Published on December 13th, 2019 | by Sunit Nandi0
What is Loan Origination Software – Pros and Cons
Loan Origination is a tool for organizing effective sales of bank loan products. High-quality customer service at the point of sale, along with the low cost of opening them for the bank, makes Loan Origination the best solution for financial institutions.
The Loan Origination solution is designed to organize customer service: from the moment you contact the bank for advice until the loan is issued, and in combination with the Debt Collection (a separate solution from the CMA), until the full repayment.
By automating the business process of considering a loan application, employee productivity is increased. This allows you to reduce the time of its consideration and increase the speed of back links, customer service while maintaining effective manageability. Integration with external BKIs, solvency assessment systems and other sources of information reduces the likelihood of operational errors. It minimizes the influence of the subjective factor in making credit decisions, thereby reducing the probability of default on loan and improving the quality of the organization’s loan portfolio.
Customizable loan application review process – is an adaptation to the requirements of business units: priority, composition, terms of work.
Some features of the system
Scanning of documents – the system allows you to work with paper documents and, without leaving the system interface, scan and save electronic copies of documents or attach ready-made files. In order to increase the speed of service, support for scanners with an automatic document feeder (ADF) is implemented.
Loan calculator – is a tool for calculating the solvency of a client based on personal data, the financial situation of the borrower, and the terms of the loan program. As a result of the calculation, a preliminary payment schedule is created that takes into account payments of the primary debt, interest, commissions, and fees to third parties: insurance premiums, notary services, appraisers, etc.
The list of documents is a tool that facilitates the accounting of documents provided by the borrower and allows you to configure a package of documents and control its provision at various stages of the lending process.
Requests and checks in external systems – Loan Origination supports the application for credit history at CCCH, Experian Interfax, NBCH, Global Payments.
Workflow management – allows the manager to monitor the progress of tasks distributed by executors (groups of executors), quickly manage the load on the executors, and manage the efficiency of their unit.
The existing functionality of the system, together with other CMA modules – Retail HUB & Debt Collection – allows you to use it to solve microfinance problems.
Pros & Cons
The pros of using Loan Origination Software are:
- A large number of customers;
- Financial strength;
- Well-established support services.
The cons of using Loan Origination Software are:
- Loan origination systems of set up market share leaders might be founded on obsolete innovation, a blend of software items gained and ineffectively coordinated, or cash cow products that have no guide for upgrades.
- A market share report infrequently incorporates all the applicable sellers
- Fintech trailblazers are conveying usefulness, for example, misrepresentation examination, credit strategies dependent on AI, and vehicle valuation benefits that can be effectively coordinated with cloud-based loan origination systems.