Transform Financial Services with Custom Loan Lending App Development

Modern consumers want accessible services at the convenience of their homes. That’s why the number of people using loan applications has increased dramatically.

Historically, money lending was a labor-intensive business burdening consumers and companies. However, since the introduction of loan apps, this process has been simplified by offering instant money lending and borrowing facilities with minimal documents and quicker approvals, which saves both time and effort.

According to a report, the global market for online lending platforms was valued at $5.58 billion in 2019 and is predicted to reach $20.31 billion before 2027, at a CAGR of 16.7% from 2020 to 2027.

In this article, we’ll talk about must-have features and factors affecting the cost of loan lending app development, along with the required technology stack and well-known examples.

What is a Loan Lending Mobile App?

Apps for loan lending can be a platform through which loan applicants and money lenders can satisfy their needs. Loans facilitated through peer-to-peer lending are growing rapidly each year. The apps allow loan seekers to borrow at any time without the need to go to the lending or bank. These apps offer loan lending and provide the perfect solution for people who can’t go to a bank to fill out an application for a loan.

Both lenders and borrowers with capital are required to utilize the application, and neither requires any infrastructure, facilities, or staff. Lending loans becomes easy with these apps. All you need is for both parties to agree on the same conditions before the loan applicants can get their cash in advance.

Loan lending app development is an excellent option to increase your profit margins, whether your business is new or a conventional brick-and-mortar bank. It lets your company connect with customers through a variety of methods. However, the absence of a lending application could cause the company to overlook crucial business opportunities that could affect the image of your business and its growth.

Reason Behind the Increased Demand for Loan Lending Applications

The most appealing feature of mobile apps is that they’re available 24/7. Money lending apps are a bank that you carry in your pocket. With the aid of loan lending apps, it’s easy, quick, and always possible to deposit funds. The apps for money lending also provide customers with a range of benefits, such as:

Maximum Security

Mobile money lending apps use a secure and encrypted network that can transmit details about customers and financial transactions. Users only need to establish a secure password for their accounts.

Different Loan Alternatives

These apps offer their customers loans, including payday and personal loans. Everyone requires a loan for different reasons, and the design of loan lending applications effectively meets this demand.

Confidentiality

Most loans are for homes or a brand new car, as certain individuals require loans for secret purposes. A mobile loan lending application development will provide you with high security and privacy in this particular scenario.

Improved Logs

The commercial banking experience includes transaction records in their totality. Additionally, automated transaction records are generated by mobile lending applications, and they’re easy to access through the application. By loan lending app development,, customers can also pay on time due to improved record management, which can be further enhanced with timely notifications and alerts to users.

Working Process of Loan Lending Applications

The lending procedure of the application is quite easy, and it works using the credit card model.

There are several aspects involved in an app for lending.

Onboarding

Once you have downloaded an app for lending to your device through the app store and opened it, you’ll be on the app’s homepage.

The initial step (app users to follow) is to register by clicking here. Then, you can create your account as a user. You must provide specific information such as name, phone number, email ID, and your Facebook and Twitter handles.

Afterwards, you can sign in using your credentials and browse the application.

Select The Loan Details

Then, you will see the screen with loan options. You can look through the various loan categories the app provides.

Choose the loan category you prefer. After that, calculate the interest rate for the amount you’d like to borrow. Then, choose the most suitable one. Finalize the term for which you will be able to repay the loan.

Verification & Validation

This process involves processes to determine your creditworthiness for a loan, your credit score, and other financial information.

Then, you’ll be taken to a screen on which you can enter details such as address, education level, employment history, and earnings details.

Connect Your Bank Account to The App

You must connect your bank account to the app to ensure the loan amount is disbursed automatically to your bank account, and the app will notify you.

Similar to the process in the event of the repayment of a loan, a predetermined amount will be taken from your account in a timely manner at the time of due.

Major Types of Loan Lending Mobile Applications

Here are some of the most challenging and lucrative mobile lending applications you could start with. There are various loan lending mobile applications that you can also choose to take credit. However, these six types of loan lending apps are guaranteed to yield the highest profits.

Personal Loan Apps

These apps cater to people who require financial aid for personal reasons, such as educational expenses, medical bills, or travel. Users can use loan applications to keep track of repayments, and manage their finances.

Business Loan Apps

Aimed at entrepreneurs and small-business owners, these on-demand apps facilitate getting loans to expand your business, working capital, and other financial needs. They typically offer specialized features like fast approval, flexible repayment options, and tools for business-oriented finance.

Auto Loan Apps

Perfect for those seeking a loan to purchase a car, Auto loan applications simplify the process of applying and approving. Users can research various loan options, calculate interest rates, and then submit the required documents for an effortless car financing experience.

Mortgage Loan Apps

Mortgage loan applications simplify the process of getting home loans for those who want to buy or refinance their house. They typically provide instruments to calculate the mortgage rate, monitor the status of applications, and handle the documentation effectively.

Peer-to-Peer (P2P) Lending Apps

P2P lending applications let borrowers connect directly to lenders on an uncentralized lending platform. Customers can make loans or invest their money and often have higher flexibility than banks, encouraging an approach to lending based on community.

Microfinance Apps

In search of people needing small-scale financial aid, Microfinance applications offer microloans that help entrepreneurs and individuals living in emerging economies. These apps typically concentrate on financial inclusion, offering access to credit to people who do not have banking connections in traditional ways.

Must-Have Features for Loan Lending Applications

Certain crucial factors should be considered if you wish to prevent your loan application from getting mixed into the other loan lending market. Although each loan application is unique, there are some common features. Let us look at some of the most unique features of loan lending applications.  

Chat assistance

Although lending applications effectively remove the requirement for direct communication with a representative, users may still require assistance. Live chat between your representatives could be a great way to deal with these situations.

Easy Loan Calculation

Your lending app must include the ability to calculate your loan. Don’t leave it up to your users to figure out their loans because they’re likely not experts in lending. Include a calculator to aid users in calculating the data related to loans.

Using the loan application, customers should be able to understand the most important information regarding their loans, such as the interest rate, monthly installment, and other important details.

Document Management

It should be easy for users to organize their documents within the app. They should be able to delete or upload documents when they want.

Customization

Custom mobile apps utilize native device features and user interface (UI) design to provide customers with the most enjoyable experience. Loan apps that are custom-designed work similarly.

Make sure not to use an unoriginal style. The best loan lending applications are well-designed and have an eye for particulars. Although it may seem like a minor thing, it can have a major effect on how customers consider your business.

Reports & Analytics

With loan lending app development, administrators can access comprehensive reports with detailed analysis to increase productivity. The total amount borrowed during the specified period and the amount recovered over that time are both available to the administrator.

Transactions Record

When a loan has been granted, customers should be able to see the outstanding balance and complete payments. They should also be able to quickly assess the amount of debt due.

Integration of Cloud Storage

The app will greatly benefit from incorporating cloud technology, as there are numerous requirements to ensure the security of users’ data. This feature is beneficial in ensuring the security and privacy of users’ data.

Convenient Payment Plans

Customers can utilize this important option to restrict their payment to the amount they took from the loan they were approved for. Thanks to this feature, they can manage the amount of their net payments.

Regular Repayments

By setting this feature up, you can automatically deduct the loan EMIs from borrowers’ accounts. Furthermore, this will stop lenders from avoiding the loan payment.

How Much Does it Cost to Build a Loan Lending Application?

It is time to review the app’s loan lending cost.

Calculating the exact cost of loan lending app development is not possible without knowing its requirements because there are so many factors involved in similar projects.

Every loan lending app development project is unique. Therefore, the price for the same is also unique.

Although the exact price cannot be determined, you can estimate that the cost of building the load lending application could be between $25,000 and $65,000. However if the application is complex, the price may go high. This is the reason why some of the companies prefer to partner with a flutter app development company to reduce application development costs.

It’s strongly recommended that you consult an app development company for more information or to find out more about the price.

In the next section, we will examine some of the most important aspects that impact the loan lending app development in depth. With that stated, let’s dive right into the matter:

Complexity Of The App

The complexity of loan-lending applications also affects the price of their development. The more complicated your application is, the more difficult it will be.

It requires a greater investment of significance and resources. Additionally, you will need to find developers with more knowledge who can create your apps on demand.

Each one entails higher costs than what was listed in the previous tab. However, if your application is vital, not too complicated, and pocket-friendly, it’s an excellent thing.

Therefore, the expenses to create an application for lending loans with different stages of sophistication are shown below.

• Simple Loan Lending App: $50,000 to $80,000
• Average Loan Lending App: $80,000 to $250,000
• Complex Loan Lending App: $350,000

Location of the Developers

The app’s location is one of the major factors influencing the price of developing the loan-lending application. When you hire the best mobile app development company in Canada, the cost will be lesser as compared to other countries such as Europe or America. 

• North America: $80,000 to $150,000
• South America: $50,000 to $100,000
• Europe: $55,000 to $95,000
• Africa: $40,000 to $60,000
• Asia: $35,000 to $75,000

Developer’s Experience

If you plan to develop an application for loan lending, you should consult with an on-demand app development company.

Therefore, their expertise could greatly influence the price of acquiring engineers. This is why a factor can impact the overall costs of a loan lending application.

• Senior Developer: $30 to $40 per hour
• Junior Developer: From $49-$65 an hour
• Middle Developer: $42 to $48 per hour

This is the cost of hiring Android developers with different degrees of expertise. We will examine the various hiring methods and the expenses related to them.

How to Develop a Loan Lending Application?

Before constructing an app to lend money to your company, you must know market trends and expectations. Then, you should list the different MVP (minimum acceptable product) attributes your app needs to meet and choose the right technology stack to build the features cost-effectively.

Because competition in FinTech is becoming more intense, it is essential to create a niche for your company and a dependable lending application.

Here are the different steps involved in creating an app that lends money.

Market Research and Planning

Begin the loan lending app development process by conducting an extensive market study. Find your audience’s preferences, our competitors, and the learning environment. Determine the distinctive attributes and value propositions that distinguish your app from the rest. Make a detailed plan describing the app’s structure, functions, and user experience.

Define Features and Functionalities

With market analysis, you can outline the key features and functions you want to incorporate into your lending application. Include registration for users, document submission approval workflows, credit scoring, and tracking loan applications. A user-friendly interface is important to improve your overall customer experience.

Choose Technology Stack

Choose a suitable tech stack to run your lending application. Think about factors like scalability, security, and compatibility with different mobile devices. Choose a framework, programming language, and databases compatible with the application’s needs. Check that your tech stack can support integrations with third-party services and APIs that allow credit scoring pay, processing, and other functions.

Secure Development and Compliance

Security should be a top priority throughout all stages of development. To safeguard user data, use encryption methods, safe storage of data, and authentication methods. Ensure you comply with the relevant regulatory requirements for financial transactions and data protection laws. Continuously update security measures to keep up with new security threats.

UI and UX Design

Design a simple and appealing UI/UX for your lending application. Design user personas, create wireframes, and conduct usability testing to improve the user interface. Be aware of forms, navigation, and visual elements that help users smoothly manage and apply for loans.

Development and Testing

Implement the development phase according to the plan. Create core features, connect APIs, and then implement your chosen technology stack. Conduct extensive testing, including functional tests, user-friendliness tests, and security testing, to find and fix any problems. Improve the responsiveness, performance, and overall security of your application for lending.

Deployment and Monitoring

Launch the app on selected platforms, like App Store or Google Play. Check the app’s performance in real-world situations and resolve any issues post-launch immediately. Leverage analytics tools to monitor user behaviour, gauge the level of engagement, and collect insights to improve future updates and improvements.

Top Loan Lending Applications in the Market

Finding yourself financially in a position to handle sudden expenses is extremely stress-inducing. What can you do when you’re in a pinch for cash until the next payday?

Check out some lending apps that could be appropriate for these scenarios.

Earnin App

The Earnin application lets users receive up to $100 per day and up to $500 per pay period. It does not charge fees or interest to get money. Instead, users can donate what they consider reasonable to help support the application. It is important to remember that Earnin uses an honor system that relies on information from users’ pay stubs and details about their jobs to verify.

MoneyLion Plus

MoneyLion Plus offers users access to a $500 credit at a cost in the range of 5.99 APR of 1 percent (Annual Percentage Rate) without credit checks required. The application offers a variety of benefits, including cashback and credit monitoring. To take advantage of these benefits, users must sign up for the MoneyLion Plus membership, which includes an investment account managed by a manager investment account.

Brigit App

With Brigit, the Brigit application, users can avail up to $250 credit with no penalties for interest or late fees. Brigit is also equipped with other features, including automatic budgeting and predictions for overdrafts, to help people manage their finances effectively. Brigit also comes with a membership program with additional benefits, such as identity theft monitoring and credit monitoring security.

Chime App

Chime is a mobile banking application that allows customers to access earnings through direct deposit. Payrolls can be accessed for up to two days prior to traditional banking alternatives. Chime provides a range of advantages, including no hidden fees, automatic savings transfers, and the possibility of using a Visa debit card for daily purchases.

Branch App

The Branch app provides instant cash advances up to $150. It also provides budgeting tools, automated savings features, and insights into finances that can aid users in managing their money effectively. Users can repay the cash advance through their bank account or paycheck.

Dave App

The Dave application lets users cash out as much as $100 without charges and credit checks. The funds borrowed will be repaid immediately after the next pay period is deposited, like Earnin, which allows users to give money to help with the application’s services. Similar to Earnin, however, Dave is more comprehensive. Dave’s app also comes with tools to budget, track costs, and notifications to stay alerted of any bills due.

Possible Finance

Possible Finance is an app that offers small loans of $100-$500 without requiring a credit check. This application offers a range of payment options, including the possibility of extending the due date of payments if necessary. Possible Finance aims to help clients build credit histories by notifying loans in credit reports.

Empower App

Empower is an application that lets users receive cash advances of up to $250. Additionally, it comes with features like personal financial planning, savings transfer, and spending monitoring to help users control their finances. Banks must be connected to users’ accounts in order to verify their accounts and repay loans.

Even App

The Even app allows users to be paid before the day of their next pay. Users can request for up to 50% of their wages in advance. The app comes with tools for budgeting, automatic savings options, and bill-management tools that assist users in keeping their finances in order.

PayActiv App

PayActiv’s application gives users access to earnings earned before their next payday. It allows users to gain access to up to $500 each pay period and utilize the funds to pay for bills, purchases, and savings. PayActiv offers additional features like setting savings goals, bill reminders, and tools for financial wellness.

Challenges of Loan Lending Application Development 

Developing a money lending application can be an exciting but challenging business. Here are some major issues you could face:

Navigating Financial Sector

Within the financial industry, specifically in lending, complexities are everywhere. To build a loan application that is guaranteed to be successful, it is necessary to navigate the complexities of lending processes, such as interest calculations and financial regulations. This requires an understanding of the financial system to build an application that seamlessly blends ease of use with adherence to industry standards.

Establishing Partnerships

Money lending apps may collaborate alongside traditional banks to simplify transactions, manage funds, or ensure compliance with regulatory requirements. However, establishing these partnerships requires a variety of issues, such as discussions, agreements with the law, and system and technology integrations. It is essential to find partners who align with the app’s goals and help create an effortless user experience.

Ensuring Regulatory Compliance

Compliance with regulations is a major problem in developing money lending applications. Legal frameworks differ in jurisdictions, requiring extensive research and continuous monitoring to ensure compliance. Thus, adjusting to different regulations, particularly in different regions, complicates development. Collaboration with lawyers is crucial to navigating this complex landscape and making sure that the app is compliant to ensure a safe and secure launch.

Safeguarding Users

Every transaction that involves money requires the highest amount of safety. So, in loan lending app development, ensuring the security and safety of applications is crucial. To improve the security of your platform, take into consideration the following:

• Authentication:

   Secure authentication methods are implemented, such as fingerprint authentication (face identification and finger scanning) and two-factor verification (strong password, confirmation via email or phone). In addition, you can use APIs to protect the user’s data.

• Encryption:

   Because of the sensitive nature of loan transactions, it’s essential to secure the transfer process and the customer’s personal information to avoid unauthorized access. Encryption mechanisms help prevent fraud and cybercrimes. Encryption protocols such as Rest and Transit add an extra layer of protection.

The Key Takeaway

The popularity of money lending apps is growing because there aren’t many of them; start-ups have the chance to invest their money in loan lending app development. If you’re planning to build an application for money lending for your own use, you may have the chance to compete with other applications and win in which consumers switch between bank loans and easily available loans via these applications.

This is why many lenders are opting to develop fintech-related applications, such as a loan application that allows cash loans upon demand. All you have to do is locate an experienced loan lending app development company to develop your application.

Get in touch with Techugo today to begin a journey towards digital transformation and excellence together.