Previously, people used to struggle a lot to get a personal loan from a bank and needed to complete multiple documentation formalities. The process was undoubtedly very hectic and time-consuming, but not anymore. With the advent of P2P lending apps, it has become easier for people to get personal loans with low-interest rates.
The demand for P2P loan apps increased after the COVID-19 outbreak, where 114 million lost jobs. In such a scenario, people started looking for different ways to borrow money; hence, the demand for money-lending app development increased tremendously.
A peer-peer loan lending app idea lets people lend money without the involvement of a credit union or traditional bank. Research predicts that the valuation of the P2P industry will reach $150 billion by 2025.
What is A P2P Lending App?
A Peer to Peer lending app is a money lending method where the borrowers and the money lenders are equal parties, including the individuals and the companies.
There is no third-party or intermediary involvement during the loan lending process. As there is zero involvement of third-party, the interest rate is low compared to the other traditional methods of loan lending.
The entire process of getting a loan at a low-interest rate is performed via the best P2P lending apps, where you can be a money lender or a borrower. Also, the best part of using a P2P loan lending app is you need not go through any other maintenance, including renting premises, staff fees, computers, software, etc.
Simply get in touch with a leading loan lending app development company, and get a result-driven micro-lending app in hand.
How Does A P2P Lending App Work?
The process of the peer-to-peer lending app works differently for two panels, i.e., the borrower and the lender. So, whether you are a borrower looking forward to getting money or a lender, knowing the loan lending work process is a must. Let’s begin!
1. For Borrowers
- Sign-up – First, register yourself on the loan lending app by filling in all the information, including your bank details and more.
- Profile Verification – Once you finish the sign-up process for the P2P apps. The information is updated to the lenders where they know the risks & rewards of lending to your business.
- Loan Market – Next, your loan will go live as soon as your business is approved. Here, the lenders will start bidding on your loan.
- Loan Acceptance – When you get 100% funds, accept the terms and conditions of the loan. The money lending app will charge a minimal fee for loan amount transactions.
- Repayment – The loan repayment date will be displayed to you with a fixed amount to pay every month.
2. For Lenders
- Sign-up – Similar to the money borrowers, sign-up as a money lender on the P2P loan apps to get started.
- Account Selection – There are different accounts available for money lenders, such as growth, income, self-select, etc. So, choose a suitable account for your P2P loan lending app.
- Adding Funds – Next, add funds to your P2P lending app, depending on the type of account chosen and the payment methods available.
- Lending Money – Start bidding for the loans that are live on the money lending applications.
- Repayment –Receive monthly repayments of capital and interest from the amount lent. You can further lend this money to other businesses & earn more profit.
How to Develop A P2P Lending App? Step-by-Step Process
Planning to create a peer-to-peer lending app for your business? Here is a step-by-step lending app development process you can follow to develop a successful business application. So, let’s dig deeper into the steps one by one.
Step 1 – Market Research & Analysis
Like any other mobile app development process, market research and competitor analysis are crucial during money lending app development. Access the ongoing market scenario to know the ongoing trends in the finance sector and research the popular P2P payments or lending apps. It will help you know the features, loopholes, and more.
While researching the market and competitors, write down the information you may find handy during on-demand lending app development.
Step 2 – Ensure the Legalities & Safety Compliances
Security is one of the major factors while creating a money lending app, as the users will not use your business app if it does not follow the security compliances. So, to make your P2P lending app safe, make sure to implement the following things –
- Encryption – Strong encryption to ensure your application contains secure server connections that are well-equipped with data-breaching tools.
- Authentication – Identity verification and 2-factor authentication to increase the security of the peer-to-peer loan lending apps.
- Legal Compliance – An App should be legally compliant with the latest rules and regulations to ensure the safety of sensitive data and information.
Step 3 – Choose A Suitable Business Model
Every mobile application development process requires immense effort & time and the P2P lending app is no different. So, choosing a suitable business model holds crucial importance if you want to make your business application rewarding and profit-driven.
Follow the best business models like advertising, subscriptions, and commission-based model to ensure constant income from your peer-to-peer lending app.
So, while availing of mobile app development services, ask the professionals to choose the best business model adhering to your business needs and demands. It will greatly impact your application’s success in the long term.
Step 4 – Decide the P2P Lending App Features
Features are very crucial components of applications and websites. They can either make or break your business’s success. Yes, you read it right!
So, make sure to insert the right set of features into your P2P lending app while considering the budget. If you have enough budget for P2P money lending app development, insert the advanced lending app features to make your application unique. It will add more worth to your business application.
Step 5 – Focus on UI UX Designing
Application with an appealing design can grab the users’ attention at first glance. The users will prefer your P2P lending app if it has an attractive design. But make sure not to make your business application design too complicated.
If you are seeking a leading organization’s mobile and web app development services, check whether they have a creative designers and developers team.
Besides this, also keep an eye on the latest tech stacks. Modern technologies you will insert into your P2P lending app will ensure its success in the coming time while keeping your application updated as per the latest trends.
Step 6 – Create An MVP
Creating a minimum viable product or MVP is the best way to get an idea of how your P2P app will look like. This process will save you time and effort to create a peer-to-peer lending app while helping you eliminate errors and bugs before the final launch. It is also a reasonable way to reduce the P2P lending app development cost and keep your budget on track.
It is applicable whether you are availing of android app development services, iPhone app development services, or any other. So first, create an MVP, then go for the final application development.
Step 7 – Develop & Test Your App
Finally, when you complete all the steps mentioned above, develop a P2P lending app by following all the steps mentioned above. When the P2P lending app is created successfully, test your application using the latest tools to make it 100% error-free. None of the users will use an application full of bugs and errors, so don’t overlook this crucial P2P lending app development step.
This is it! So, this is a seven-step process to develop a peer-to-peer loan lending app that isn’t only successful and revenue-generating. Now that you are well-versed in the development process, it is time to implement it in real time. But before you begin, look at the lending app’s features as well.
Essential Features of A Peer to Peer Lending App
1. Document Management
Lenders have a central location to manage all of their leads’ documentation. Additionally, it should be easy and simple for the borrowers to save all their documents and edit them in one location. So, this document management feature of a P2P lending app is undoubtedly useful for lenders and borrowers.
2. EMI Calculator
By entering the loan amount, tenure, and interest into a loan calculator, borrowers can quickly determine their monthly payments and the total amount due. It will also make it easier for the money lenders to understand the repayments.
3. Lead Management
Lenders will handle leads who have borrowed money. They may generate leads, follow them, and acquire information on tenured, upcoming payments, balances, and more.
4. AML & KYC Verification
KYC provides the admin with comprehensive information about the user through official identifications. On the other hand, Anti-money laundering (AML) verification stops the practice of earning money through unlawful activities. It is a crucial feature to include when creating a mobile app.
5. Credit Score Calculation
The amount of debt you have, your credit history duration, the types of accounts, and other factors are all determined by a credit score calculator. So, when you hire mobile app developers to create a P2P lending app, ask them to insert this amazing feature.
6. Scheduling Payment
Both lenders and borrowers will benefit from the repayment scheduler’s assistance feature of a P2P lending app. It will help both parties to receive alerts of future installments and save the borrowers from any penalty.
7. In-app Camera, Call & Chat
Coming to one of the crucial features of any mobile application, i.e., camera, in-app calling, and chat. A well-developed peer-to-peer loan lending application is nothing without this feature. So, don’t forget to add this feature during loan lending app development.
Including these features of the P2P lending app will make your business application worthy and generate better revenue by keeping the clients engaged with your business application.
Now, you have all the information required to create a successful loan lending app, so let’s begin the process.
What is The Cost of Create A P2P Lending App?
The average cost to develop a P2P lending app ranges from $20,000 to $50,000, depending on the type of mobile application developed. Still, there are ample factors affecting the peer-to-peer lending app development cost, and one of the major factors in the region.
Here is the region-wise cost/hour in a tabular format to help you make the right choice as per your budget.
|Northern America|| |
$25 to $50/hour
|$15 to $75/hour|
$10 to $50/hour
|$40 to $170/hour|
$20 to $100/hour
|Western Europe|| |
$50 to $200/hour
Nevertheless, creating a successful P2P lending app requires time, effort, and expertise. P2P money lending platforms offer businesses an amazing opportunity to earn huge profits in the finance sector.
We hope this blog is pretty helpful for you to know, ‘How to create a P2P loan lending app?’ including its features and app development cost. Now that you have an idea of everything begin the process right away.
In case you do not have the desired team, it is advisable to hire a loan lending app development company where experienced professionals work. Share all your requirements with the mobile app developers, and they can craft a masterpiece adhering to your business requirements.
Frequently Asked Questions
What Is the Average Cost to Develop A P2P Lending App?
The basic cost for P2P lending app development begins from $20,000 and may last up to $50,000 and more, depending on the type of mobile app developed. So, to get an exact cost estimation, clarify your app requirements and then prepare an app accordingly.
Why Should Businesses Invest In P2P Lending Platforms?
- Access to lower rates
- Secure transactions & high ROI
- Better flexibility
- A faster and convenient method of loan lending
What Are the Top 5 P2P Lending Apps?
Nowadays, there are ample P2P lending platforms available. Some of the top P2P lending apps that are gaining huge popularity these days are –
- The Money Club