In recent years, people have started seeing personal loans as a way out to get rid of debts at a lower rate. Besides, these loans have become the primary choice to fund startups. 

As the demand for loans kept growing and the supply became limited, lenders were forced to make it difficult for people to qualify for a loan. And right when the coronavirus outbreak knocked the world in 2020, some money lenders had to stop offering loans altogether.

To make up for such financial disasters, peer-to-peer loan lending solutions like LendingClub emerged. The best part? Experts estimate that the peer-to-peer lending market is projected to reach US$ 705.81 billion by 2030.

So, it’s the best time for you to launch a P2P lending app like LendingClub.

What members do you need in the team to build a P2P lending app like LendingClub?

Ideally, the engineering staff must be led by a Project Manager. A QA engineer must be assigned for Product Quality. The rest are grouped under several development teams:

1. RD and Doc Team

Business Analyst

2. DevOps Team:

Architect

DevOps

3. Design Team:

Web Designer

4. Node.js Team:

Node.js Lead

Node.js Developer

5. React Team:

React Lead

React Developer

Note that every project involves various approaches while implementing suitable features. 

Basic Requirements for Launching a P2P Lending App

Once you’ve made arrangements for technology and equipment, you need to arrive at the right amount of capital you have to invest.

This capital requirement however depends on your P2P lending business goals. While someone in the same financial capacity as you might start off with lower capital, you may need more if you want to specialize in additional areas. 

Make sure you’ve met these requirements before you launch your P2P lending app like LendingClub:

• Insurance policy
• Incorporation
• Business license
• Equipping the office with computers, phones, printers and furniture
• Leasing a facility for at least a year
• Launching a website / Loan app
• Marketing budget
• Acquiring software
• Additional expenditure like business cards and signage.

What features must be incorporated in the app’s frontend and backend?

The frontend development of the P2P lending app like LendingClub involves the following features:

If you take the average rates of $50 to $120 per hour, the front end development cost of a P2P lending app like LendingClub will be from $13,400 to $32,160.

Other important aspects of the P2P lending mobile app development process will be infrastructure, project documentation, & backend development.

Here’s an overall estimate:

How much does it cost to create a P2P lending app like LendingClub?

The cost to develop such an app depends on location:

• Asia: $10 to $50/hour
• Australia: $40 to $170/hour
• Northern America: $25 to $50/hour
• Eastern Europe: $20 to $100/hour
• Southern America: $15 to $75/hour
• Western Europe: $50 to $200/hour

After considering all requirements and involving the best P2P Lending app developers, the total cost will come to around $20,000 to $30,000.

Source: Space-O Technologies

Which development model to choose for the money lending app?

To achieve cost efficiency in your P2P lending project, it is vital that you choose the right development model. 

Here are the two types of models and their explanations:

Native vs Cross-Platform: What to Choose?

We suggest that you build a native loan app. It’ll give you exceptional performance & security & will work seamlessly. Simply put, it will give a feel that your app is inbuilt in your mobile.

Things to Keep in Mind Before Launching a P2P Lending App

Though being ambitious has its benefits, sometimes it propels an entrepreneur to jump the gun.

Be Prepared to Lose Some

Most lenders jump on the P2P bandwagon with expectations of high returns. But they forget that high returns always come with risk. So, the money you invest in P2P must be investible surplus, whose loss you can absorb. 

Also, you must plan for a few defaults once in a while if you want to reach high returns.

Value Transparency

If you are targeting high returns from your P2P lending portfolio, you cannot afford to lose big by investing money on an unreliable platform.

Check that the platform has a registration certificate, undertakes sound financial practices through an escrow account, undertakes transparent data management & provides research analytics to help make informed decisions.

Also check whether this data is updated regularly. Further, to build a diversified portfolio, make sure that the platform provides a wide choice of borrowers to invest in.

Only then you will be able to invest small amounts in a large number of borrowers.

Carry Out Marketing & PR 

Before launching your site, conduct a marketing campaign, offering first users (borrowers & investors) discounts, lower (or higher for investors) interest rates, better conditions for granting a loan, etc.

Things to Keep in Mind After Launching a P2P Lending App

Beware of Scammers

Look out for scammers who want to get a loan and then disappear. The chances are that you’ll get a lot of such people at the start. This is because there is a higher chance of finding loopholes in the risk assessment or user identification algorithm.

Further, hackers who can launch phishing resources will try to hack a website or launch a DDoS attack.

Start a Technical Support Service

Despite all precautions, testing & debugging, you will find errors and bugs on your platform. These are the kind of problems that cannot be spotted by full-time specialists but by users.

So, quickly start a support service that works with the maximum load in the first few months itself.

It will help you:

• Catch & destroy most of the errors & bugs.
• Identify all the features that you didn’t incorporate when development started. You can promptly add those missing features, instructions, or elements.
• Finally, through user feedback, learn what needs to be improved. Eventually, make the platform more convenient and understandable.

Source: Allied Market Research

What is the future of P2P lending?

P2P lending is among the most fast-developing industries—it is estimated to reach $558.9 billion by 2027. Primarily, two factors have driven their growing demand:

• Technological advancements of the post-industrial era
• Gap between market demand for loans & banks’ limited capabilities to serve all user categories. 

The small business lending segment is predicted to play a significant part in development of peer-to-peer lending in years to come. This is largely due to the growing number of small businesses in the Asia Pacific region, and their need to attract funds in order to thrive and develop.

With peer-to-peer lending offering higher flexibility, lower rates, & wider investment opportunities, the market for P2P lending apps for small & medium businesses is set for continuous growth.

Final Note

Nevertheless, building lending apps involves taking care of many nuances & complexities. And when you are new to fintech software development, ensuring seamless user verification, usability, security, and compliance is all the more a challenge.

The team at Code Brew Labs has over a decade of experience developing robust P2P Lending apps. We guide you through all the stages of P2P software development and help you build a feature-backed P2P lending app.

Talk to us for a demo.