When it comes down to borrowing money, you can get it from any bank. It can lend you a large amount of money at a specific interest or even provide you with a credit card for your daily usage. Anyhow, a lot of people utilize these services, and often it can be quite convenient. However, a few years ago, you were required to go to the bank, stand in a queue, fill out multiple forms, provide financial documentation etc. In other words, it was a total wastage of time. It wasn’t actually convenient, but then people have no choice whatsoever. However, now there are multiple alternatives for the people who wish to loan some money.
Money lending apps now make it possible to lend money quite simply by just sitting at your home. These apps are now becoming quite trending in the entire FinTech world. Money lending app development has now become a value proposition for mobile app development services. So, let’s look at what is a money lending app and then we will discuss its features and associated new ideas.
Money Lending App
Money lending is often done through P2P lending which stands for “peer-to-peer lending”. This term essentially means issuing as well as receiving loans by particular individuals directly with no involvement of conventional or traditional financial institutions like a valid intermediary. Majorly, Peer2Peer lending is essentially performed with the assistance of a special P2P lending app, also known as a money lending app where the users can easily be both borrowers and lenders. The specialists call them money lending or loan apps.
Most of the credits or loans are issued in these services are actually performed by private individuals. However, in a few cases, companies can participate as an entity in these processes as well. P2P loan rates can easily be fixed or even assigned with the assistance of a reverse auction. In the case of the reverse auction, the potential borrowers of the money assign the maximum level of rate which they wish to take a loan at along with potential creditors bargaining with each other providing funds at a much lower rate.
Intermediaries or companies which hire app developer to create peer-to-peer app get their income from fixed payments, along with borrowers or even in the form of small fixed percentage from the total sum of the loan that is taken from both the creditor and borrower.
Advantages of Money Lending App
Absence of Costly Middlemen or Intermediary
Money lending apps are quite different from a conventional bank. The first thing which stands out is that there is no bank or any existing intermediaries and the customers need not have to pay for any banking services, or visit any brand or even convince a creditor in order to receive a loan. The entire systems are entirely carried in a completely online environment with all operations duly performed through online platforms that exist at the mere expense of minimal fees for the apps or monthly fees. No deposits, no large amount of sums, and no guarantors are the chief advantages of money lending applications. Hence, it becomes easier for Android app development services to create such an app due to lower complications.
Conditions determined by both Borrower and Creditor
Both the creditor, along with the borrower, can easily choose the required conditions for the purpose of the future bargain, which is the sum, the deadline, and the interest rate. Also, the provider even monitors how the borrower abides by various accepted rules. In order to become a participant on the money lending application, a user only has to register and also fulfill a particularly special form. It would be quite better for the borrower in order to fill as many required points as possible to increase his chances to receive a loan. A special rating reflects the solvency of the user.
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Any potential borrower needs to upload scanned copies of various important documents. They are passport as well as a tax identification number. Also, a person can even submit different materials that prove his solvency such as copies of documents, videos, pictures, etc. The provider will essentially offer to raise the rating of the borrower, and the personal data will be duly tested in the credit rating bureau. It doesn’t actually cost too much, but it certainly will have a major influence on the different potential creditors, so it is among the best benefits of the money lending app.
Miniscule Interest Rate
Banks’ high-interest rate is generally caused by the higher prices of its variety of services. They need to pay a significant amount as a premise rent, along with the salaries of the employees, even fund the development of various products. All of this is absent in money lending applications. iPhone app development services should take advantage of this benefit to create user-friendly money lending app for their clients.
Process of Money Lending App Development
Now let’s discuss what steps you should follow to develop your own money lending app. The process isn’t easy and fast, but the final result is worth it. Mobile app development services should follow this process to develop their own money lending apps.
1) Comprehensive Business Registration Form
You need to select how actually to register an actual legal entity. This is why you have to select which type is much more appropriate for your own business.
1) Also, for instance, if you register a legal entity like LLC or a Limited Liability Company and may be a corporation, you will be protecting your own business against creditors in case there is any bankruptcy or force majeure that occurs.
2) In case you select a corporation form, then keep in mind that a corporation essentially means more requirements than a normal LLC like accounting or even tax reporting.
3) Also, in the case of LLC, profits, as well as losses, are duly distributed as per a said agreement, whereas in the case of a corporation, it should perform it following the ownership share of each of the participants.
2) Successfully Registering Business Name
Since it is actually a financial structure, you need to choose a necessary service and also register yourself as an entrepreneur. You need to follow all of the governmental requirements in this particular issue not to break any of the laws in case you are looking for methods or ways to how to develop and launch a money lending application. Also, you shouldn’t forget that your name of business shall be completely new in order to avoid repeated names of money lending companies that are already registered in this system.
3) Intuitive UI/UX Design
As usual, the product you make shouldn’t actually be difficult to understand Peer2Peer architecture. The simpler the money lending application is, the more people will actually feel comfortable in using it. So, you should better integrate all of the basic features and make the interface quite user-friendly and shouldn’t overload with lots of pictures and icons. It needs to contain all of the Minimum Viable Product or MVP features and maybe some of the additional ones in case your entire budget has some reserved funds. You need to think like a customer. All of the actions the app performs need to be clear, as well as simple. You can hire any of the Android app development services, which has experience in creating alluring and interactive UI/UX for Android applications.
4) Software Development
You need to develop an app to gain more trust as well as users. The next step needs to be money lending application development for Android as well as an iOS platform. You can hire any of the iPhone app development services for developing a money lending app for the iOS platform. It is much easier and more convenient due to quick access and mobility to the app.
For a start, you have to determine how exactly the app should be created. You can easily make everything from scratch in case you have a large team of mobile app developers who are skilled at different programming languages. The last, as well as the most acceptable method to develop an app, is to hire a mobile app development company. An app development company can do everything, from the creation of the app to post-release support.
These steps are quite essential, and you have to know all of them whenever you start to develop a money lending app.
Features of Money Lending App
1) User Panel Features
Users can register quite easily by themselves on the money lending application by simply providing their personal information which is questioned in the registration page of the application,
b) Submit Application for the Loan
Users can easily apply for an instant loan. In order to apply for the loan, users have to follow few steps such as selecting the actual amount of required money, EMI or Easy Monthly Instalment of the amount they are actually lending and have to pay, corresponding GST that they have to pay, along with the entire processing fee in order complete the fund transfer.
c) Interest and EMI Calculation Tool
It is essentially an inbuilt feature within the money lending application that allows the users to easily view the total amount of EMI along with the interest they will be actually paying on a sum of money.
d) Payback Period Setting
The users get the complete access to easily choose actually when to pay back the amount they have borrowed, and according to the payback period, the user decides to completely pay the EMI. The interest is duly shown as well as displayed to the users.
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This particular feature of the application shows the user the entire history as well as a corresponding summary of the entire money borrowed along with the withdrawal amount and credit limit available.
f) Online Support
It lets the users to easily contact for any type of query with the company’s support team via the app support. Hire application developer who can create an online support module to enable the users to contact the support team easily.
2) Admin Panel Features
The app admin can easily log in to the app’s dashboard for admin by using the appropriate login credentials.
b) Profile Approval
The admin examines and verifies the different user profiles along with the necessary information given by the users such as User PAN, debit or credit card details and rest of the information.
c) Manage Users
The admin can easily manage all of the users in case the admin actually found out that a particular user is indulged in violating the agreed terms and conditions of the app and can block that user account or even delete it completely. Hire app developerwho can create this feature for better management of users on the application.
d) Manage the User Earning
The admin is essentially responsible for the management of the user’s earning. The admin can easily view the complete users’ earnings, income along with any pending amount if they actually have.
e) Manage Profile
The admin is also responsible for managing the profile of the user and can choose to either add/delete or remove a particular user profile.
f) Loan Management
The admin can easily manage the types of loan which the user has actually selected as per the terms of conditions. Also, the interest rate may also vary for different types of loans.
Important ideas for Money Lending App Development
There are certain essential ideas that you should consider when developing a money lending app. The most common ones are as follows:
1) Hire a Skilled Lawyer
In the case of a few businesses, you can easily work without a lawyer. But in case of money lending business, you require a skilled lawyer who will be able to settle all of the legal issues pertaining to peer-to-peer investing and also explain to you how to act as per laws. Otherwise, you may end up breaking laws and all of your activities will end with multiple judicial proceedings.
2) Hire Financial Experts
Along with a good lawyer, you also need financial experts. They will monitor all of your policies as well as procedures in order to make them updated and also meet financial regulations. Also, such an expert needs to be highly skilled as well as have great experience in working in the money lending banking sector. He or she will assist you in decreasing the risks related with P2P lending process.
3) Preparing a Loan Agreement
It is quite important to consider the drafting of a comprehensive loan agreement whenever you are establishing a money lending business. Users will require to get acquainted with all of the terms and conditions of your application. Also, the agreement needs to comply with various governmental financial regulations. In this case, good experienced financial experts can come in handy.
4) Choose a Bank Partner
You will have to cooperate with the bank that you choose. The services of this particular bank are quite necessary for keeping the money there along with the money from borrowers and investors. In addition to this, the bank will assist you in resolving any issues with your own new loan products as the bank already have their own compliance procedure in place. But it doesn’t actually mean that you are restricted from just one bank. You can partner with several banks in order to gain additional advantages. However, this will be quite expensive.
5) Multiple integrations
Your money lending app should be prepared for the integration of the third-party solution as it is inevitable. Payment systems, banking providers, wallets, and so on. Hence, you should ask the mobile app development company which develop your app to make the app scalable for the eventual integration with various third-party APIs.
6) Encryption and Legal compliance
These two aspects are quite critical, especially if you wish to conduct your business legally as well as avoid penalties and fines. Also, you have to protect your money lending app from getting hacked by malefactors.
You should make sure that fault tolerance is ensured. Mobile application development services need to consider that money lending apps should be fault-tolerant. It essentially means that it will work seamlessly and uninterruptedly even if there is a heavy load because of a large number of simultaneous transactions and operations may occur. This is why you should hire an application developer who uses a special tool that handles fault tolerance.
Security is the prime requirement for any money lending app. Your app you should be sufficiently secured, and you have to protect it from various widespread risks like SQL injections, sensitive data exposure, broken authentication and much more. In order to encrypt the personal data of all of your users and lenders from any third party, you have to apply all of the modern encryption techniques as well as signature technologies. Also, the users should have their own encryption authorization via passwords, PIN codes and even biometric authentication.
Money lending app development has picked up pace in recent years as there is a massive demand for users looking for easy loan facilities rather than going to the bank and facing inconvenience. With the increased adoption of Android phones and iPhones and this demand for money lending apps, various Android application development services, as well as iPhone application development services, are focusing on money lending application development. We have discussed all the advantages of these apps, along with how to develop such an app. Along with this, we have mentioned the features that need to be inculcated in a good money lending app. Latest ideas and key considerations are duly mentioned above.