Do you remember the times when loan applications took ages to complete? The paperwork, emails, telephone calls, and approval decisions took valuable time where you could have focused on more important things like growing your business and becoming more profitable. Also, customers would much rather be doing something enjoyable than be bogged down by requests for documents, IDs, and answering emails.
Fortunately, times have changed, and many businesses are moving to using loan origination software. It allows them to streamline their lending lifecycle and make the entire process more efficient and productive. This leads not only to better businesses, but also happier and returning customers.
So, isn’t it time you let go of the paperwork and the hours spent on loan applications and start using loan origination software? If it is, read on and you’ll get some insight on loan origination software and what it can mean for your business.
What Is Loan Origination Software?
Loan origination software goes a long way in allowing you to improve your customers’ lending experience. With it you can centrally manage and automate different stages of the loan servicing cycle. This means no more unnecessary paperwork on your side. It also means no more hard copies or emails outside the platform.
The loan application, document verification, and credit approval are all digital. Everything is done on the platform, from the completion of the application form, submission of customer documents, and even the approval.
For instance, during the loan application process, you can add the customer’s details such as income and credit history on the system. The system will allow the customer to submit any documents for verification purposes, and the system will handle the underwriting and approval.
This allows you to speed up the process, get approvals faster, and improve your customer service.
Features of Loan Origination Software
Depending on the software used, the features may differ. Most, if not all, however, have some common features. Here are some of the common features available in most well-known loan origination software packages.
The software allows you to manage all your loan portfolios from a central location. You know how many accounts a customer has and how much they owe you. You can see where your risks are and manage them accordingly.
From the dashboard, you can easily capture and review customer applications. It further allows you or your customers to choose and apply for the right loan according to their needs and scoring.
The software allows you to create a central repository of documents and files that include loan applications, customer income reports, and identity verification documents.
You can set your own custom loan approval rules to quickly and accurately evaluate your customer’s ability to pay. This allows you to make faster and more accurate decisions about your customer’s creditworthiness.
Once a loan is approved, you can track all disbursements made to the customer, whether it’s payments by way of online payment gateways, wire transfer, or check.
You can capture and access details not only of new customers, but also existing customers and new leads in a central location.
Billing and Invoicing
You can generate invoices for any loans and payments made by clients and share them automatically by email or SMS.
How Loan Origination Software Benefits Lenders
Now, it’s easy to understand how loan origination software can help businesses in their lending lifecycle. Some of the benefits of using loan origination software are:
- Better customer experience. Traditional loan applications can take a lot of time. By simplifying the process, it’s faster and more convenient, and customers end up happier.
- Improved accuracy. Mistakes lead to delays in the process. Having all data in a centralized location cuts out mistakes and results in faster processing and improved accuracy.
- Better productivity. With a simpler process from start to finish, with no more misplaced paperwork, it’s more productive.
- Better decision making. By making custom rules, applications will not only be approved quicker, but also more accurately. With set rules, there’s no room for intuition, deviation, or manual decision making.
- Better fraud detection. Loan origination software reduces the probability of loss or fraud by using predictive analytics.
- Consistent workflow. The software streamlines the complete lending lifecycle, from document collection and data entry to processing.
- Compliance. Lenders have to comply with lending regulations. Loan origination software makes this simple by making the management of terms and conditions easier and by ensuring quality and consistency through the entire process.
- Analytics. With analytics, you can track the efficiency and performance of the lending process and determine where you need to improve. By improving efficiency and performance, you can ultimately be more profitable.
- No paperwork. Paperwork may be the biggest problem in the lending lifecycle. It’s clumsy and it takes a lot of time. By eliminating paperwork, the process is more efficient and productive.
- Saving costs. The software eliminates repetitive and redundant processes and, in the end, saves time and money.
Is Loan Origination Software Secure?
With going digital and dealing with customer data comes the inevitable risks relating to data security. It’s therefore vital that loan origination software is as secure as possible.
It should have features like:
- Multi-factor authentication
- Secure and encrypted data storage
- Sensitive data protection
- Frequent updates of its security technologies
If it has all these features, it is likely secure and will protect customer data, while also reducing your risks during the lending lifecycle.
How Much Does Loan Origination Software Cost?
This is a tricky question to answer because there are so many products available. What complicates it even more is that each has its own pricing model, whether it’s a once off fee, a monthly subscription model, or a licensing model.
The simple answer is that you should weigh up all the options and find a product with the features and pricing suitable to your business model.
Isn’t It Time?
With all things considered, isn’t it time you tried loan origination software so that you too can enjoy all the benefits it offers?
Financial Network, Inc. has been building flexible loan origination technology for America’s financial institutions for over 30 years. Insight and experience leads to the launch of a loan origination and decisioning platform focused on lender growth and autonomy. The mobile-first FNI Blueprint™ LOS, paired with the FNI DecisionCore™ decisioning platform makes up the lender’s ultimate toolkit for contactless loan origination, decision testing, and strategy implementation. If you’re interested in learning how contactless lending can help level-up your workflow, talk to a lending technology expert today.