while borrowers can borrow money at lower interest rates , even after the P2P lending company has taken a fee for providing the match - making platform and credit checking the borrower . There is the risk of the borrower defaulting on the loans taken out from peer - lending websites . </P>
what is peer to peer lending in india
the practice of lending money to individuals or businesses through online services that match lenders with borrowers