How to Create a Peer-to-Peer Money Lending App?

The article was updated on February 06, 2023.

Money lending has always been relevant for societies worldwide. Especially in recent years, the demand for this kind of service has grown exponentially, as millions of people have lost employment and earnings because of the pandemic. That’s why they search for advantageous borrowing practices, and peer-to-peer lending platforms are among some of the especially beloved choices.

Is this market segment worth long-term investments? Let’s just take a quick look at some stats: Analytics shows a sevenfold global peer-to-peer money lending increase between 2014 and 2015 alone – from $9 billion to $64 billion; and will reach a projected value of $1 trillion by  2050.

If you’re planning to commit yourself to a peer-to-peer lending business, we are here to assist you in this process. Here you will get acquainted with the P2P lending business and learn how to create a money lending app that can establish you in this market niche.

Understanding P2P money lending apps

How a P2P lending app works

A peer-to-peer money lending system allows individual borrowers and lenders to perform money deals without the mediation of a conventional bank or broker. The participants have equal rights, and a peer-to-peer lending app is the only intermediary that runs the formal and financial procedures.

P2P lending platforms make money borrowing easy, not far from simple food ordering apps. Users need to install and sign up first, and then just select the sum they want to get or lend and the appropriate interest rate, and connect their bank accounts. The loan app undertakes the rest of the process, as well as ensures a secure and robust transaction system.

Peer-to-peer lending allows you to choose an agreed interest rate or designate it through a reverse auction, choosing the most favorable rate from multiple lenders. Whatever system you choose, peer-to-peer loans are more flexible than conventional ways of lending and more beneficial for all parties.

A P2P lending app also takes its share in the form of different fees. It appears that eventually, online lending will become a one-size-fits-all solution.


Pros & Cons of using P2P lending platforms

Old-school banks are the most widespread and time-tested mediums for money lending, and over the years, they have transformed and have become even more sophisticated.

Yet, why do so many people prefer P2P money lending apps?

Convenience and cost-effectiveness

If you decide to borrow a sum of money through a loan application, you’ll avoid annoying queues, in-person interactions, and even additional expenses on banking services. The app allows loan repayments in one digital space and does much of the job for you fast and seamlessly, all from the palm of your hand.

Favorable rates

Since there is an absence of any mediators, no one will make you pay more for additional banking services, its employees’ salaries, rent or equipment. Due to the infrastructural costs of traditional banking services, interest rates tend to be higher.

On P2P money lending platforms, there is only you, your lender, and the app itself. After all, beneficial loan rates are perhaps among the top reasons why borrowers choose loan apps.

Tailored loan conditions

The steps of the involved parties are quite autonomous in the P2P loan interaction and can directly determine the loan conditions such as sums, interest rates, and deadlines. In this way, P2P money lending becomes a flexible system that attracts people who don’t appreciate strict banking requirements.

Multiple customers for a single lender

Apart from some of the general conveniences and obtained benefits, P2P lenders can also reap other specific advantages. Not only do they cut costs and enjoy the convenience of the app, but they can also lend to several borrowers simultaneously.

The simplified and automated lending procedure allows lenders to interact with multiple customers without much additional effort.

Safety and trust

Although there is no third party in the process of online lending, peer-to-peer lenders can have trust in the security of the application and the parties involved due to the system’s thorough inspection process. The users must provide scanned copies of their documents to prove solvency. For an additional fee, you can also test your personal data and thus boost rating higher.

However, many people reasonably treat a modern money lending system with caution. They tend to think twice before deciding to loan money without official intermediation.

So what are the possible downsides of peer-to-peer loans?

Limited accessibility

Not everyone can participate in P2P lending. If your credit rating is poor, you may need to pay interest rates that are even higher than in conventional banks. In some cases, you may not even be able to become a P2P borrower for the same reason.

Loan amounts are lower

Peer-to-peer lending sites are safe and trusted but still not fully compatible with traditional options; you can borrow up to several tens of thousands but nowhere near millions of dollars.

Debt collectors are still there

While lending apps are often automated and AI-powered, you will not get any protection if you can’t pay off the loan in a timely manner. The platform can involve debt collectors that will force you to repay in court. However, this scenario is also relevant for traditional borrowing.

Ultimately, the ever-growing popularity of peer-to-peer lending websites and loan apps proves that their benefits outweigh possible drawbacks, at least for a large number of users.

The main types of P2P loans

Your app can focus on one P2P lending type or combine several of them. Each kind of loan has its unique set of features and audience.


Here are some of today’s most common P2P loans:

  • Personal loans. Personal loans from private individuals are a widespread type of peer-to-peer money lending, as it has fewer restrictions, lower rates, and requires less application paperwork. These loans cover a wide range of needs for common people, from different types of bills and purchases to debt consolidation.
  • Business loans. Some P2P lending apps invite companies to become a borrowing party. It’s a more complicated process than individual on-demand money lending because you need to prove the credibility and prospects of your business. For that reason, startups have fewer chances of receiving peer-to-peer loans.
  • Home loans. People often need loans to buy a property or furnish it. Some of them prefer adaptable online lending options, with the interest rates calculated based on the borrower’s paying capacity.
  • Car loans. Vehicles are arguably as demanded as real estate which makes car loans a common request. Car P2P money lending works similarly to home loans, just the interest rates may be higher.
  • Educational loans. Students pay for higher education, and it’s often the case that they can’t afford their dream college or university because of exorbitant costs. That’s when P2P money lending platforms come into play and help make the students’ dreams come true.
  • Medical loans. Medical insurance is essential for healthcare yet unaffordable or burdening for many citizens. That is why some P2P lending apps include this type of loan into their service spectrum.

As you can see, building a loan app means solving people’s financial issues in various aspects of their lives. The best peer-to-peer lending platform can provide the most advantageous services for various borrower groups.

To get an idea of a quality P2P lending app, let’s learn about some of the most popular players in this market niche.

Examples of peer-to-peer lending apps


In 2005, Payoff was in the avant-garde of the peer-to-peer lending app development. Today, it remains one of the leading fintech apps in the niche thanks to its favorable conditions: the APR being between 5.99% and 24.99%, loans up to $40,000, and compensation terms between 2 and 5 years.

Finally, the icing on the cake, there are no common payments like application, early payment, annual, or late fees. You should only pay a traditional origination fee (0% to 5%) once. The platform is convenient, transparent, and even offers some tools for financial education.

However, there are some details you may not like about this service. First, it’s not a nationwide app, and you may not access it from certain locations. Second, the minimal credit is $5,000. Third, Payoff is not suitable for inexperienced borrowers.



In 2012, a group of former Google workers created one of the most beloved peer-to-peer lending websites. Upstart stands out among other similar platforms, as it allows people to get loans even if they are first-time borrowers or don’t have an extensive credit history. The service can request information about your education or job to estimate your creditworthiness.

On the platform, users can borrow from $1,000 up to $50,000 with the repayment terms of 3 to 5 years. Upstart also charges some additional fees, although origination fees may not be applied. The upper bound of the APR is 35.99%, which is quite high in contrast to similar P2P money lending platforms.


Upgrade is among the most flexible peer-to-peer lending platforms. It offers loans for various needs starting from $1,000 to $50,000. For small loans, you will get a favorable APR of 5.94%. However, the maximum APR of 35.47% is pretty high even compared with traditional credit union options, not to mention other P2P lending services.

The online lending platform requires origination fees that depend on your loan. They can be as low as 2.9% and as high as 8%. Just like Peerform, Upgrade has a soft credit check option. In addition, you can find extensive FAQs and info on financial education on the Upgrade website.



In 2005, Prosper was one of the first US P2P money lending platforms, and today, it also remains prominent. Borrowers on Prosper can get a loan from $2,000 up to $40,000 with interest rates of 7.95%–35.99%. The range of loan types is quite diverse, from debt consolidation and healthcare to home repair.

Users need to pay traditional origination and late fees. One of Prosper’s best features is the joint application: you can request a loan together with another borrower. This opportunity can increase your credibility and enhance your chances to receive the desired sum.



Peerform is a peer-to-peer lending app, founded by the members of the Wall Street administration in 2010. It provides peer-to-peer loans with starting interest rates of 5.99%.

To become a borrower, your credit score can be as low as 600, which makes Peerform stand out among most other P2P lending platforms. Potential clients can also see their rates with no effect on the credit score using a pre-qualification check.

Borrowers can get a loan for various purposes, from a classic car or medical loan to wedding expenses. However, the service doesn’t provide educational loans. Some other downsides may include low maximum loans ($25,000) and a short 3 to 5 year repayment term.

Also, clients need to pay additional costs such as origination and late fees, even though the service will warn you about it beforehand.


How to create a money lending app

1. Do market research

Peer-to-peer loan lending app development begins with the discovery stage, just like with any type of app creation. You need to learn the market inside and out, understand how it functions, learn your target audience, and how to create a loan app that will bring desired outcomes.

Another aspect of market discovery is to explore the niche leaders, analyze what brought them to this position, and what downsides they have. You can also collect some ideas for your own product in this way.

Basically, you have already started your discovery stage with this P2P money lending article, but your research should be never-ending. Not only does it give you a complete picture of your future app, but it also helps you keep pace with recent trends, issues, and requests.

2. Security and legal compliance

Loan app development goes hand in hand with security issues. Could you trust your money to questionable users through an insecure application? As a developer, you need to protect both users’ data and your product.

This process implies three main aspects:

  1. Authentication. Identity verification protects users’ personal data. Luckily, developers possess a huge choice for authentication methods, from passwords and 2-factor authentication to face recognition and fingerprint scanning.
  2. Encryption. On P2P lending platforms, data encryption is vital. Use only secure server connections and leverage all tools and means to avoid data breaches and other privacy issues.
  3. Legal compliance. Besides technical matters, regulatory aspects are highly important for apps that contain users’ sensitive information and mediate money transactions. Make sure you know global and local laws and comply with them.

To ensure the security of a loan app means to build trust, otherwise, you can lose customers and your place on the peer-to-peer money lending market altogether.

3. Choose a business model

You need to put an enormous effort into building quality and in-demand fintech apps. So you might also want it to pay off in full. Luckily, you have a selection of business models to choose from.

Along with classical advertising and premium subscriptions, you can involve monetization tactics that are typical solely for peer-to-peer money lending services – various fees. The most common type is an origination fee, which is usually 1 to 6% of each loan. You can also request a transaction fee, it should not be more than 3% of each payment.

Do you need a loan app development?

Having a rich portfolio of fintech solutions for industry leaders like Western Union and dozens of startups worldwide, we can help you build a loan app that will be outstanding and profitable!

Contact us

4. Must-have and additional features

If you want to build a money borrowing app, you need to know about the essential and optional features it should have. Without must-have functions, your project won’t be viable and demanded, and additional details can make it more interesting, helpful, and engaging.

Any lending app should certainly have the following components:

  • Registration form. It’s the first step your potential clients make after app installation. It’s important to make the registration process fast and simple. Consider adding a possibility to sign up with social media accounts or a phone number.
  • Personal profile. On this page, users can edit personal data or add more information about them or even track their in-app activities. Design it clearly, so users can navigate intuitively.
  • Loan application. This tab is the heart of a loan app. First-time users would highly appreciate a brief guide on the basic functions and possibilities of the loan application procedure.
  • Loan calculator. Automated loan calculation simplifies the process of choosing the most appropriate lender. Potential borrowers don’t need to count monthly payment amounts, interest rates, and other crucial points on their own.
  • Payment tab. This section lets users track their payments and commitments. Also, make sure you have multiple payment and withdrawal options to satisfy a broader audience.
  • Payment schedule. The feature breaks down a loan amount into yearly, monthly, or weekly payments. So, the borrower gets a payment plan that helps design the budget.
  • Notifications. While in many other apps this function can be optional, it’s essential for peer-to-peer lending platforms. Users need to pay off the loan on time, so it’s better to notify them a couple of days before the upcoming payment.

Want to step up your app? These functions will turn your MVP into a qualified money lending space:

  • Credit score. In many peer-to-peer lending websites, lenders consider the borrower’s credit history before they decide to provide them with a loan, so it’s an important metric for such services. Connect your loan app to a credit score service to help users track their creditworthiness.
  • Ratings. It’s kind of a reward for users who meet their loan obligations reliably and in due time. Just like credit score, the higher your ranking, the more chances you have of finding a loan partner.
  • Chatbot and live chat support. Your app should be as comprehensible as possible, but some users may still want to get some assistance. Make sure they can reach out to a human or bot for help.
  • Geolocation. If your app has a payment option that allows the use of ATMs, the geolocation feature can help users find the nearest spot.
  • AI-based analytics. This feature provides quality real-time analysis of in-app activity. Users can get additional info about potential lenders and borrowers. App admins use AI-based analytics to get an insight into the app usage and user experience to further improve the app.

Also, don’t forget about the admin panel. Such features as dashboard, profile approval, user and loan management, CRM and CMS integration, and bank partner management allow admins to monitor and improve the app swiftly.

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5. APIs integration

Financial APIs can be a powerful tool for building an effective P2P lending app. APIs can improve the production process, save money, cut the time for development, and empower your fintech app with additional functions. It’s one of the aspects that make online lending more efficient than traditional banking, both for individuals and financial institutions.

For a fintech app, APIs can serve multiple purposes. Developers use them to make account verification more solid and safe, mediate transactions, and even aggregate several accounts for more convenient use.

The best thing is that many APIs and other app building bases are already available and are ready for use. Just get them and take your application to the next level.

6. UX/UI

Although users choose fintech apps rather for their functionality than design, the latter is still essential. We’ve compiled some quick tips on how to polish up your fintech app using UX and UI.

First and foremost, make it simple and intuitive. Disturbing icons and pictures can harm the user experience, as the app becomes less convenient to use. Cut unnecessary elements, use concise descriptions where needed but avoid overloading the screen with text elements.

Finance is all about numbers and stats, and you want to organize information clearly, make it intuitively searchable and receivable. Include graphics, tables, and schemes to make complex information transparent and help users comprehend it effortlessly.

If you want to maintain user engagement, consider collecting useful info on financial education in a separate section. You can also include game elements if it’s suitable within your app concept.

Quality UX and UI will wrap up your app and make it stand out among other P2P lending platforms. But furthermore, it finalizes users’ positive impressions, builds trust, and improves your retention rate.

7. Develop an MVP

When you feel you are ready to develop a loan lending mobile app, it’s better to start with an MVP. This thoughtful step can save you quite a lot of time, effort, and even money. A minimal viable product will show the slips and mistakes you’ve made on the go.

An app that contains essential features is only a framework for future improvements. However, at this stage, you can already estimate how your potential users accept this app, dive into their needs, see the strengths and weaknesses, and even retain the first customers and generate income.

An MVP is a great foundation for the finished version of your loan application. After you have polished this draft, you are ready to jump into the market confidently and forge ahead with minimum risks and losses.

8. Gather user feedback and scale the app

If you want to know whether your app works well, just ask your users about it. Add features to gather feedback: invite clients to rate your app, leave a comment, participate in a quick and concise survey, interview them in a chatbot, or even suggest writing an email. Positive or negative, these reviews provide invaluable insights into the functionality of your app down the road.

Remember that peer-to-peer lending app development doesn’t end with the product release. Use clients’ comments, reviews, and emails to see which components need to be improved. Feedback, even if negative, offers pivotal points for improvement.

Trends will come and go, but your audience is the most important guiding light for your progress. Keep up with your users’ needs and wishes, and your app will surely become a market leader.

Our work case for financial institutions

A mobile application where users can save money, lend and borrow to/from fellow application users, find people to trade with, create groups and manage their motshelo accounts (deposit, withdraw and transfer).

With Motshelo Mobile users also can:

  • Get access to cash through VISA Card and all major retail shops
  • Generate summary reports on all transactions
  • Track individual savings, trades, group’s financial status


Summing up

Peer-to-peer money lending is a new form of financial interaction between people who need financial assistance and those who can support them. It’s a convenient alternative to traditional institutions that can be profitable for P2P lenders, borrowers, and you as an app owner.

If you decide to delve deeper into the technical and regulatory aspects of this niche, you can likewise contribute to the P2P loan industry with your unique platform.

At Eastern Peak, we have substantial experience in fintech app development. You can count on our team and contact us to embody your concept of a prosperous money lending app.

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