A Complete Guide to Develop Successful Money Lending App

Money lending services are gaining prominence today, especially with institutional lending taking a hit after the covid. One of the things provided by money lending applications is access to quick credit. As these are based on P2P lending, the users can get loans quickly at flexible repayment plans.

Building an application to let people borrow money from an institution or individual lenders must be done with due process. Due to the legal, financial, and regulatory aspects involved, you need effective planning. It is essential to take the due licenses and complete compliances before starting with the development part.

While you need to take care of the regulatory requirements, we will talk about the process involved with mobile lending app development.

Must Read: Mobile App Development Process: Easy Step to Build your First App

An Overview of Things Required Before Building the Application

Before building the application, register as a legal entity with your country’s authorities. You can choose from a Limited Liability Company (LLC) or a Corporation. Both types of company structures protect the customers when it comes to filing for bankruptcy or force majeure.

Then register the business name. Choose a name that personifies your purpose in building the application. Plus, the business name should be easy to remember. Every country has different regulatory requirements for registering the company name; make sure to follow them as well.

The last thing you need to do is secure the initial capital. This is required to gain the trust of your investors and customers. With the initial capital, you can start giving out loans, and this will garner trust in the investor community. As they will notice that people are already taking loans from your application, they will invest more enthusiastically.

Let’s move to the development process now.

Steps to Create Money Lending App

Building any form of application means you need to delve into the nuances of planning, designing, strategy, development, and testing. Here’s how it should go down. 

• Planning the Application (Discovery and Idea Validation)

  Before building the application, test whether there is a need for the solution, you are providing in the market. To get the answer, start with the discovery part. Conduct thorough market research, check the existing applications in the market giving the same service, and identify the key issues customers are facing at present.

  Moreover, find out the reasons why some applications are performing better than others. Analyze the features and functions of the existing applications and study your customer.

  The purpose is to identify the unique selling proposition. This is required to kick off your service in the market and start attracting customers. To make your idea even better than the competitors, analyze the customer feedback via the comments.

  Plus, gather insights from the target audience via surveys, questionnaires, polls, and focus group discussions.

  For idea validation, build a landing page and add the key features you will be providing with your application. If not for a landing page, you can also get the data from surveys and polls. Check the user’s response and validate your idea accordingly.

  With this done, you can successfully create an application plan and decide the
  USP, key features, and integrations. For this, you may need to involve business analysts, project managers, and a developer team lead.

• Choose the Tech Stack and Team

  The second thing you need to finalize is the tech stack, which is very important. Every development technology, be it a programming language, framework, library, database, etc., is built for a specific purpose.

  Your team should be able to identify their key differences and suggest the perfect tech stack for the development of a money lending app. The right choice makes a big difference in how your application is built, launched, and performs.

  Plus, you must focus on choosing a tech stack that makes scaling the application easier. Work with a security-enhancing tech stack, as you are building a fintech application and have to ask users for confidential information. Hence data protection is crucial to ensuring the application’s success.

  For the team composition, we have already mentioned that you need a business analyst, project manager, and tech team leads. In addition to them, you also need UI/UX designers, and developers (iOS, Android, cross-platform).

• Create the Application Design

  Your application must not only look attractive, but it should be easy to use. Taking this as the main requirement, build the application design in a way that your users won’t have to put in the effort to find a feature.

  Everything in the application must be designed and presented for the user’s benefit. Add creative designs, styles, animations, etc., for best results. The interface should be simple, approachable, and user-friendly.

  While creating the design, visualize how the user would interact with the application and create it accordingly.

• Developing the Application

  You need to build the most viable product (MVP) version first. The MVP contains all the necessary features and is launched initially. The MVP will have your entire learning from the validation process and must take the least amount of time to develop.

  The benefit of building an MVP is that it allows for launching a new product with less mistakes. As you learn the customer’s responses and approach to your product, you can add the required functions and features to improve the user experience.

  Plus, the MVP is a cost-saving procedure. In the money lending app development process, creating an MVP will help you check the product viability. It will save you from over-investing in the application and create the best version of the product.

  Secondly, with the response generated from the audience, you will clearly know what your customers are liking and what they dislike about your application. You can save time by not working or adding the features which your customers do not prefer.

• Testing the Application

  With the MVP ready to be launched, test it thoroughly to find performance, security, and other issues. Since you are building a product in the fintech industry, take special care of the security aspect.

  Hence, run the application through various tests that ensure better performance. The main types of tests you need to run include;

  • Automation test
  • Security test
  • Data integration test
  • Functionality test
  • Performance test
  • Unit test

  After the testing is complete and you have addressed the issues, launch the application on the intended platform.

Main Features of Money Lending App

Going ahead with the money lending app development guide, we will discuss the features you can add in the money lending application. Here are the main features that must be added in the application. 

• Registration and Login: Let’s start with the most basic feature. You need to add a feature allowing users to create their accounts. Now there can be two types of users here; the lenders and the borrowers. Besides registering the account, allow them to add financial and personal details. To improve the user experience, go for a one-click sign-up with Gmail or Facebook.
• Taking Loans: The users should be able to take loans according to their profile and requirements. You can create an immersive way to let users take the loan. Like setting a horizontal scroll bar for setting the amount, selecting the tenure, etc. With this, you can also help them by calculating the payments to be made, including the principal amount and the interest.
• Managing Loans: Another feature is loan management, where the users can view their existing loans, pay EMIs, foreclosure, check the processing fees, see the loan track, etc. This is going to give them complete information about their dues and current position.
• Payments and History: One of the features would be to set up an automated EMI deduction system from the user’s provided bank account. Besides this, you must also allow the users to pay their EMIs from the application via their preferred method. Hence, make sure to integrate different payment methods in the app. Plus, allow the users to access their payment history and schedule.
• Online Loan Processing: Since you are rooting for a quick and seamless loan-taking process, allow the users to upload their documents via the application. This is in addition to the fact that they are able to complete the verification process without walking into the bank.
• Notifications: The users should get in-app notifications about their loan processing, approval, rejection, etc. Plus, you need to set a system whereby they are reminded of the pending installments and other offers available for them.
• Credit Score Analysis: Any bank would first check the person’s credit score before they would hand out loans. As an application providing this service, you also need to ensure that your borrowers have good credibility. For this, include a system to check and verify their credit score.

With these basic features added into the application, you can launch it and monitor the performance and customer feedback. With time, when the application starts getting attention and customers, add additional advanced features. This includes a chatbot, loyalty program, reward points, geolocation, and loan restructuring.

Completing the Security Aspects of Money Lending App Development

You must understand the sensitivity of the services you are planning to provide via your application. A money lending application needs to gather information about the user’s bank accounts, credit history, house address, contact number, and other confidential information.

Any person would not want to risk sharing this information with another entity without having to know their security protocols. Plus, when you build an app with higher security, you can use it as a key aspect to market and promote your solution.

Here you must adhere to the legal and regulatory compliances that protect the user’s data from being shared without authorization with third-party entities.

From a security angle, use high-level encryption to transmit the user’s documents through the application securely. Moreover, you need to set an OAuth2 authentication mechanism to ensure secured access to the application. The connection to the band and lending solutions must be secured with the relevant encryption.

For these purposes, it is best to bring a cybersecurity expert on the team who can help you with identifying the security system.

What’s the Cost to Develop Money Lending App?

You can expect to spend between $25,000 to $90,000 to build a money lending application. But the cost highly depends on the type and location of the mobile app development company you are choosing. Or, if you are hiring in-house developers for the purpose, then the cost might also differ.

Another price-determining aspect is the complexity of the features you are adding into the application. Complex features will take more time to be developed. Hence it is going to increase the cost of development, that is, if you choose a pay-per-hour model.

According to our estimation, it can take up to 600 hours to build a money lending application. So, if you are choosing a team that charges $50 per hour, it will cost you $30,000 for the development. But if the per hour cost is $150, then naturally, the cost will climb up to $90,000.

So, the mobile app development cost, in this case, highly depends on the team you choose.

Conclusion

Summing it up, money lending app development requires extensive planning, strategizing, and high-performance coding to ensure the best results. Since you are entering a sensitive market and dealing with customers on a personal level, your branding and marketing should be highly customer focussed.

While adding the main features, make sure that the application is easy to use and has all the necessary design elements to have a smooth user experience. For more insightful information and a price estimate for money lending app development, you can contact us.