With all that lenders have on their plate -- including cash flow, checking loan eligibility and ensuring that their loans are paid in full by the end of the term -- it's true that lenders need a comprehensive suite of tools to help them manage their business. Whether it's to help check a customer's eligibility or the disbursement of funds, it all takes time, and trying to do it all manually is no way to grow your business.
After all, there's only so much time in the day, and hiring a team full of agents is one way to squander all those profits if you're trying to step up to the next level. What you and your business need is a loan management system. It can help simplify the entire loan process, from eligibility and approval to the disbursement of funds and those final payments.
That's because most lending businesses and their systems are rife with complexity that makes it hard to scale and get everything that needs to be done, done. With more customers comes a complexity in the loan management process, especially as your business grows. That's because with more loans to service, there's more to do. And each customer's terms and payment dates are yet another set of things that require increased attention.
A loan management system helps sort out all those particulars before they become too complex to manage, and that allows you to spend less time and money while all the checks and balances are managed by the loan management system architecture. Indeed, with the power of automation and machine learning, a loan management system can even help you reduce your risk while also cutting your expenditures and making the day-to-day management of your business much simpler.
What Is a Loan Management System?
By helping you automate much of the loan lifecycle, a loan management system can be a simple tool that you use to help manage your business -- or a trusted partner that you can use to grow your business while spending less time and money on the management of it all. From helping you process new customers and loans to creating statements and reports for your existing clients, a loan management system just makes everything easier.
Compared to legacy loan systems, today's loan management software isn't just a way to enter data into a computer -- it's a whole new way to do business. They're great at single tasks such as helping you track payments and reviewing applications, but the real benefit is when you leverage a loan management system to subsidize or entirely replace the manual aspects of your business. Aside from reducing errors, loan management software frees up your resources for a better use of that time and money, and that can mean more profits and a more successful lending business.
How a Loan Management System Can Help
Due to the scalability of loan management software, you can use a loan management system to manage your loans from eligibility down to that last payment. They're also great when it comes to tracking your loans, helping you chase down delinquent payments or to give a customer a rundown of their account history if they're so inclined. Here are some other ways that a loan management system can help.
- Loan Origination
When a new customer comes to you and wants a loan, that usually means collecting their financial documents and reviewing it all for any red flags that may prevent them from being able to pay back their loan. Because of the time that it takes to review all those documents, it's often a strain on resources to get those loans reviewed and a decision rendered. With a loan management system, however, you'll be able to immediately lookup credit scores and other associated financial information without asking for a mountain of paperwork up front. That can help streamline the approval process and reduce the time that it takes to judge each and every loan.
- Loan Servicing
All those loans that you're creating still need to be serviced. But because each loan is different -- with different interest rates and timelines -- it's hard to apply some kind of one-size-fits-all approach that can help you service those loans for the days, weeks and months that they're active. A loan management system, on the other hand, allows you to calculate all the important figures, deadlines and fees on the fly -- even sending out notices for upcoming payments and more.
- Debt Collection
It goes without saying that collecting funds on the back side of a loan is paramount if a lending business is going to stay in business for very long. But unless you know when those loans are due and whether payments have come in, there could be a vast chasm between what you need to do and what you're able to do with the time and money you have allotted. With a loan management system, you'll get the ability to automatically stay on top of all those different accounts and the different stages of maturation that they're all in -- even late fees are a cinch when you're able to automatically calculate them and send them off without logging in.
- Reporting and Analytics
Most lenders have a hard enough time staying on top of their cash flow, much less the reporting that can help create a better understanding of how your business is doing. But the problem with not knowing is that you could be making poor decisions that you'd never make if you had a grasp of the big picture. A loan management system allows you to do just that. When easy reports that can be generated with just a few button clicks, you'll be able to arm yourself with the information that has a real impact on the bottom line of your business.
Manage All Your Loans With Loan Management Software
It's likely that you're already managing all types of loans for your lending business. From different loan products to the varying timelines and details associated with each loan, there's a lot to consider. There are also different profiles of customers that you're likely dealing with, all with different needs and concerns during the lifecycle of a given loan. Even if you're lending primarily one type of loan product to one type of audience, you'll find that no two loans are exactly the same.
Collecting on one could be a cinch while on others you could be in for a lot of problematic back and forth. Loan management software makes lending easier while providing the best service to the customer. That may make them choose you the next time they have a loan need, and it may also help you collect those funds at the end of the day because everything's so straightforward and transparent and you can skip the lag of mailing paperwork and waiting on a response.
During the loan application process, a loan management system can also make it easier to screen applicants and onboard new customers without resorting to a phone call or some kind of physical interaction. That means more customers and more sales while decreasing the complexity and associated scope of work, all while enhancing the customer experience and increasing your ability to lock in those repeat customers.
More Benefits of Loan Management Software
At its most basic, a loan management system is about automating all those tedious manual tasks that keep you from growing your business. By streamlining your entire lending process, loan management software helps you create a workflow that works for your customers and your business. Instead of not knowing where your money is coming and going, the right system can enhance your understanding of your entire revenue stream and all the things that impact your business, easily informing you of where it may be best to cut costs and where to double down.
A loan management system can also help you go paperless, reducing the money you're spending on printing and mailing those contracts and account statements. The system itself can manage much of it for you, and it also means no paperwork to manually review and a reduction in the paper that your business consumes on a day-to-day basis. If you've ever thought about reducing waste, a loan management system is a great place to start.
Evaluating Your Lending Needs
While lending startups and smaller lending businesses can certainly benefit from the efficiency of a loan management system as they may not yet have the resources to ensure that everything gets done, it's the larger lenders that can benefit even more from a refined loan management process.
Instead of allowing those outdated loan processes that may have been established years ago to define how you're doing business today, a loan management system can help bring your processes into the modern age -- with all the efficiencies that the digital age and automation can provide. But rather than sticking it out with those outdated policies that are likely negatively affecting your business, you can revamp your lending business with just one simple integration.
Infinity is the answer. It's a flexible loan management software suite that was specifically designed for the short-term lending industry. Some call it the best loan management system out there, but we're just focused on building a true, all-in-one loan management system that does exactly what alternative credit lenders need. Schedule a demo today!