The popular Credit Card Bill Payments App CRED has come up with Cred Mint, a P2P money lending feature where you can invest your money and earn upto 9% per annum. The money is used by CRED to give out loans via their CRED Cash product.
The working principle of Cred Mint is similar to the 12% Club App.
We deposit our money with banks and other financial institutions. They offer us Fixed deposits and other schemes to grow our idle money. They use this money to offer upfront credits (via credit cards), loans, and other products and earn interest on that. This is a win-win situation for both us and the banks, where they earn from putting our money into the market and giving us a marginal interest while keeping the lion’s share for themselves.
P2P Lending has one major difference from traditional banking: Here there is no third party (financial institution) involved between you (the lender) and the one accepting the loan (the borrower). Basically, you become the bank here.
RBI has a list of registered P2P Lending platforms, Cred Mint is one of them. You can invest or withdraw your money with one click. It will be deposited into your bank account in one go. The rate of interest is up to 9% per annum.
The money you invested will be available for other Cred users to borrow via the Cred Cash feature. You can check your investment progress in real-time every day.
- Cred Mint is powered by Liquiloans, which is an RBI regulated P2P NBFC. So, the platform has got some credibility in the first place.
- Secondly, the CRED app is only accessible to users with a high credit score. People with Nil or poor credit scores are not allowed to access the CRED app at all. This should minimize the defaulters from accessing the app itself.
The only risk with Cred Mint is that your principal amount is itself being given out as a loan. In many other forms of investments, the returns are not guaranteed, however, you can recover most of your principal amount. But here, your principal amount is itself into the risk, which puts it into a very high-risk category.
You can also check out how you can use Cred App for credit card bill payments.