Essential Features for Your Peer-to-Peer Lending Application

The Advantages of P2P Lending

P2P lending apps offer numerous benefits for both borrowers and investors. For borrowers, these apps expedite the loan generation process, offer lower interest rates, assure monthly payments, have less stringent credit requirements, and provide additional flexibility on how to gain and use funds.

Investors also reap significant benefits from P2P lending apps. These platforms offer higher yields than traditional lending methods, provide an additional investing option to shares and bonds, and offer flexibility in the amount that can be invested in any portfolio.

These benefits are not just theoretical. Recent research by Allied Market Research found that the P2P lending market was valued at $67.93 billion in 2019 and is projected to grow at a CAGR of 29.7%, reaching $555.91 billion by 2027.

The Loan Acquisition Process in P2P Lending Apps

The process of obtaining a loan from a P2P lending app typically involves the following steps:

• Investor Sign Up: Investors create an account with the P2P lending app and provide details such as personal information, bank account information, investment type of interest, and borrower preferences.
• Borrower Sign Up: Borrowers register on the P2P lending app, providing personal details, financial and tax details to obtain a credit score, nominee or guarantor, and collaterals.
• Loan Request: After registration, borrowers can request a loan on the lending platform. The request may include parameters such as location, interest rate, and tenure. App filters are used to match borrowers with suitable investors.
• Investor Matching: The app matches the loan request with a suitable investor based on the preferences provided with the finance request.
• Loan Approval: Once the lending platform has matched the loan request with an investor, the next step is investor and borrower approval. The loan is disbursed after approval.
• Loan Repayment: After the loan disbursement, the borrower repays the loan as per the terms mentioned in the request. If the borrower fails to repay, the lending platform sells the collateral in the market, with financial penalties placed on the borrower.

Key Features for Your P2P Lending App

When developing a P2P lending app, it's crucial to include features that distinguish it from competitors. For instance, you could integrate an AI-powered engine to inform investors about popular loan demands or integrate several investment publications to keep your investors informed.

Some of the most crucial features for your P2P lending app include:

• Loan Origination: This is the core feature of every P2P lending app. It's a well-structured process where the borrower applies for a loan, and the lender responds to the application.
• Loan Calculator: This feature allows borrowers to calculate loan installments and interest based on the term period and interest rate.
• Credit Score: This numerical figure represents the creditworthiness of an individual based on their credit files. It's a crucial factor in determining loan eligibility.
• Loan Application Matching: Your app should have an automatic loan application matching ability to quickly find the perfect borrower-investor matches.
• Auto Investment: This advanced feature allows investors to diversify their portfolios based on predefined parameters.
• Document Scanner: This feature makes it convenient for borrowers to upload the necessary documents and files to be eligible for a loan.

Conclusion

P2P lending apps are a boon for small to mid-scale investors and borrowers, making it possible to lend or borrow at a very nominal mediator fee. However, it's crucial to find the right development partner for your P2P lending software development. The company should provide you with the best FinTech technology development services while keeping the project cost at an optimum level.