The interest rate on the loan is calculated dynamically based on the agreed rate of interest between Lender(s) and the Borrower. Since, the loan requirement may be fulfilled by more than one Lender; different interest rates may be applicable for the amounts funded by each lender. The EMI for each loan would be different basis the interest rate agreed between Lender and Borrower.
Multiple lenders can bid to provide loan to the borrower within interest range indicated by the Borrower. They can fund minimum of 20% of a borrower’s total loan requirement going up in multiples of 5% and maximum upto 100% of loan requirement. Since the Borrower is looking for minimum rate of interest, he would obviously prefer the lowest bidder and the lender has more chances to win the bid if he bids close to the lowest range indicated by the Borrower. We keep this fully transparent so that Borrowers and Lenders can take decision basis as much information available.
Following is stage wise process for deciding rate of interest:
Step1: Borrower completes the Personal and Occupational Information and fills up the Loan Request form. A Peer Loan Request No (PLRN) is generated on filing up of Loan Request form. A Borrower can only request for one loan at the same time and a separate PLRN is generated each time. The proposal is immediately visible to thousands of lenders on our site on the Loan listing page.
Step 2: In case the Borrower does not want to take the proposal for bidding (generally the case when Borrower wants time to approach lenders and give them time to complete due diligence), the rate fixation could happen in an offline manner through bilateral negotiations facilitated by Antworks Money team. In case a lender is interested in expressing interest in a Loan listing, he or she can do it by clicking Express of interest (EOI) button and Antworks Money P2P Loan Services team will facilitate the discussion between Borrower and Lender.
Step 3: After proposal is listed on the site, Borrower has the option to take it to bidding any time of his choice by clicking Start bidding button available on his profile page (biding section). When the Borrower clicks on the start bidding option, the proposal will start appearing in the Active bid listings. In case a Lender is interested in participating in the Bid, he can do so by clicking bid button on the active bids page.
Step 4 : When a lender bids, the bid is registered provided:
He is an active Registered Lender
He is eligible to bid which means that he has not bid for more than 10 active bids. Antworks Money has discretion to relax this requirement on case by case basis.
His bid is meeting the criteria relating to amount, i.e minimum amount say 20% of loan amount and going up by 5%
His bid is in the range provided by Borrower, lowest being lower range provided by borrower, then going up by 0.25%
|Step 5 – Bid is deactivated on happening of any of two events:|
|A. Bid registered for more than 125% of loan amount|
|B. Expiry of 336 hours from the time bid starts|
Step 6: A lender has option to view both the Loan Listing pages and Active bids Page on the site and search listing on basis of different criterion.
Step 7 – if bid is deactivated on getting necessary response, bid will be declared successful and if bid is deactivated as it failed to get full support, the bid is declared unsuccessful
Step 8: The system will automatically chose the bids which were received at the lowest Rate of Interest. However, there may be a few complicated situations out there, which are resolved by system by applying a set of standard rules as listed below:
|1. If two or more persons have bid at the same rate – system will select the bid of person whose bid amount is more|
|2. if two persons have bid at the same rate and same amount – system will select the bid which was submitted first|
|3. What happens if the bids received at cut off rate are more than 100% – the loan amount allocated to last bidder is reduced by cumulative Bids received at cut off rate less loan amount|
Step 9 : The system automatically selects the winning bidder and the Borrower and the lender is informed through a message on his Antworks Money Profile Page and through SMS on the registered phone number. When both parties give the go-ahead, the process of signing the formal loan agreement is initiated.