Entrepreneurs involved in P2P lending software development help to connect borrowers and lenders directly without the presence of any intermediaries. Transactions are executed seamlessly with the help of in-built smart contracts.
Some of the advantages of kickstarting P2P lending software development are
Reduced operational costs.
Possibility to expand business operations globally.
Faster approval of loans when compared to the traditional methods.
Fixed interest rate ensuring certainty.
Better transparency as information can be accessed by anyone on the network without any restrictions.
Payment of interest permitted with cryptocurrencies.
Flexible repayment duration.
The core features present in P2P lending software development
EMI and Loan calculator - The borrowers can know the monthly installments to be paid according to the loan amount, duration, and the interest rate. Ensure that the borrowers and lenders know how to use this calculator by creating a separate page on your website explaining its detailed functioning.
Automation of KYC/AML norms - Ensure that the identity and background of all your investors undergo the KYC/AML verification process as it is unavoidable according to the law. The entire process can be automated saving time and costs, This will lead to a better user experience.
Advanced search functionality - All the different products available on your platform should be accessible via an advanced search feature. It should be categorized according to various factors like risk profile, period, scale, country, and industry.
Presence of a CRM system - The important information, announcements, and financial reports must be available immediately to the relevant investors. This will reduce your operational burden to a great extent.
The typical process in P2P lending software development
Creating a lender profile - An interested lender has to create an account on the platform by submitting his personal details and banking information. This will help the borrowers to find them easily and avail their services quickly.
Waiting for a prospective borrower - Once the lender creates his profile on the platform, he must wait for the potential borrower to make a request for the loan. The lender can arrange for a direct interview with the respective borrower to assess his requirements.
Account creation by the borrower - A borrower has to submit his details on the platform like personal information, legal documentation, collateral, and the guarantee of the third party.
Borrower submitting his loan request - An eligible borrower can send his loan request to lenders worldwide. The availability of robust smart contracts makes this process easier and simpler.
The lender establishes a direct connection with the borrower - Before accepting the borrower’s loan request, the lender will ask a lot of questions to the borrower. Only when he is satisfied with the responses, he will accept the loan request and take steps to grant the specific amount of credit.
Utilizing a smart contract for determining the interest rate - Smart contracts check the creditworthiness of the borrowers by categorizing them as either high risk, medium risk or low risk. If a borrower falls under the low risk category, his loan will attract a low interest rate.
The lender disburses the loan - Once the borrower has submitted his loan application on the platform, the lender will transfer the required amount of money to the borrower’s wallet directly. The borrower has the responsibility to ensure timely repayment of the loan according to the terms and conditions mentioned in the loan agreement.
Automation of payments by the smart contract - With the help of a crypto wallet, the borrower can ensure the settlements via a smart contract. A late fee will be imposed in case there is a delay in the payment of interest by the borrower.
As seen above, the business of P2P lending software development is making waves in the market. Hence, the time is right for you to launch your venture and define your niche to take your business to the next level quickly.
