Best Loan Servicing Software
Featured Loan Servicing Software At A Glance
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2,980 Twitter followers
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26,521 Twitter followers
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Learn More About Loan Servicing Software
What is Loan Servicing Software?
Loan servicing software is vital to lenders’ operations. This software is typically used in conjunction with loan origination software, but also offered as a stand-alone piece of software. Loan servicing software handles all loan activity after funds are distributed to the borrower. Loan servicing software automates loan servicing activities, including notifying borrowers of payments due, collecting payments, and dealing with any customer information updates.
Key Benefits of Loan Servicing Software
- Improve customer satisfaction and experience
- Enhance lenders’ efficiency by leveraging AI and automation
- Improve profitability
- Reduce servicing costs
Why Use Loan Servicing Software?
For lenders in the digital age, a loan servicing system is not just nice to have, it’s a necessity. Loan servicing systems, when coupled with a good loan origination tool, provide lenders a comprehensive system to manage the entire lending process from end to end. Lenders use loan servicing systems to be more efficient, profitable, and deal with customers more effectively. High customer satisfaction will always be vital to customer retention and acquisition, particularly in the digital age. Of course, all the tech in the world won’t make up for poor rates, but in a field of similar rates, a well curated digital experience can be the difference between competitors. Loan servicing software helps automate large portions of the loan management process. This includes everything from handling payments, sending messages to borrowers, dealing with multiple currencies and payment types, and creating workflows to improve the process.
Efficiency — Loan servicing software allows lenders to automate many administrative tasks that loan management requires. These tasks include payment reminders, administering penalties and fees, and accurately recording relevant information. Eliminating the need for human agents makes business more efficient and reduces many of the costs associated with running a lending business.
Consolidation — Comprehensive loan management software consolidates loan related information into a single system. Retaining a single record where all loan related activity is deposited, including client information, is a boon for businesses. This software helps ensure the correct transfer of information, and eliminates discrepancies between systems, as long as the information is recorded correctly.
Tracking — Loan servicing software allows users to track payments, collateral, statements, and more. Depending on the depth of functionality in the specific product, loan servicing solutions sometimes offer customized workflows for payment application options, multicurrency reconciliation, amortized fee schedules, and more.
Who Uses Loan Servicing Software?
Any organization that lends money can use a loan servicing system, but there are a few major types of lenders that use these solutions. The primary users of loan servicing systems are direct lenders, typically banks and credit unions, that loan money directly to the borrower. They are responsible for the distribution and collection of the loans, and must maintain meticulous records of all the active loans they have.
Loan Servicing Software Features
Loan servicing software may include, but is not limited to, the following features:
Payment management — Loan servicing solutions all include payment management capabilities. Payment management capabilities allow lenders to collect on the loans they’ve extended.
Analytics — Many of these solutions provide lenders with built-in analytics tools. These tools give lenders insight into repayment rates, client-lender interactions, and more. Many solutions contain customizable analytics features as well.
Messaging — Loan servicing solutions contain messaging functionality so lenders can communicate with borrowers via SMS, email, and other channels. This feature helps lenders ensure they are contacting the correct borrower. This is important to maintain the privacy of sensitive borrower information.
Client management — This feature gives users the ability to manage client relationships within the tool. This includes client information and credit bureau information to help lenders determine a borrower’s credit-worthiness, and more.
Client portal — Many tools offer a built-in portal for clients to upload important documents for application review, change information, and make payments.
Reporting — Most solutions have built-in reporting functionality. This helps lenders gain insight into their business’s efficiency and effectiveness.
Automation — Like many other types of software, loan servicing software helps automate a variety of tasks. This tool helps flag potential upsells, track interactions between borrower and lender, and send push reminders to borrowers.
Workflow management — Every business has a slightly different workflow that works best for them. This software allows users to build workflows within the tool.
