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Life can be full of surprises. Sometimes, we face unexpected expenses like home repairs or medical bills that can cause a lot of stress. Fortunately, Loan Apps like Possible Finance are here to help.
Did you Know Possible Finance has already provided over 2 million people with small loans to help them through tough times? Having said that, they don’t just give out money – they also tell credit bureaus when people pay on time, which helps them build good credit. This can make it easier to get financial help in the future and break the cycle of money problems once and for all!
However, Possible Finance is just one player in a booming market. The instant loan application market is expected to reach a staggering $8.79 billion by 2031, growing at a rate of over 10% annually.
Creating a similar loan app with easy loans and flexible payments can be a great opportunity to capitalize on this trend. So, we’re going to discuss everything you need to know to develop an innovative loan from scratch!
Important Things To Know About Possible Finance App
Developed in 2018, the Possible Finance app offers a responsible alternative to payday loans. Users can access up to $500 in fast cash and build a credit history, even with bad credit. Unlike payday loans, Possible focuses on breaking the cycle of debt with affordable repayments and no late fees. Boasting over 750,000 downloads and a stellar 4+ star rating on the Google Play Store, Possible has also partnered with the reputable Coastal Community Bank to provide these financial tools to a wider audience.
What Makes the Possible Finance App Unique?
Possible Finance isn’t a typical loan app. They focus on responsible borrowing and offer features that go beyond just getting a quick loan. Here’s what makes them unique:
- Accessible Loans for All: Even with bad credit, users can borrow up to $500 with clear repayment plans. This promotes financial inclusion by helping those who might struggle with traditional lenders.
- No Late Fees, Ever: Unlike many loan apps that hit you with hidden fees, Possible offers a refreshing change with their “no late fees ever” policy. This encourages responsible borrowing and avoids trapping users in a cycle of debt.
Possible Finance goes beyond simply giving loans. They offer features like:
- “Credit Builder”: This feature helps users establish or improve their credit score by reporting on-time payments to credit bureaus. This can unlock better loan rates and financial opportunities in the future.
- “Track My Spending”: Gain control of the finances by seeing exactly where the money goes. This feature helps users identify areas where they can save and make smarter financial decisions.
- “Set Goals”: Set realistic financial goals and track your progress towards achieving them. This keeps users motivated and on track for financial success.
Why People Use Them:
These features address key user needs:
- Financial Inclusion: People with bad credit have access to fair loan options.
- Escape the Debt Trap: Clear repayment plans and no hidden fees prevent users from getting stuck in debt.
- Financial Literacy and Empowerment: Tools help users manage money better and build a secure future.
How Does Loan Apps Like Possible Finance Generate Revenue?
Loan apps like Possible Finance are hitting a sweet spot for both borrowers and lenders.
For users, these apps offer a lifeline. They’re quick and easy to use, especially for those with bad credit or limited credit history. Traditional banks might reject them, but these apps provide an alternative. Plus, everything can be done on a smartphone – no paperwork or bank visits are needed. Reputable apps are also transparent about fees and interest rates, allowing users to make informed decisions.
For companies, loan apps represent a big opportunity. There’s a vast market of people who need small loans and can’t get them through traditional channels.
Lower overhead costs, thanks to operating through apps, make this an attractive business model. Additionally, advancements in data analysis and machine learning allow these lenders to assess creditworthiness and manage risk effectively.
Possible Finance generates revenue through a few channels:
- Membership Fees: The Possible Card charges an $8 monthly membership fee.
- Interest on Larger Loans: While they advertise no interest on the Possible Card, Possible Finance offers traditional installment loans with APRs ranging from 54.51% to 240.52%.
Here’s some more details about the Possible Card Membership,
| Feature | Possible Card ($400) | Possible Card ($800) | Average Credit Card |
| FICO Check | No | No | Yes |
| Interest Rate | 0% | 0% | 12% to 30% (after zero-interest period) |
| Late fees | $0 | $0 | $26 (on average) |
| Deposit | $0 | $0 | Minimum $200 (for secured credit card) |
| Monthly Membership | $8 | $16 | $0 to $59 |
Key Market Takeaways for Digital Lending Apps
Source: GrandViewResearch
Gone are the days of lengthy in-person applications and waiting weeks for decisions. Digital lenders streamline the process, automating tasks and speeding up approvals, as evidenced by a recent partnership between PortX and LendAPI. This collaboration allows financial institutions to leverage LendAPI’s digital lending platform and PortX’s integration technology, streamlining loan origination and account opening for an even smoother customer experience.
Open banking is another key driver. By securely accessing a borrower’s financial data with their consent, lenders can gain a more complete picture of their financial health. This not only expedites the decision-making process but also allows for personalized loan options that better suit individual needs. We’re also seeing established banks fight for a piece of the digital lending pie. Wells Fargo recently announced a partnership with fintech firm Greenlight to offer debit cards and financial literacy tools to parents and children.
developers, with combined 50000+ coding hours experience
What Makes Possible Finance So Popular Among Its Users?
Possible Finance has carved a niche in the financial services market by offering an alternative to traditional payday loans. With features that address common pain points, it’s no wonder Possible Finance has become a popular option for many borrowers.
Here’s a look at some key features within the Possible Finance app that set it apart:
1. Easy Loan Applications
Possible Finance understands that financial needs can arise unexpectedly. Their app-based process streamlines loan applications, with most users receiving a decision within a day. Once approved, funds can be loaded onto a debit card in minutes with “Instant Funding” or deposited into a bank account within a couple of business days.
2. Flexible Repayment Options
Unlike traditional payday loans with short repayment terms, Possible Finance offers flexibility through “SplitPay.” Borrowers can spread their loan repayment over eight weeks with the option of an additional 29-day grace period. This allows users to manage their repayments comfortably without feeling pressured.
3. Credit Reporting
Possible Finance does more than just offer a loan. The company recognizes the significance of establishing credit for a secure financial future. Through “Positive Credit Reporting,” Possible Finance not only provides loans but also reports on-time payments to major credit bureaus. This program helps users establish a positive credit history, leading to improved loan terms and lower interest rates in the future.
4. Credit Building Features
Many people struggle to access traditional loans due to limited or bad credit history. Possible Finance offers a lifeline by using alternative methods to assess creditworthiness. Through “Clarity Score,” they consider factors like a user’s bank account activity and income deposits to determine eligibility.
5. Transparent and Fair Fees
Possible Finance avoids the confusion of traditional interest rates. Instead, they have clear monthly fees that vary depending on the loan amount and state regulations. There are also no hidden charges, no late fees, or prepayment penalties – making budgeting and repayment easier for users with their clear fee structure.
Some Innovative Features That Can Give Your Loan App an Edge
Here are some features to give your loan app a competitive edge:
1. Predictive Loan Offers & AI-powered Negotiation
Don’t just pre-check eligibility; use AI to predict a user’s future financial needs and proactively suggest loan options with the best possible terms based on their unique situation. Integrate an AI assistant that negotiates interest rates with lenders on the user’s behalf, creating a truly personalized experience.
2. Financial Wellness Challenges & Social Impact Rewards
Go beyond basic education and introduce gamified financial wellness challenges. Users can compete with friends (anonymously if preferred) to complete budgeting tasks or achieve savings goals. Reward them with badges, discounts on loan interest, or even charitable donations made in their name, fostering social impact alongside financial well-being.
3. Open Banking & Cash Flow Forecasting
Partner with open banking platforms to securely connect a user’s various financial accounts. This allows for a holistic view of their finances and cash flow forecasting. The app can then predict potential shortfalls and suggest micro-loans or budgeting adjustments before an emergency arises.
4. AI-powered Credit Score Optimization & Personalized Debt Management
Use AI to analyze a user’s credit report and recommend personalized strategies to improve their score. Integrate tools for debt management, allowing users to track progress towards debt repayment and connect them with resources for debt consolidation or negotiation.
5. Early Warning System & AI-powered Risk Management
Develop an AI-powered early warning system that analyzes a user’s financial data and predicts potential late payments. Offer personalized intervention strategies like payment reminders or temporary limit adjustments to avoid defaults. This can also be used for risk management on the lender side, allowing for responsible lending practices.
6. Freelancer Marketplace & Income Verification
Create a built-in marketplace where users with verified income (through the app) can connect with potential clients for freelance work. This can create a consistent income source for individuals with varying earnings and offer an alternative way to verify data for loan requests.
7. AI-powered Portfolio Management & Investment Automation
For users with a strong repayment history, offer AI-powered portfolio management tools. This could involve suggesting micro-investments based on their risk tolerance and financial goals. Integrate automated investment options to help users build wealth alongside managing their loans.
How to Develop a Loan App Like Posible Finance?
Here’s a roadmap for developing a loan app similar to Possible Finance,
1. User-Centric Design
Creating a user-friendly design is paramount. The app should be intuitive, allowing people to navigate and access features easily. Clear visuals and straightforward instructions enhance the user experience, making the loan application process seamless. Focus on a simple, clean interface that caters to users’ needs and preferences.
2. Lending Software Development
Partnering with a dedicated lending software development company ensures the creation of a robust lending platform. Such companies provide automated loan processing, risk assessment tools, and comprehensive reporting, ensuring compliance with relevant regulations and standards.
3. Credit Reporting Integration
An essential feature of Possible Finance is its ability to report on-time payments to major credit bureaus. This helps users build their credit history, a crucial aspect for those looking to improve their financial standing. Integrating a credit reporting system within the app ensures that users’ positive financial behaviors are recognized, potentially boosting their credit scores over time.
4. Choosing the Right Development Framework
Selecting the appropriate development framework is crucial for the success of the loan app. Custom Ruby on Rails development services are recommended due to Ruby on Rails’ scalability, security features, and rapid development capabilities. This framework offers a robust ecosystem to handle complex financial transactions and secure user data efficiently.
5. Integration with Financial Services
Integrating with trusted financial services like Plaid, Yodlee, and Codat enhances the app’s functionality. These integrations allow for secure access to users’ financial data, facilitating seamless loan processing and risk assessment. Trusted by leading companies, these services ensure the app meets industry standards.
6. Regulatory Compliance
Ensuring the app complies with financial regulations and standards across different states is paramount. Possible Finance operates within the legal frameworks governing financial services, which vary by location. Developing a loan app requires a thorough understanding of these regulations and integrating compliance checks within the app to avoid legal issues and maintain user trust.
7. Continuous Improvement and Support
Maintaining the app with regular updates and support is crucial. Implementing user feedback, updating security protocols, and enhancing features ensure the app remains relevant and reliable. Providing robust customer support builds trust and encourages user retention.
What is the Cost of Developing a Loan app like Possible Finance?
Here’s a detailed breakdown of the cost ranges for developing a loan app like Possible Finance,
| Category | Cost Range | Details |
| Research & Planning | $750 – $7,500 | – Competitor analysis and target user research: $3,000 – $5,000 |
| – Initial regulatory compliance research: $2,000 – $2,500 | ||
| Design (15%) | $1,500 – $15,000 | – Clean and user-friendly UI: $7,500 – $10,000 |
| – Simpler UX design for initial launch: $500 – $5,000 | ||
| Front-End Development | $2,500 – $25,000 | – Mobile app development (Android or iOS): $20,000 – $22,500 |
| – Integration with third-party services: $2,500 – $5,000 | ||
| Back-End Development | $3,500 – $35,000 | – Secure database for user and loan information: $5,000 – $10,000 |
| – Security measures for data protection: $10,000 – $15,000 | ||
| – Core loan processing system: $10,000 – $15,000 | ||
| App Features (15%) | $1,500 – $15,000 | – Loan Application & Approval: $5,000 – $10,000 |
| – Secure Payment Processing: $3,000 – $5,000 | ||
| – Basic credit score information: $0 – $2,000 | ||
| – Educational resources (e.g., blog posts, FAQs): $0 | ||
| Testing & Deployment | $250 – $2,500 | – Quality Assurance (QA) testing: $2,000 – $2,500 |
| – App store submission fees: $100 – $200 | ||
| Total Estimated Cost | $10,000 – $100,000 |
Developing a fintech application like Possible Finance presents exciting possibilities for financial inclusion. However, certain features unique to these apps bring distinct cost considerations:
Alternative Credit Scoring
Unlike traditional loan apps relying solely on credit scores, Possible Finance considers factors like bank account activity and income deposits. Building a custom algorithm or leveraging Machine Learning models to analyze this non-traditional data requires specialized expertise. The complexity of the model, the amount of training data needed, and ongoing maintenance can significantly inflate costs compared to standard credit score integrations.
Fast Application & Approvals with Third-Party Integrations
Possible Finance boasts rapid loan approvals. This often involves integrating with bank APIs or third-party verification services to streamline data verification. The number of integrations needed, the complexity of data exchange between these services and your app, and potential licensing fees from third-party providers can all contribute to higher development costs.
Flexible Repayment with Grace Periods
Possible Finance offers flexible repayment options with built-in grace periods. This necessitates a back-end system that can manage various repayment schedules and automatically adjust due dates. Building such a system with microservices architecture for modularity can add complexity and cost compared to simpler, fixed repayment structures.
Secure Credit Bureau Reporting
A key feature for users building credit history is the ability for on-time payments to be reported to credit bureaus. Establishing secure connections with credit bureaus like TransUnion and Experian adds another layer of complexity to the development process. Ensuring data security protocols and potentially navigating fees associated with credit bureau reporting can contribute to unique cost considerations in loan app development.
Tech Stack Required to Develop a Loan App Like Possible Finance
`Possible Finance leverages several technological components to create its unique financial offering. Here’s a breakdown of the tech stack and technical qualities that contribute to its distinctiveness:
1. Mobile App Technology
Possible Finance leverages robust mobile app technology to ensure accessibility across both iOS and Android platforms. By likely utilizing frameworks such as React Native or Flutter, the app can deliver a seamless cross-platform experience. This approach not only speeds up the development process but also ensures consistent performance across various devices, providing users with a smooth and reliable interface.
2. Backend Infrastructure
The backend infrastructure of Possible Finance is built on cloud computing services like AWS or Google Cloud Platform. This choice allows the app to handle large volumes of data efficiently and scale according to user demand. Additionally, incorporating a serverless architecture helps manage specific tasks without the need for maintaining physical servers, which leads to cost efficiency and enhanced scalability.
3. Data Management
Possible Finance uses a combination of SQL databases (such as PostgreSQL or MySQL) and NoSQL databases (like MongoDB) for comprehensive data management. SQL databases are crucial for managing structured user data and transaction records, while NoSQL databases provide flexibility in handling unstructured data and support scalability. To ensure the security and privacy of user data, the app employs advanced data encryption protocols.
4. Credit Assessment Technology
A standout feature of Possible Finance is its alternative credit scoring system. The app goes beyond traditional credit scores by analyzing bank account balances, income deposits, and transaction histories through services like Clarity. Additionally, machine learning algorithms are implemented to assess credit risk, predict user behavior, and offer personalized financial products. This innovative approach allows the app to cater to a broader audience, including those with limited credit history.
5. Integration with Credit Bureaus
Possible Finance integrates with major credit bureaus such as TransUnion and Experian via APIs. This integration enables the app to report on-time payments, which helps users build their credit history. Real-time data synchronization with credit bureaus ensures accurate and timely reporting, enhancing the app’s reliability and user trust.
6. User Experience and Design
The app places a strong emphasis on user experience and design. A user-friendly interface with intuitive navigation simplifies the loan application and management process. Accessibility features are also implemented to cater to a diverse user base, ensuring inclusivity and a positive user experience for all.
7. Payment Processing
For secure transactions and fund transfers, Possible Finance integrates with payment gateways like Stripe or PayPal. These integrations facilitate instant transfers, allowing users to receive funds rapidly. Partnerships with financial institutions and payment processors further enhance the speed and reliability of fund disbursement, making the app highly efficient in handling financial transactions.
What You Should Keep in Mind Before Loan App Development?
Before developing a loan app, it’s crucial to address several key considerations to ensure legal compliance, financial accuracy, and seamless integration. Here’s a quick overview of what to keep in mind:
| Aspect | Details |
| Legal Expertise | Employ a skilled lawyer to handle legal issues and ensure compliance with all necessary regulations. |
| Financial Specialists | Engage experienced financial experts to oversee policies and procedures, ensuring compliance and mitigating risks. |
| Loan Agreement | Create a detailed loan agreement that complies with regulatory standards and clearly outlines terms for users. |
| Bank Partnerships | Collaborate with one or more banks to manage funds and address loan product issues, benefiting from established compliance procedures. |
| Compliance with Laws | Ensure adherence to local and international laws, especially if targeting a global audience, by addressing all legal requirements during development. |
| Multiple Integrations | Design the app to integrate seamlessly with third-party solutions, such as payment systems, wallets, and banking providers, ensuring scalability for various API integrations. |
What Technologies Can Make Your Loan App Stand Out?
Creating a loan application that stands out from the crowd, like Possible Finance, requires strategic integration of innovative technologies. Here are some key areas where technology can help your loan app to capture market share:
1. AI-powered Credit Scoring and Risk Assessment
Traditional credit scoring relies heavily on a borrower’s credit history, often excluding individuals with limited credit or those who rely on alternative forms of income. By leveraging AI and ML, your app can analyze a better range of data points, including bank transactions, cash flow, and even social media activity.
This allows for a more nuanced risk assessment, enabling you to approve loans for deserving borrowers, which traditional methods might overlook. A study by Delloite found that AI-powered credit scoring can increase loan approval rates by up to 15% while reducing defaults by 10%. This translates to a significant boost in your business’s profitability and opens doors to a wider customer base.
2. Open Banking and Data Aggregation
Open Banking regulations allow users to securely share their financial data from various institutions with third-party applications, like your loan app. This streamlines the application process by eliminating the need for manual data entry and verification. Additionally, it provides a more holistic view of a borrower’s financial health, enabling you to offer personalized loan options and competitive interest rates.
According to a report by Plaid, a leader in open banking technology, 72% of consumers are comfortable sharing their financial data with apps they trust. By embracing open banking, your app can build trust and convenience, fostering stronger relationships with your customers.
3. Conversational AI Chatbots and Personalized Customer Support
These days, customers expect quick and efficient communication. By incorporating conversational AI chatbots into your loan app, you can provide 24/7 customer support. This allows users to receive answers to their questions or address any issues at any time. Moreover, chatbots can also be programmed to offer personalized financial advice, such as recommending loan products or repayment strategies tailored to individual needs.
According to a study, chatbots can handle up to 30% of customer service inquiries, thus freeing up human agents to address more complex issues. Implementing conversational AI not only enhances customer satisfaction but also lowers operational costs for your business.
Conclusion
Developing a loan app like Possible Finance provides a great opportunity to help people with their finances. By offering small loans, flexible repayment options, and responsible credit reporting, your app can help individuals with their finances and give them hope for a better future. This can help build trust and loyalty among your users and create a successful business.
Additionally, the demand for alternative lending solutions is increasing, so entering this market can bring in a lot of revenue. By charging fees and earning interest on loans, your loan app can become a significant source of revenue for your company.
Looking to Develop a Loan app like Possible Finance?
At Idea Usher, we transform fintech dreams into reality. Our team boasts over 500,000 hours of coding experience crafting secure and scalable financial applications. We leverage cutting-edge technologies and our deep understanding of P2P lending to build a robust platform that seamlessly connects borrowers with lenders, all while prioritizing user experience and security. Let’s turn your vision into a groundbreaking success.
FAQs
Q1: How to create an app for loans?
A1: Launching a loan application involves a multi-step process. It starts with conducting thorough market research and identifying the target audience in order to customize the app’s features to their needs. Next, secure a team with expertise in finance, app development, and regulatory compliance. They will craft a user-friendly interface and ensure your app meets legal requirements. After development, rigorous testing is crucial before launch to guarantee a smooth user experience. Finally, focus on user acquisition and building trust to establish your loan app in a competitive market.
Q2: How much does it cost to develop a loan lending app?
A2: The expense of developing a loan lending app hinges on its complexity. A bare-bones app with essential features will take less time and resources to build compared to a feature-rich platform with advanced security measures. To get an accurate estimate, clearly define the functionalities you envision for your app. Factors like developer location and chosen technology will also influence the overall cost.
Q3: How do money-lending apps make money?
Money lending apps typically generate revenue through fees charged to borrowers. These can include origination fees for processing the loan application, interest on the loaned amount, and late payment penalties. Some apps may also employ a subscription model for premium features or prioritize loan applications for a fee. By facilitating these transactions and managing risk, money lending apps act as financial intermediaries, earning income on the loans they help originate.
Q4: How long does it take to develop a Loan app?
A4: The development timeline for a loan app can vary greatly depending on complexity. A basic loan app with core functionalities might take around four months to build, while a feature-rich platform with intricate security measures could take up to a year. Considering factors like team size, regulatory hurdles, and desired features will influence the overall development timeframe.
