Key Powerful Features of a Successful P2P Lending Platform

• By Paramjit Singh

• 23rd May 2024

The world is witnessing emerging ways of investing and taking loans. P2P lending platforms are one of the highlighting reasons for the market disruption. Years ago, it was impossible to imagine digital asset lending and borrowing without any intermediary. 

However, the advent of blockchain technology has opened up a world of possibilities, empowering us to build ‘trustless’ networks in ways that were previously unfathomable.

Talking about P2P lending platform, it is a decentralized crypto, money and/or digital asset exchange platform which has eliminated the need for third-parties. Especially when you’re outsourcing your P2P lending platform development project, there are certain features of a P2P lending platform that you must focus on.

Whether you’re a startup owner searching for a reliable P2P lending platform development outsourcing company or building it yourself, you must be aware of certain features to incorporate in the solution.

To make it easy for you, we have created a list of the top features of a P2P lending platform. But before that, let’s understand what a P2P lending platform is.

What is Meant by P2P Lending Platform Development?

A P2P lending platform is a peer-to-peer (P2P) fundraising platform that allows the trade and/or exchange of money, cryptocurrency or tokens without interference from any third-party beneficiaries. Since there is no intermediary intervention, the platform is called Peer-to-Peer (P2P).

P2P lending platform development refers to the creation of a lending platform based on blockchain technology. Such a platform hosts an interface that is open for the use of both lenders and borrowers. Lenders can create their profiles and invest a desirable amount, which can yield handsome interest rates. At the same time, borrowers can borrow the money without any collateral.

You must be wondering how lenders ensure security upon loan repayment. Well, these P2P lending platforms offer borrowers a fixed amount of time to repay the loan. Therefore, these platforms are a lucrative investment for people who want to create diverse sources of passive income without any hassle.

How Does a P2P Lending Platform Work?

The primary foundation of any decentralized P2P lending platform is that such platforms connect lenders directly with the borrowers without any need for banking institutions or Non-Banking Financial Companies (NBFCs).

Here is how a basic P2P lending platform works in action:

Step 1. Both lenders and borrowers create their individual profiles on the P2P lending platform by providing their KYC/AML information. 

Step 2. When in need, a borrower raises the request for a loan application with the required amount. He also mentions his current financial status.

Step 3. An interested lender accepts the request and lends the desired amount either fully or partially. 

Step 4. When the required conditions are met, a smart contract is implemented automatically. 
Step 5. Once the loan amount is transferred to the borrower’s account, he can repay it with monthly payments and an interest rate.

What are The Features of a P2P Lending Platform?

Now that you’re aware of how a P2P lending platform works, let’s discuss the important features of an ideal Peer-to-Peer lending platform development process that makes the platform secure, transparent, sophisticated and highly credible. 

The functionality of a P2P lending platform decides the user base. The more seamless the functionalities, the higher the user count.

Check out the following significant features that can adorn a P2P platform to the highest level of sophistication and simplicity:

1. Simple Account Creation Process

A P2P lending development platform is created for the use of lenders and borrowers. Therefore, the account creation process must be simple and seamless for both parties. 

For Borrowers

An ideal P2P lending platform must be functional enough to assess a borrower’s creditworthiness by analyzing his/her financial and general credentials. It should verify the identity of the borrower by fetching official documents such as a passport or driver’s license.

For Investors

Simultaneously, your created P2P lending platform must register various significant details of an investor, including income and employment status, investment preferences and risk tolerance. 

Therefore, sophisticated P2P fundraising platforms must verify the identity of investors and borrowers to add an extra layer of security.

2. Robust Loan Application Process

A P2P lending platform must be developed keeping in mind to build a streamlined process for borrowers to apply for a loan. A borrower must be able to set a loan range and browse a list of potential lenders that match his interests. 

At the same time, investors must be equipped with complete transparency to gain insights into the credit history, financial stability and employment status of a borrower who sends the loan request. Later on, an investor can decide whether to accept or reject the loan request based on his risk tolerance and investment strategy.

3. Comprehensive Profile Management

Another solid feature of a P2P lending platform is a comprehensive dashboard that lays down the lender’s and borrower’s profile details. It should include other pivotal details such as lending/borrowing history, upcoming/remaining payments, KYC/AML details, credit score, connected digital wallets, etc. 

It is always a good idea to have a ‘Help’ or ‘Support’ options or chatbots that can solve the queries of investors and borrowers. This functionality will enhance your P2P lending platform’s credibility.

4. Automated Loan Matching

Implementing an optimized loan matching process is a complete game-changing feature of a P2P lending platform. By using advanced machine learning algorithms and data analytics, loan matching systems can assess the creditworthiness of a borrower and recommend a pool of borrowers to the investors along with their potential credit risk.

Through such functionality, investors can diversify their investment portfolio in a safe manner and explore a wide range of investment opportunities that align with their return goals and interests. 

5. Seamless Payment System

An ideal P2P lending platform must have a secure and efficient payment system for processing loans. The platform must offer a myriad of options to make the payments. These options include payments through digital wallets, debit and credit cards, and net banking, etc. You can also partner with third-party trusted apps to enable payments for investors and borrowers.

6. Advanced Credit Scoring Models

Traditional credit score rating systems leverage limited data resources to assess the creditworthiness of a borrower. An efficient P2P lending platform blurs this line of unbalanced estimations and utilizes advanced methodologies to create credit scoring models. 

The Peer-to-Peer (P2P) lending platforms offer an in-depth evaluation of credit scores by collecting data from unconventional resources like social media, non-traditional income streams and online footprints to bring out comprehensive information to understand the borrower’s financial situation. Such functionality attracts investors and gives them a secure edge over others.

7. Anti-Fraudulent Systems

Developing an integrated P2P lending platform goes hand-in-hand with predicting the number of users who’ll use the platform. Therefore, it is crucial to stave off anti-fraudulent activities from the platform. 

P2P lending platform developers must integrate efficient fraud detection mechanisms that can identify risks associated with bogus identities, identity theft and other malicious activities and eliminate any other potential risks.

8. Automated Smart Contract Implementation

Incorporating smart contracts in the development of a P2P lending platform is one of the platform’s most transformative features. These smart contracts are ‘trustless’ decentralized contracts that do not require third-party intermediaries to be implemented. They work independently once certain pre-defined conditions coded in the contract come true.

Smart contracts make the payment process in lending and borrowing more efficient, transparent and robust. These contracts also eliminate operational load and other redundant fees. Therefore, smart contracts make the loan disbursement and repayment process simple, advanced and secure without any third-party intervention.

9. Secure and Compliant

Following industry-standard security protocols such as multi-factor authentication, end-to-end encryption, and secure communication channels creates a powerful P2P lending platform that is secure and compliant with the security protocols. The ultimate goal of your P2P lending platform development should be to offer the utmost security and compliance with the industry security measures.

Another great feature of a P2P lending platform is to integrate Know-Your-Customer (KYC) and Anti-Money Laundering (AML) functionalities to ensure that only genuine individuals use your platform. This practice also mitigates the risk of identity management and ensures efficient individual assessment.

Partner With an Industry-Recognized P2P Lending Platform Development Company

Are you new to the blockchain ecosystem and want to step into the realm of P2P lending platform development? Look no further than Deftsoft, a reliable P2P lending platform development company. With more than 18 years in the industry, we have contributed our expertise to a variety of projects. 

Our team of experts will help you bring your vision to life with utmost importance to the P2P lending platform’s security and user experience. We ensure the integration of advanced features to the P2P lending platform development.

Reach out to us for more info!

FAQs: