Loan software for lenders is a new kind of technology that enables your office to manage your loan portfolio more effectively. It helps in tracking the loan portfolio, analyzing loan risk, and planning for loan repayment. Most lending institutions are implementing loan software for lenders for managing the loan portfolio, which include personal loans, car loans, home equity loans, business loans, and education loans. Lenders can keep track of a borrower’s payment history, credit report, assets, liabilities, and income data with the help of loan software for lenders.
Lending management software is designed to assist borrowers to plan their monthly budget and repayments with ease. It contains all the necessary tools to conduct loan processes such as electronic statements, loan quotes, loan payment reminders, and much more. Loan software for lenders works by enabling the borrower to access information regarding different types of loans and financial products from the lender. The data obtained through this software helps in analyzing loan risks and managing loans accordingly. This software also helps in collecting loan payment history data.
Loan software for lenders has automated processes that make the work easier. The main components of the software work flow include electronic statements, workflows, and collections. Electronic statements are generated at each stage of processing a loan. Workflows include processes like processing loan applications, modifying loan terms, collecting loan payment information, and creating customer reports. Collections process is used to collect overdue or past due loans from customers.
Automated processes make loan software for lenders an ideal solution for your organization. Workflows load statements and other documents into digital formats, which are then printed at the location of the borrower. Once printed, they can be easily added to the digital collection of loan statements. Workflows load and manage multiple loans from a single location. They also allow multiple loan applications and payments to be processed simultaneously.
The lifecycle of loan software for lenders is comprised of three major elements. The first element is application integration. Application integration means that all aspects of your loan management system are compatible with one another. Integration usually refers to integration of your processing software with your origination application. The second element is servicing.
Under the servicing element of loan software for lenders, it enables the lender to take manual action for some processing functions. Processing actions include loan approval and payments. Workflow processes include workflow processes for sending documents to customers, sending electronic orders, generating loan reports, and sending information to collection agencies. The third element is lifecycle management. Longevity management deals with maintaining proper inventory levels and recordkeeping.
The typical underwriting or loan software provides comprehensive reporting functions. It will usually provide reports such as delinquency rates, loan balances, and loan repayment schedules. The reports can be customized by the lender according to borrower characteristics. The loan underwriting reports can also include loan type, borrower profile, lender demographic, geographic area, loan-to-value ratio, and total number of loaned items. The loan software for lenders can also be used for loan appraisal and loan cost analysis.
For lenders who are still using manual processes for loan origination, automation can be helpful. The loan management software is usually designed to provide process automation or ALO for the loan processing functions. This is sometimes referred to as “task automation”. It uses tasks such as task-relevant loops, workstations that perform different tasks simultaneously, work scheduling, resource allocation, and process abstraction.
A typical loan software will have various options for analytics. One option is to integrate the software with third party applications such as vendor based accounting systems and vehicle financial software, which will automatically collate the borrower’s credit and lease data into a single source of information. Another option is for the lender to directly access the analytics via a portal or application interface. Some lenders may use the portal or application interface to simply view the raw loan data and some may use the portal or application to manipulate and analyze the data.
Mortgage processors can also use analytics to improve their underwriting and loan approval capabilities. Using analytic software enables lenders to determine which areas of the application process may need further review and which may not. Lenders will be able to determine which areas of the underwriting process need more time and attention before submitting a borrower for financing. The lender will also be able to determine which areas may need more thorough review and correction prior to submitting a lease for a vehicle. In addition, analytics can enable the underwriter to make adjustments to the loan application based upon the potential borrower’s credit history and presentability in leasing a vehicle.
Loan management software solutions can improve the borrower’s quality and efficiency of life while lowering overall delinquency rates and streamlining collections. Lenders will no longer have to manually check each and every piece of financial data relating to the borrower and their vehicles. Instead, data will be automatically collated into a single source of pertinent information for analysis. This makes the borrower’s payment history much more useful in terms of budgeting and overall financing decisions. The lifecycle of these loan software solutions continue to increase as the size of the loan portfolio continues to grow.