The history of loan lending is thousand years old when people used to exchange things against the loan. In the digital era, we are living now, there are several solutions available for money-lending where the most promising option is the loan lending app development. These P2P lending solutions have made any person’s life easy where they effortlessly could borrow the loan.
If you are also planning to launch a loan lending app or platform, we have created a comprehensive guide to take you through the steps and all the aspects of developing loan lending mobile apps.
The loan apps are revolutionary mobile applications that have replaced the traditional money lending and borrowing process. It is such a great aid for those who search for the best loan options, and it rescues everybody who has faced a long queue at the banks or loan lending agencies for approval.
Instead of fiddling in the borrowers’ queue, these P2P loan apps facilitate instant approval. There are several apps available in the market which are being used by people worldwide.
The Peer to Peer (P2P) represents the new age sharing economy where P2P loan apps that work as a platform that connects investors and borrowers. Here banks work as an intermediary. There is a considerable rise in the value of global peer-to-peer lending.
The following are the statistics that you might be interested to know –
- In 2013, value 5 billion USD only then it reached 64 billion USD in 2015. It is now projected to reach 1000 billion USD in 2025.
- The growth rate of Peer-to-peer lending platforms will be 6.3% in 2021.
- By 2020, the number of mobile p2p payments users were expected to reach 126 million.
Table of Contents
What is a Loan Lending App?
These applications are fintech innovations that support borrowers to get the lending amount hassle-free. They can borrow the money from any legalized banks in their country as per the decided interest rate by the compliance. The method is very easy, and these apps work on the concept of the credit card.
For using these apps, users need to install and register on the app by themselves. The rest of the process is verification and validation, including KYC, checking eligibility details, and the addition of personal bank account details.
Before applying for the loan, the users have to check their eligibility, credit score, and the amount for which they are eligible. It saves lots of time for a particular user who is seeking a loan as per requirement. The reason for the loan may be whatever, but a money lending app is such a fine and promising option.
How Does a Loan Lending App Works?
The P2P loan lending apps work on the fine concept compared to traditional loans, where lender and borrower are treated equally. The borrowers can negotiate for the repayments and interest rates, where lenders can choose a borrower matching their criteria. It makes the loan lending app quite interesting.
Majorly lenders are common citizens, but businesses can also avail the of loan lending services in some cases. These loan apps work like an app like Uber, where it connects the borrower and a lender but does not offer the loan itself.
These apps offer a simplistic way to get the loan amount directly into the account. An individual does not go through the hefty process of form filling and other formalities. All you have to register yourself, follow just easy steps, and the amount will be in your account in less time.
In simple steps, you can understand it as –
- Download and Install the apps
- Signup for on boarding via the phone number, e-mail, or social media login
- The next step is to select the loan amount and submit the request.
- Choose interest rate
- Connect bank accounts to loan lending app account
It does not matter that a cash lending app builds on iOS or Android platforms it alerts the users timely regarding the payment such as deduction, overpayment, and other notifications.
How to Build a Loan App?
The following represents the basic process of loan lending app development. Although developing the app is not an easy task, so you need mobile app development experts.
Setting up the strategic goals can ensure the best transformation of an idea into an app.
2. Requirement Analysis
It is the first crucial step toward making a fantastic money lending app. Before initiating the development, you need to gather your requirement, and after fine analysis, you can move to further steps. The outcome of this step will work as the input for the next step.
To ensure the best user experience, fine UI/UX design will be an excellent thing.
4. Backend Development
For better functioning, a robust backend is required, and from the success point of view, a loan lending mobile application is necessary.
For fine working and to ensure the security of a lender & borrower, the loan must be tested robustly. It would be better if you tested the app in a real-time basis environment.
6. Deployment & Support
Once the app is developed and tested, it is the right time to deploy it on iOS or Android or both as a cross-platform app.
The Cost to Build Loan Lending App
The loan app is one of the trending segments of the mobile application development industry. Several factors affect the pricing of loan lending apps, and the most important factors are the development team and tech stack used to build the loan application.
Let’s check the important factors that influence loan mobile loan app development:
Business Model The first factor that affects the cost of an online lending business app is its business model. The reason is the developers will implement the functionality according to the business model, so the cost may be vary based on the complexity. The less complex model less price or more complexity, more cost. For example, to implement a particular business model, the cost will be required if any API is required.
App Development Team Size
For loan lending app development, you need experienced developers that you can get via three options: Setting up an in-house team, hiring a mobile app development agency, and hiring freelancers. You can choose any one of these as per your choice but remember that all these can cost you differently. Consolidate loan lending app development costs will range from $15,000- $30,000, and it may be high if you need more advanced features in it.
If you want to hire the developers on an hourly basis, then the following information you would like to read –
– North America: USD 50 – USD 250/hour
– South America: USD 20 – USD 75/hour
– Western Europe: USD 50 – USD 200/hour
– Eastern Europe: USD 20 – USD 100/hour
– Australia: USD 40 – USD 170/hour
– Asia: USD 10 – USD 50/hour
App Building Platform
The app-building platform is also a crucial factor that affects the cost. There are two major platforms: Android and iOS, so you can target any one of them or both. The decision will be yours. Suppose you want to target location-based users with more Android users, then you need to hire Android app developers.
Another example is, suppose if you want to launch your loan app for the USA market, you should note that around 56% of users use iPhone. So, you need to focus on iOS app development.
The reality is iOS apps are most costly than Android apps. If you are a start-up, then instead of going for native app development, the cost-effective option will be cross-platform app development.
The features of an app are like the soul of the body, which directly affects the cost of an app. For example, security is the major concern for any loan lending app. So, for implementing the high-grade mechanism, there will be an additional cost, and the overall price of an app will increase.
To make an app interesting, high-quality UI/UX is required. Although simple design can be implemented by spending few dollars, including advanced components will be more costly.
Other factors that affect the cost of loan apps are testing, hosting, maintenance and promotion.
Examples of Top-5 Money Lending Mobile Apps
It is such a great idea to reference top cash lending apps while creating the app. So, these are the following-
One of the top-notch apps inspires many loan lending mobile app developers and lending business owners to consider role model apps. It can lend up to $100,000 amount in the minutes.
Another fantastic loan app that users like to use in need of money lending. In case if any business requires term loans, they are eligible to take amounts up to $250,000; on the other hand, credit facilities allow up to $100,000.
It works as the finest loan matchmaker to match your request with the loan partners, including your requirements. It also provides offers to its users.
#4. Funding Circle
This awesome app offers a variety of loans such as term loans, merchant cash advances, business credit, working capital loans, invoice factoring, and others.
When it comes to invoice factoring, BlueVine is the best. Moreover, this wonderful app offers loans of up to $2 million, and it also offers an initial interest rate of 1%. With BlueVine, a requester can qualify in minutes for Paycheck protection programs.
Types of Loan Lending Apps Available in the Market
The first-ever step for loan lending is that a borrower has to decide what kind of loan they want to have. First, we need to discuss the loan type because the mobile app can be developed accordingly. So, the following are key types of loans available in the market that can be used for reference to develop a loan lending mobile app.
1. Unsecured Personal Loans- Best for Major Purchase
If you are going to take the loan for consolidating the debt, pay for home renovations, or for dream wedding expenses, then it is a personal loan even you can avail it for home improvement. An unsecured personal loan means you do not have to put collateral property like a vehicle, car, or more valuable things.
Depending on the credit, a person can get the loan on lower interest. Although before providing the loan, the lender usually views credit reports and credit scores to ensure your genuineness. If some users’ credit score is high, they are the right candidates to lend the loan.
2. Secured Personal Loans- Best for Lower Interest Rate
The secured personal loan is just the opposite of the unsecured personal loan as for it, a user needs to put the collateral against a loan. A secured personal loan comes with low interest compared to an unsecured loan. The lender finds it less risky as they have the borrowers’ assets until repayment. Although it is a risk for the borrower, suppose if they failed to repay, then a lender has the right to seize their assets.
3. Payday Loans- Best of Emergency Cash is Required
These are high-cost loans but duration-wise short and remain due by next payday. Under this loan, the conditions can be vary, such as loan amount, loan fees, repayment deadline, and the location where you live. The repay terms include a post-dated check or authorize automatic amount withdrawal.
The Payday loans amount remains near around $500 or less. According to the Federal Reserve, the type of loan has high fees, and in simpler terms, it can be equal to an annual percentage rate of around 400%.
4. Title Loans- Best in-Case You Don’t Have Any Other Option
It is a type of loan where borrowers need to submit the asset as collateral, and it is applicable in the condition where they do not have any other option for money lending. Suppose anyone needs money urgently, and as an asset, they want to put their car to be called a car title loan.
According to the Federal Trade Commission, the title loan amount ranges between $100- $5,500, and a borrower has to pay the amount between 15-30 days.
5. Payday Alternative Loans aka PAL- Best If Lower Interest Rates Required
It is a short-span loan and is provided by any federal credit union. The loan amount’s minimum range is $200- $1000. It is much affordable than a Payday loan, and repayment can be done within six months. The condition to get this loan is that a borrower must be a federal credit union member for at least a month.
6. Home Equity Loans – A Fine Alternative of Personal Loan
When a borrower needs a lump sum money, then they have to put their home collateral. They can get the amount equivalent to their property’s existing marketing value. Usually, the loan amount remains 85% of the property price. Here a borrower needs to take care of the payments that must be in their budget. In case of default, the lender can take possession of the property.
A mobile can be developed for any of the above loans, and the rest of the things will depend upon your requirements. If you own a loan lending business and want to launch your app, consulting with experienced mobile app developers is perfect. The important point is, before approaching the loan lending app developers, you need to be clear with your loan app idea. So, at the time of discussion with experts, you can represent it finely.
What are The Advantages of Loan Lending App Development?
There are several advantages of the borrow money app. Several online loan lending apps are available on the internet, and people are using them, especially youngsters who are afraid of standing in the queue due to their busy schedules and tremendous benefits.
So, let’s explore its advantages from the borrower and lender’s point of view.
A. For The Borrowers
#1. Emergency Funds in The Minutes
Having a lending app is great where borrowers can enjoy the process and make an instant request for a loan. The best thing is non-banking financial institutions are also involved in it, so there are ample possibilities to get the loan.
#2. Time-Saving Loan Solution
Offline loan processing takes too much time, and there are other hurdles too, so instead of wasting time in several formalities, P2P loan lending apps are much fine to avail the loan facilities from the lenders.
For the traditional process, a borrower needs to wait for the appointment with a lender or wait for the meeting with some banking official and all. At a specific time, they can seek a loan. But via an app, there is no need to wait for the official time. On app stores, the borrow money apps are available that a user can download any time and apply for the loan at their convenience.
#4. Less Documentation, Fast Processing
There is no need to prepare the hefty documentation while getting the money from the loan lending app. You only need identity proof, address proof, and income proof.
#5. Low-Interest Rates
Due to the competition in the market, several money lending apps offer low-interest rates that remain low compared to the banks. That can be low as 2.5%.
#6. EMI Tracking
With the help of the loan app, it is very easy to track the EMI status.
B. For The Lenders
#1. Fund Management
With the help of loan lending mobile applications, a lender can easily manage the funds as it facilitates the loan provider to add or set the loan amount limit, set the interest rate, and others.
#2. Right Amount To The Right Borrower
On the loan app, lenders can see the past history of borrowers, whether they are genuine or not, their previous history, the credit score of a particular borrower, and from whom they have taken the loan earlier if they have any existing loan and all. It helps them to lend the right money to the right borrower.
#3. Lending Process Optimization
These apps help lenders to optimize loan processing. Even they can well equip their field staff for fast loan processing. It includes data acquisition, screening, field investigation reports, client verification, and validation. The finance lending company cab utilizes it for finance lending.
#4. Seamless Loan Servicing
The loan lending process seems very easy but quite complex, so with the help of P2P loan apps, the process can be streamlined with ease. For example, the collection process will have a streamlined approach; the agents can easily track the loan requests and the repayment status of all borrowers or a particular borrower.
The Features you Should consider for Loan Lending App Development
For making a perfect loan lending app, implementing fine features is crucial, so these can be divided into two- i.e., User Panel Features and Admin Panel Features. You can find these features in most of the best money lending apps. So let’s check out what are these.
A. User Panel Features
Users can sign up via e-mail id, phone number, and social media.
#2. My Profile
This feature helps the user to add or modify the profile details at the loan lending app.
#3. Connecting Bank Accounts
A user can easily add their bank account or accounts to the app.
#4. Loan Application
This section user will use to send the loan application following by selecting the lender and filling in crucial details and requirements of the loan.
#5. Payback Period
Users can choose the payback period according to their choice, although the interest rates will depend on time duration and the lender’s policies.
#6. EMI Calculation
Based on the loan amount, users can calculate the EMI.
#7. Payment Scheduling
A borrower can schedule the payment with ease.
#8. My EMI
Here user can track their existing and paid EMI status within a single click.
#9. Money Withdrawal
The borrowers can transfer the received loan amount to their bank account to get the loan.
#10. Discount & Offers
This section showcase discount and offers published by the loan lending firms.
#11. Reward Points
Here users can check the reward point they have received after the transaction.
#12. In-App Chat
Regarding any issue, the users can contact the support via the in-app chat option.
Under this tab, users can see all important notifications they have received on the app.
B. Admin Panel
The admin panel has a secure login facility, including 2-factor authentication for the admin.
#2. Manage Loan Application
Empowers the admin to view, manage and approve or reject the loan application submitted by the user or users.
#3. Manage Offers
The admin can activate or deactivate the existing offers. Also, they can create individual offers for the on boarded customers.
#4. KYC Approval
It is one of the smart features of the loan lending mobile app that facilitates the admin to initiate the KYC process carefully, including video KYC, e-KYC, and collection of KYC documents in digital format.
#5. Profile Approval
Based on the KYC process, an admin can approve or reject the profile to ensure the onboarding of genuine borrowers.
#6. Customer Credit Limit Management
An admin can set the credit limit based on the loan amount available and request done by the users.
#7. User Management
Admin can add or delete the user profile based on the interaction statistics of the user with the app.
#8. On Boarding Bank Partners
It facilitates the admin to on boarding the bank partners on the app to ensure the fine loan servicing.
#9. CMS Integration
It allows admins to manage the content of the overall app.
Advanced Features That Can Make Your Loan Lending App Unique
#1. Loan Calculator
With the help of this feature, a novice can also calculate the loan amount or interest amount with ease. It is useful for all the stakeholders, such as lenders, borrowers, and field agents.
It works on a real-time basis so the admin or app owners can observe the performance of the loan app. It also allows generating the reports.
#3. Push Notifications
Via it, users stay updated about the ongoing offers and activities on the app.
#4. Bank Partner Management
It is one of the finest features that allow the app to function better with the collaborated banks.
The dashboard feature is an awesome feature that allows the app admins to take care of and observe the overall activities performed by users.
#6. Cloud Technology Integration
There is ample requirement of user’s data privacy, so integration of cloud technology will be great for the app.
Wrapping It Up!
The global peer-to-peer (P2P) has a considerable rise. The market size was valued at $67.93 billion in 2019 and expected to reach $558.91 billion by 2027 with a CAGR of 29.7%. The main objective of the peer-to-peer loan is to reduce the rate of interest for the borrowers and boost the returns for the lenders.
This platform is such a fantastic option for the borrower and also for the lender. So, if you are planning to launch your own loan lending app, it would be best to consider the P2P lending model and hire dedicated developers for creating the app.
Some Important Frequently Asked Questions
1. How Much Time It Will Take To Develop My Money Lending App?
Although the time required to develop a money lending app is 3-4 months, if required, then MVP can be built within one month. The final version requires more programming efforts, so it takes time. Once development work is finished, and after approval by QA, the app will be delivered to you on time.
2. How You Can Help Me With My Loan Lending Application Idea?
To date, we have delivered several apps to international clients who are from diverse industry backgrounds. In addition, we have also developed mobile apps for the Fintech businesses, which are working fine. Our development team consists of experienced and talented app development experts, backend developers, full-stack developers, UX/UI designers, and quality analysts, and they ensure quality development work. Moreover, we always believe in scalability and flexibility that makes applications fine developed by us.
3. Which Option Is Great For Me, a Native App Or a Hybrid App?
The point is we can help you with both options. Here you need to specify the requirements; suppose if you want to target the native app users, you can hire our Android and iOS app development team, or if you want to target a larger audience, then cross-platform app development will be fine for you.
4. What If I Need An App And An Online Loan Lending Website?
Yes, it is such a great thing to have a loan app and website. Both will be work fine for your business so the users can access your lending services at their convenience. For example, you can use a website for informational purposes and an app for operational purposes.