The current global economic scenario is in a state of turmoil, especially as we go through this pandemic. Investments projects were cut down in bulk, but we can still avail of funds for investing. In fact, today, we can easily borrow money from any bank and avail credit cards for daily usage. A decade earlier, people had to stand in queues outside banks and meet with their managers and waste a lot of time. There was no convenience and no choice on their part. But the digital era has ushered a ray of hope upon us by virtue of app development.
Online P2P lending through websites and mobile apps is on the rise, and an increasing number of people are availing it. It provides them with the comfort of sitting at their home and arrange for investments and leans through mobile apps. Let’s learn a bit more about loan lending apps before we delve into the nuances of loan lending app development.
What are loan lending apps?
A loan lending mobile app provides you access to loans from banks at their interest rates. It facilitates easy money lending from banks, institutions, and individuals in your country. You can compare rates of interest and pick out the loan that suits your purpose best. The app works almost like a credit card allowing instant loans to its users. All you need to do is install the apps on your smartphone and register on it. The app will verify your eligibility for loans as you upload persona and bank details. Then it will provide you with a list of loans that you are eligible for. You can check their credibility online through these apps. It saves you time from all those bank trips and meetings. All you need is to access the mobile app.
Most of the issued loans in p2p lending are provided by individuals except a few where companies participate as entities. Loan rates in P2P lending can be both fixed and manipulated using a reverse auction. In the latter cases, borrowers assign the maximum level they want to acquire the loan at. Potential creditors bargain among themselves to offer funds at the minimum rate.
How to begin with money lending app development?
If you have decided to get into money lending app development, then it’s best to get started right away. It can be complicated at times, but with the proper guidance, you’ll be able to get a grasp of it.
1. Select a legal entity form
You will have to start the app development process by selecting a legal entity form. A legal entity form protects you from creditors in cases of bankruptcy and force majeure. The most common entity forms are corporation and LLC (Limited Liability Company). Although they differ in taxation methods, they will serve you in a similar fashion. As per the norm, a corporation will be considered a legal entity capable of generating income and is taxed accordingly. LLC, on the other hand, is considered and taxed as a pass-through entity. This implies that all losses and profits are calculated on the tax returns of its individual owners. The profits are accrued on the basis of the agreement in the case of an LLC. Corporation payments occur based on the number of shares owned by individual owners.
2. Acquire initial working capital
Once you have acquired a legal entity form, you can go ahead and register your business and secure a healthy starting capital. This capital will come in handy for both the initial loans and the app development. Like any startup, you will also require a hefty amount of money to invest in application development. Also, when borrowers ask for loans, you will need to provide them with the same to attract investors. Finally, you will also require working capital to cooperate with banks where you’ll keep the P2P lending money at. Now there are a few effective methods of raising initial funds. We have provided the most common below.
- Venture capital – You would need to create a business plan to attract venture capitalists in the beginning. Pitch the business plan to your potential investors and ask them to invest money in your loan lending app. If they are impressed with the prospects and invest in your project, they will own shares in your application development business. Otherwise, you can also make repayments against an agreed interest rate.
- Loans- It might seem ironic, but you might have to take a loan to initiate work on loan lending application development. But provided your app becomes a successful venture, you will be able to repay it back in no time.
- ICO – The term ICO stands for Initial Coin Offering and has gained a lot of popularity in recent years. You can sell cryptocurrency units to your investors in exchange for their investments.
3. Design the User Interface and experience
The mobile app you develop must be simplistic in its approach. It cannot afford a complex P2P architecture. The simpler its user experience is, the more comfortable your users will be, and they would recommend it to others. However, you will need to integrate all the basic features into it, all the while making it user-friendly. Do not overload the interface with images and icons and make it clumsy. The UI must contain all the MVP features and additional ones if required. Also, you would have to keep one eye on your budget and endure you do not overshoot it largely. The trick is to think from the perspective of a customer. The app must be able to provide all necessary actions in the clearest manner. The UI and UX design are significant aspects that determine the success of your money lending app.
4. Perform the software development
Finally, we come to the core of app development, software development. You might want to start with a website in the beginning to garner faith from users. Once you have that proceed with the loan lending app development across Android and iOS platforms. This provides easy access and quicker mobility to your app. Determine beforehand how you want to develop the app. If you can hire an efficient team of programmers, you can opt to build it all from scratch. Otherwise, you can order app development from mobile app development companies. They will handle all aspects from app development to its post-delivery support.
Now that you understand how a money lending app functions and how to create your own app, get your hands dirty and develop it. The process would never be an easy one, and you’ll run into roadblocks more often than not. But if you don’t venture, you’ll never gain. Consult the best mobile app development company if required and get on with your money lending application development.