How to Build a P2P Money Lending App For The Year 2022
by Smitesh Singh, on Feb 7, 2022 12:57:49 PM
With the world in the post-pandemic turmoil, economies across the globe are taking a hit. Many investment projects took a toll. However, digitalization helped people lend and borrow on a micro-scale in a safe and secure way. We’re not just talking about institutional investors, many individuals can also lend money to people or businesses in need. This is called P2P lending. Peer-to-peer loan apps connect people who can lend money with the people who want to borrow money. In this blog, we will see how these apps work and what features can they have:
How do loan mobile apps work?
Let us first begin by understanding how money lending apps work. The mechanics isn't rocket science. All users have to do is:
- Download the app from the app store.
- Sign up for a new account or sign in to an existing one.
- Type the sum needed or the amount available for investment.
- Choose a suitable interest rate.
- Link the bank accounts with the app account.
This pretty much does it. Fintech apps have the feature to notify users prior to deducting the payments or accruing funds into the lender's account to avoid paying a late fee, overpayments, etc.
P2P money lending mobile apps - Benefits
Payments or lending apps usually bypass any intermediaries like brokers, banks, and other actors, hence avoiding any hassle linked with them. The Lender and the borrower are both the only owners of the business association and have to negotiate terms of repayments with each other directly.
The borrower applies for a loan and the app performs an automated background check on the legitimacy of the loan with documents submitted. Lenders can take a look at the applications and approve the ones they like. The app owner can also receive a percentage of profit with every loan application executed, or can charge a subscription payment. The absence of mediators like banks further ensures suitable interest rates for both parties.
Money lending mobile app features
An app, be it for any utility, needs to be easy-to-use, user-friendly, and have sleek UI, transparent interactions, and speedy use. It should offer a smooth journey for both users as well as admins, lenders, or borrowers.
Basic money lending app features
Let’s take a look at the must-have features of fintech apps.
- Sign Up/login: An app user must be able to sign up and login into their app account with a phone number, email, or social account like Gmail or Facebook. Users must enter their contact info to be verified by the platform.
- Loan handling: Users must also be able to check the loans, their calculated Monthly Installments or EMIs, the GST or Goods and Services Tax value, the platform fee, etc. The borrowers must be able to build and file their loan applications, choose a suitable payback period, and interact with lenders on all the aspects of the loaning process.
- Payments: A loan app must have a history of payments made to offer transparency through the process.
- Transactions and EMIs: To repay the loan, the borrower should consistently pay EMIs which include interest as well as principal. Once the EMIs are completed and the loan amount is paid in full, the transactions are saved for auditing and other references.
- Transfers and withdrawals: The lending app must offer options to send funds to the bank account or to the user’s respective banking card.
Additional peer-to-peer lending app features
- Chatbots, loan management, reporting, admin activities, and many more features are important for a seamless and quick money lending association for parties involved.
- Reward points and ratings. The Borrower and the lender account can be credited with reward points for on-time fulfilling of their obligations, hence rating them for new users to benchmark.
- Customized reporting. The lending app should provide reports related to all parties and these reports must include information like the number of active loans for a user, number of EMIs paid, the ones remaning, etc.
- Chatbots. Chatbots can teach users to master the app within no time and get used to its navigation via its functions.
- AI-backed analytics. Admins, as well as, users can gain from real-time analytics. Lenders can evaluate the KYC details of potential borrowers and assess their credit history. Admins can get comprehensive analysis on different aspects of app operations, with technologies like big data and AI to gain actionable insights and improve UX.
The more high-end features are implemented in an app, the better one can stand out amongst competitors. Filtering features that are must-haves and others that enhance UX is critical for a successful MVP launch for a loan app that will drive profit. Whether you require a full-fledged peer-to-peer money lending app developed or simply wish to extend your team, get in touch with a p2p lending app development company.