Curious about how the 12% Club makes money while helping you earn and borrow money seamlessly? BharatPe’s innovative peer-to-peer lending network not only links investors and borrowers directly, but it also thrives financially without traditional banks. Are you ready to learn the secrets behind its business model? Let’s dive in and see how the 12% Club keeps its financial engine working well!
About 12% Club
BharatPe created the 12% Club, a platform where people can lend to and borrow from each other. This system lets investors make up to 12% yearly returns and helps borrowers get money at good rates. The platform links lenders straight to borrowers cutting out regular banks. The app has an easy-to-use design and streamlined processes offering flexible money options.
Open an account with Angel One– Click here
Partners
The 12% Club has teamed up with some finance companies that the RBI approves. These include Liquiloans (NDX P2P Private Limited) and LendenClub (Innofin Solutions Private Limited). BharatPe also works with Axis bank. NDX P2P Private Limited has registered the app, which makes sure it follows the rules and is legal.
How 12% club app make money?
The 12% Club, a peer-to-peer (P2P) lending platform affiliated with BharatPe, allows investors to earn up to 12% yearly returns. Here’s a detailed look into how the 12% Club generates revenue:
- Interest Rate Spread
Investors lend money through the 12% Club platform. Borrowers, often individuals or small businesses, receive these loans at higher interest rates.
Earnings: For instance if borrowers are charged18-21%, borrowers pay much more than what is promised to lenders as the gap between borrowing and return rate(6-9%) becomes its chief revenue source.
- Service Fees
The 12% club can charge borrowers a service fee or processing fee for facilitating loans.
Earnings: These fees can either be a percentage of the loan amount or a flat fee thus creating an alternative stream of revenue outside of the interest rate spread.
- Late Payment Fees
Late payment fees are levied by the platform on those borrowers who don’t make timely repayments.
Earnings: In this case, these fees are usually higher than normal interest rates and they can therefore generate substantial extra revenues.
- Default Management
Such companies will dispose off defaulted loans at discounted prices to Asset Reconstruction Companies (ARCs).
Earnings: While this is not a direct source of money, it helps to offset potential default losses, allowing the platform to remain profitable overall.
- Fee Structure for Risk Management and Underwriting:
The platform partners with Non-Banking Financial Companies (NBFCs) such as Lenden Club and Liquid Loans to share risk management obligations.
Earnings: These collaborations may include fees or commissions from NBFCs for finding and processing loans.
- Investor Fee
While not always the case, some P2P networks charge investors a management or transaction fee for using their platform.
Earnings: This could be a tiny proportion of the invested money or earnings, providing an additional source of revenue.
Open an account with Upstox– Click here
Conclusion
The 12% Club makes money primarily from the interest rate differential between what it charges borrowers and what it pays investors. Service fees, late payment fees, and strategic collaborations with NBFCs all contribute to additional revenue. By managing these varied revenue streams, the platform is able to continue operations while still providing competitive returns to investors. 
If you found this post useful, please comment “useful”. And I request you to Please share this post on Facebook/WhatsApp with those who need this.
FAQ
1. How does the 12% Club handle loan defaults?
The 12% Club may handle loan defaults by selling failed loans at a discount to Asset Reconstruction Companies (ARCs). This helps to reduce potential losses and maintain overall profitability.
2. In addition to interest, what other expenses does the 12% Club charge borrowers?
In addition to the interest rate, the 12% Club may charge borrowers service or processing costs, as well as late payment fees if repayment is delayed. These additional fees add to the platform’s revenue.
3. How does the 12% Club ensure compliance with regulations?
The 12% Club works under the registration of NDX P2P Private Limited and interacts with RBI-approved Non-Banking Financial Companies (NBFCs) such as Liquiloans and LendenClub to ensure regulatory compliance and legitimacy
