How to Create a Money Lending App?

If you've been thinking about creating a money lending app for your business, you may have noticed the success of the money-lending app industry in recent years. Mobile banking is quickly replacing traditional banking methods due to its many advantages.

This blog is recommended for entrepreneurs in the financial technology sector who want to create a money lending app and seek guidance on how to do so.

A Quick Look At The Money Lending Market

• Business Wire says that in 2021, the largest lending market was in Western Europe, and Asia Pacific was second.
• In 2021, the digital lending platform market was worth $5.8 billion, and from 2022 to 2030, it is expected to grow by 25.9%.
• By 2028, the market value of the lending industry will be $8.2 billion.
• In the US, 78% of people prefer to use banking online or through an app.
• Allied Market Research said the global mortgage lending market was worth $11,487.23 billion in 2021. It is expected to reach $27,509.24 billion by 2031, with a CAGR of 9.5% from 2022 to 2031.

What is a Money Lending Mobile App?

Users can quickly borrow or lend money at a predetermined interest rate using apps that facilitate lending and borrowing. Users can get this loan from a person or bank in their own country by comparing the interest rates and picking the best fit for their needs. It's the quickest way for lenders and borrowers to contact each other. These apps offer loans for businesses, individuals, homes, and vehicles.

What Are The Different Types Of Money Lending Apps?

Let's look at the different types of money lending apps based on the size of the credit they can give. Once you decide on a category, calculating the cost and features of a money-lending app will become much simpler.

Small Loans For Cash Advances

This type of lending money app works best for fast funding and charges minimal fees. Also, their automatic overdraft protection makes them ideal for lending short-term funds, usually under $500. Chime and MoneyLion offer this service.

Small Personal Loans

This type of money lending app usually lends under $5,000. This money loan app could work for you if you have a low credit score and need cash quickly. For instance, universal credit offers a personal loan of $1,000 to $50,000, even if you have bad credit. LendingPoint is a top platform because it disburses the loan the day after verification.

Startup Business Loans

Entrepreneurs just getting their businesses off the ground find these loans ideal, typically ranging from $5,000 and up. Lendio and Bluevine are two great examples. They connect multiple lenders with your business to provide lines of credit.

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How Do Money Lending Mobile Apps Work?

To develop a money lending app, one must understand its inner workings. Loan mobile apps provide borrowers instant loans, just like a credit card. People bypass conventional intermediaries like banks and loan brokers, and that's the only real difference. Borrowers and lenders independently negotiate terms and conditions without the involvement of any third party. You can negotiate interest rates and repayment terms.

Some of the Steps to Use Loan Lending Mobile Apps Are as Below:

• Sign up with your personal information (email, phone, name, etc.) by downloading the app.
• After that, customers can qualify for a loan, enter their banking information, and set interest rates.
• The app will perform a security check and approve the user's loan application. Then, lenders will approve the loan based on the user's credibility and credit score.
• The app receives a fee or a percentage of the loan amount, whichever is greater when it approves a user's loan application.

Why Are Money Lending Apps So Much in Demand?

As a startup hoping to impact FinTech, you must recognize the importance of developing a bespoke lending app. Before investing in the app's development, you should know its potential benefits.

• Fastest Market Growth
• Lower Interest Rates
• Hassle-Free Loan Processing
• Easily Accessible
• Highest Security
• Confidentiality
• Different Loan Alternatives
• Advanced Logs

Prerequisites to Start Money Lending App Business

Before making a mobile app, familiarize yourself with the necessary steps to start a money lending app business.

Business Registration Form

Choose a method to register a legal entity.

A corporation or limited liability company registration will shield your company from creditors in the event of a natural disaster or bankruptcy.

Create a Business Profile

Sign up as an entrepreneur and pick a required service. Follow the law and choose a unique name for your company. Registering your company with uspto.gov is necessary to do business in the United States.

Secure Initial Capital

We outlined three ways for you to secure initial capital.

Venture Capital: If you want venture capitalists to invest in your company, pitch them a business plan. This method of fundraising benefits not only startups but also FinTech companies.

Loan: Obtain a loan from a financial institution or business and repay the principal and interest.

Now, follow the detailed instructions to create your money lending app using the knowledge you have gained to launch your business.

How to Create a Money Lending App

Here is the process of money lending app development you need to follow.

Step 1: Conduct An Initial Study

In the first stage of developing a money lending app, gathering relevant data, such as app conceptualization, market study & analysis, is essential. Discover what you require to complete your application, identify what will assist you in attracting a large customer base, analyze your competition using the SWOT method, and so on. Gaining more knowledge will provide an advantage over current and future rivals.

Include major requirements and goals, functional requirements, must-have features, legal requirements, estimated cost to develop a money lending app, necessary app platforms, and future possibilities in the current phase. Throughout the development process, the fintech software development company you choose can use this document as a reference point to ensure that they meet your needs.

Step 2: Register the Business Name and Do the Legal Work

After conducting preliminary market research, you should register your business name as the first step toward doing business legally. You need to choose a method of legal entity registration that suits your needs and comply with all applicable regulations before you can legally open for business. Coming up with a unique name for your company is a good idea to avoid confusion with similar brands.

Step 3: Acquire Initial Investment

Developing a single solution for the fintech industry requires a significant financial investment. A business needs capital before it can start courting investors. New businesses needing initial funding can consider venture capital, Initial Coin Offerings, and loans. You will also incur a cost for keeping your P2P lending loan amount in the bank.

Step 4: Find A Development Team

Selecting the appropriate fintech development company is required to develop a high-performing and feature-rich solution. Invest in full-time developers and find a reliable business partner. You will communicate with these people throughout creating a loan lending app.

You need to ensure that your IT financial service partner is well-versed in the platform you're using, which will help you win half the battle of finding a trustworthy partner. Make an informed decision by checking out their previous work (portfolio), speaking with a client, and learning about their methodology and experience.

Step 5: Prioritize Features

Incorporating safety and convenience features is crucial when designing a loan-granting app. Essential features include real-time loan processing, an intuitive user interface, bank account linking, loan tracking, an AI chatbot, and many others.

Step 6: Create a Design

You must choose a compelling UI/UX to make people use your money-lending app. Designing a lending app's user interface heavily relies on a mobile app's wireframe and prototype stages. Ensure that your final product engages users and is easy to understand rather than being a chore.

Many mobile app development firms contract with specialists or expert app designers to ensure they satisfy their clients with the final product. If you have the resources, include basic and advanced features in your mobile app's design.

Step 7: Develop The App

Developing a top-notch money app through mobile app development is more challenging than it sounds. Carrying out the procedure requires an expert team. First, they need to settle on a strategy for building the app from the ground up and choose a set of tools and languages for mobile app development.

Step 8: Test And Launch

The Mobile app's testing phase is crucial. The platform selects apps only after testing their source code. We must thoroughly test the app before releasing it, covering many criteria, including performance, speed, functionality, security, and more.

We perform manual and automated testing to ensure everything runs smoothly on the app. Ensure the app conforms to regulations such as GDPR, CCPA, etc.

After passing this test, the developers will release the app to users worldwide via the Google Play Store, the Apple App Store, or both. Companies can solicit customer opinion using such instruments as Promoter.io, SurveyMonkey, etc.

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Important Features to Add in Money Lending Apps

Hiring a mobile development company to create a loan lending app is as important as finding the right features to add to a money lending app. If you want your app to meet the needs of its target audience and stand out from the competition, you need to implement the following features into your solution, user and admin panels.

User Panel Features

The user panel must have a simple-to-use user interface (UI) to facilitate communication with the intended audience. Let's look at these key aspects together.

Registration/Login

To create an account and complete the app registration process, you should provide your user name, phone number, email, address, and other forms of identification.

Connect Bank Accounts

Users can connect multiple bank accounts on money lending apps for convenient, on-demand deposits and withdrawals.

Apply for Loans

Users can fill out loan applications after carefully considering their needs and researching appropriate lenders.

Set Payback Period

Customers can best suit their needs by customizing the duration of their loan repayment here. After that point, the lender will base the interest rate on the loan's duration and terms.

EMI & Interest Calculation

Users will select the loan payback period, calculate interest and EMIs, and make monthly payments.

Payment Schedule and Billing

Users can monitor the loan history at every stage by accessing the repayment history.

View EMIs Paid/Unpaid

Borrowers need to use their loan money app to keep track of their outstanding loan balance easily and all EMIs paid or due.

Withdraw Money

Users can withdraw money borrowed from their checking or savings accounts through these mobile loan apps.

Transfer Money to a Bank Account

You can send money to other people through apps that lend money. Users can send any amount to a different bank account.

Discounts and Offers Using Credit Card

During mobile lending on demand app development, developers must include this feature to offer users discounts and offers.

Reward Points

Borrowers and lenders can earn bonuses and other perks by trusting and continuing to use the app.

Variety Loans

Make sure the lending app offers a variety of loans, including mortgages, auto loans, business loans, and more, so that borrowers can meet their unique needs with flexible repayment plans.

Push Notifications

The function informs users of upcoming payments, loan status, and other relevant updates, aiding in timely loan and payment management.

Admin Panel Features

Make sure you hire developers who include only the best and most intuitive options in the admin panel of your money-lending app, as it is crucial for its effectiveness. Check out below-

Log in via Email ID

By registering with the app and entering their email ID, the administrators of these money lending apps can quickly and safely access the app's backend.

Two Factor Authentication

App registration requires two-factor authentication, which adds an extra layer of security against hacking and safeguards sensitive information.

Manage Profile

This function allows the administrator to view and edit all user profiles, keep tabs on loan applications, and manage the loan process.

Loan Management

The administrator can review and approve loan applications, keep tabs on payments, customize interest and repayment terms, and streamline loan accounts using the system.

Manage Rewards

Admins can improve the user experience by creating and managing reward programs that encourage loyalty and engagement, incentivize borrowers, etc.

Manage Discount and Offers

An administrator can use this function to design and supervise promotional campaigns, modify discount and offer parameters, assess campaign efficacy, and increase user participation and loyalty.

Manage Profile Approval

Administrators can review and approve user profiles to reduce the risk of theft and fraud and ensure compliance with all applicable regulations.

Manage Customer KYC Approval

Acquiring a genuine user base and avoiding money laundering and spam requires critical approval of Know-Your-Customer (KYC). Admins must review and approve KYC for the sake of future security.

Manage Customer Credit Limits & Requests

Administrators can easily raise or lower credit card limits based on a user's demonstrated creditworthiness and the frequency with which they settle their balances, giving them complete control.

Manage Users

The admin can control and monitor access to the system securely and efficiently. They can also create and manage user accounts and view their past activities.

CMS Integration

The admin can attribute, edit, and publish content that aids users in navigating the app and learning about its various features and functions by incorporating a content management system.

Bank Partner Management

The admin manages the relationship with various banks, reviews and tracks their transactions, and controls loan processing and disbursement to guarantee customers dependable and trouble-free loan services.

Advanced Features of Money Lending App

Money lending apps require more than just the standard user and admin dashboards to attract users and stand out. Here are the items.

• Online Support
• Bank Partner Management
• Integrated Cloud Storage
• Chatbot
• Loan Calculator
• Analytics
• Supports Multiple Languages and Currencies
• CMS Integration

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How Much Does It Cost to Build a Money Lending App?

Developing a money-lending app could cost anywhere from $25,000 to over $1,000,000, depending on the app's features and functionality.

Here are 3 key factors that determine the cost.

Team

Hiring freelancers is the least expensive option, and it could cost you around $30,000. On the other hand, an agency will charge you around $100,000. Hiring someone to work in-house costs a lot, but the amount varies greatly depending on your location. Businesses vary widely in the cost of outsourcing a team, but the average is under $80,000.

But we always recommend hiring a full-time mobile app development company. They have experts to serve your business needs.

Region

Creating a money lending app is more expensive in the United States and EU countries. Eastern Europe, South Asia, and Australia go remarkably lower.

App Complexity

Each additional requirement and added feature increases the price as there’s more manpower and time involved.

Click here to know how much does it cost to build a mobile banking app.

Conclusion

Now, you know how to create and execute a loan application. Technical expertise and the ability to work with others are necessary for any long-term endeavor. Hyperlocal Cloud's development team released over 150 unique products over the years. Contact our experts today to get your project started!