The consumer lending market is booming as never before. People find P2P loans a better alternative to bank credit since digital lending platforms provide lower rates and faster approval. So there is no wonder fintech businesses are looking for an opportunity to build loan lending software.
However, creating any fintech solution is a complicated and quite costly activity, and lending platforms are no exception. If you want to make all the features from scratch, you should be ready to invest plenty of time and money into the process.
But how much exactly? What exact number should go into a budget plan and how much time should you allocate to development? This article will answer these questions and provide you with an average estimate of mobile lending app development as well as a strategy for how to estimate it in detail according to your project requirements.
If you are familiar with how financial business functions and what you need to do to make it work, you already know what we are going to discuss in this chapter. If you are just at the beginning of your journey, this information will be useful for you.
Before you start to plan the budget for the actual development process, make sure you have met the following requirements for launching a P2P loan application as a fintech business:
Initial capital for investments
Additional expenditures like business cards
Without these necessary steps, your loan apps for iOS or Android will have a hard time succeeding on the market. Also, besides the above-listed requirements, there are several more tech-related things we need to mention.
Since all lending-related financial processes are going to happen in the online environment, you have a great opportunity to facilitate document management. Organizing, storing, and analyzing documentation is less tedious due to process automation. The documents will be automatically saved in the system which means all related parties can access them without any trouble. It can help an individual make payments on time and receive a payment notification if needed.
When we talk about any financial process including digital lending, we cannot talk enough about security. If you wonder how to create a money lending app, the question of data privacy will be of top priority. Everything your users share with you should stay safe from cyberattacks and unauthorized access.
To make sure that your security is sufficient, you can apply penetration testing. This is where a team of certified ethical hackers imitates a cyberattack to check for possible bottlenecks and loopholes. When the testing is complete, you will have a detailed report indicating everything you need to do to improve your security measures.
Even though the digital lending market started to rise in popularity only a couple of years ago, a lot of online mobile solutions already provide their loan services to the public. This means that people have quite a solid image of what a mobile lending app should look like. Your app should definitely have bank account integration, a loan application, credit score analysis, transaction history, account management, analytics tools, and customer support.
This list is a must-have for a lending application. If you want to become truly unique and stand out from the crowd, you may also want to consider implementing electronic signatures, auto-payment, rating systems, and artificial intelligence solutions.
If you want to know more about what features to include in your application, the pros and cons of custom P2P app development, and what challenges to take into account, check out our blog post on the topic.
The first factor that will influence loan lending app development cost is the team composition. Generally, for most mobile applications, the list of team members looks quite the same:
This list is accurate for a situation when you want to build a mobile app from scratch. If you already have some parts of the project done or you have a complete project but need to implement some changes to it, the number of positions may vary.
If we talk more specifically about money lending app developers, these team members will be enough to create a Proof of Concept (PoC) or a minimum viable product (MVP). For a full-fledged solution, you need to consider adding the following specialists:
Business analyst—To analyze the requirements, conduct competitive analysis and market research, and help prepare the necessary documentation.
Penetration testing engineers—To conduct penetration tests. As we mentioned, penetration testing can be a useful tool for a lending solution, but it can hardly be conducted by average QA engineers.
DevOps team—To oversee the coding process of both the frontend and backend engineers and create a smooth release pipeline.
Team leads—To help the team solve major issues and guide the development process.
This team composition will be the most efficient for creating a perfect lending mobile solution. Also, don’t forget about a non-tech part of your team like lawyers, marketing specialists, and support agents. They will maintain your app’s image and promote it to potential users.
The next factor to consider is the list of tools required to create a mobile app. A tech stack is a set of tools and technologies used for mobile development. Your lending app’s feature set, performance, scalability, and device compatibility will depend on it. Also, it will contribute a lot to the security and sustainability of your service.
We have listed the most suitable tech stack for a mobile lending solution based on our experience:
Mobile: Swift, Kotlin, Core Data
Backend: PHP, jQuery, Node.js, Java Spring Boot, Swagger, AWS, Firebase, Twilio
Frontend: React/Redux, TypeScript, HTML5, CSS4
Analytics: Google Analytics
DevOps tools: Datadog, Kubernetes, GitHub, Atom, Visual Studio
Design tools: Figma
Database: MySQL, PostgreSQL, MongoDB
Business tools: Slack, Microsoft Teams, Zoom, any mail agent like Gmail or Microsoft Outlook
These tools are proven to be efficient for lending software development. If you have specific technical requirements for your project, feel free to contact us and discuss them in detail.
Every feature of your lending application will require a certain amount of hours to complete. Here is an average estimate for a team to build each of them.
|User account||80 hours|
|Loan management||62 hours|
|Payment and billing||96 hours|
|Peer-to-peer lending||64 hours|
|Admin panel||334 hours|
|Main dashboard||36 hours|
|Credit score check||20 hours|
|Documents upload||28 hours|
Please take into account that these hours do not include the discovery phase, design, and post-release support. The time spent on these aspects will depend on your requirements.
Team, time, and technologies are not the only factors that will have a major influence on how much your lending app costs. Other important aspects to consider include the partnership type, development and design complexity, and the platform where your app will operate.
You can either hire all the necessary tech specialists as full-time members of your staff or hire an outside company that will complete the app development for you. Both approaches have their pros and cons. For example, a complete in-house team will be easier to communicate with and control, which is important for a financial company. However, an in-house team is way more expensive.
Working with a third-party agency will be cheaper, but you can face communication issues like being in different time zones. You may also have some security concerns since your app will closely work with private user data.
The more features you want to implement, the more time and money you will have to spend on mobile loan app development. It’s actually something that is discussed and planned with your team before the design and development stages even start.
|MVP||Only core features are implemented; The app fixes a major pain point of your target audience; Small tech stack|
|Complex||A multifunctional application; More advanced features; Complex integrations and APIs|
Even though functionality means more for lending mobile app users than the looks, you still need to pay attention to user experience design (UX) and user interface (UI). UX is responsible for creating a way people will navigate inside your app and UI is meant to make it pleasing to the eye.
You can either build a native app or a cross-platform/hybrid app. A cross-platform means that the app will run on both iOS and Android while having a common codebase. A native app will have a separate codebase for each platform, so technically, you will need to build two solutions— one loan app for Android and another one for iOS. The choice here will be based mostly on your initial requirements.
Since the lending market is quite successful, there are already plenty of loan apps for Android and iOS that provide loans to private individuals and businesses. Here are the most outstanding examples of mobile money loan apps you can look at.
Kabbage is a fast and easy-to-use lending application for businesses. This app can deliver about $100,000 to a person within minutes. Once you register in the app, you’ll have access to the full transaction history. This app generates the best service model for industries like restaurants, auto-shops, spas, etc. However, bear in mind that Kabbage was acquired by American Express in the fall of 2020.
SoLo Funds is a popular option for people who want to get small and medium loans quickly. The app matches borrowers with individual lenders to meet their needs. Borrowers can get the requested funds in less than 20 minutes, however, not all borrowers enjoy using this service.
MoneyLion is a fintech company that provides money lending services to its users. They offer low-cost loans up to $500 with an annual rate of 5.99% for 12 months. Loan funds transfer to you almost instantly—within about 15 seconds.
Now that you know what factors influence lending app development cost, we can talk about the budget planning strategy. The steps necessary for a correct project estimation include the following:
Break the process down: The first thing you and your software development partner need to do is to break the whole development process down into separate tasks that are easy to manage. Then, your partner provides you with the required team composition and assigns them their respective tasks.
Choose the pricing model: When you start working with an agency, they can offer you one or several ways of being charged. The most popular options are fixed price and time and material basis methods.
Make an estimation: Here, you actually count how much money it will take to create a mobile app.
Analyze the risks: Your development team should inform you about possible issues you can face and how to avoid them. Also, don’t forget to add a “risk buffer” to your budget in case something goes wrong.
One of the most influential factors for any cost estimation is a team’s hourly rate. Usually, this differs depending on the region where the team is from.
Here is an average cost of loan app development based on the time estimation we made before (one platform, hourly rate ~$50/hour):
|Payment and billing||$4,800|
|Credit score check||$1,000|
You can see that the average cost of mobile lending app development will be around $60,000. An MVP may cost less, and implementing features like AI and auto-payments will increase the budget you need to allocate.
On-demand economy and pandemic limitations contributed a lot to the people’s desire to get as many services from the comfort of their homes as possible. Android and iOS loan apps make it come true: You don’t have to go anywhere to receive the loan you need. So no wonder a lot of businesses are opting for loan app development. This task will be a bit easier for you now. You know how many resources you’ll need to complete the app and can make more realistic plans.
Here at Yellow, we are ready to help you with the whole lending app development cycle. Drop us a line and we will provide you with a detailed estimate of your project and the team to create your loan solution.
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