Getting started with a new business is always exciting; however, obtaining the funding to induce your startup off the bottom is often disagreeable. Now here the question that arises is how to choose a loan origination software for your business? It’s quite confusing isn’t it don’t worry we are here to help you out with this. Our article going to cover all the important things that you need to keep in your mind while choosing a loan origination software and by the end of this article you will simply get the answer to your question i.e. a way to opt for a loan origination sotfware for your business.
What is Loan Origination Software?
Loan origination is that method by which a recipient applies for a loan, and an investor processes that application. Origination typically includes all the steps from initiating an application up to rejection of it. Based on loan types the origination process varies. For example, the process of taking a loan from the bank is different as compared to the process of taking a loan from other.
Whenever we talk about loan origination the first step that comes to our mind is pre-screening or pre-qualification, here the lender checks the eligibility of the borrower and determines their authenticity for a particular loan they are demanding. To get the loan the borrower is needed to submit identity proof documents to lenders to get the loans.
The documents consist of the following –
- ID proof like Aadhaar card or any government-issued ID
- Employment Status / Salary Slips
- Bank statement or previous loan statements etc.
Once the documents are submitted by the borrower the lender will crosscheck the documents. That means they will verify whether the documents are original or forged. Once the documentation process is been completed the lender will then disburse the loan amount.
Let’s now focus on the area where a loan origination software can help. A Loan Origination Software (LOS) is a software or set of multiple software that is built to support the loan application and its processes. It saves time, improves efficiencies, and reduces risks in lending.
There are different areas where LOS is been used like –
- Credit analysis
- Portfolio risk management
- Self-serve application forms etc.
Now, organizations are switching to the digital transformation process of loans. A loan origination software not only improves workflow and customer experience but also reduces debt collection risk. Organizations that are been working over this system or adopting it has a higher chance to increase their profit margins.
What features to look for?
Conditional Workflow
The most important thing you have to look for in an loan origination solution is the workflow. Platform supporting conditional workflow gives you the flexibility to change your customer onboarding flow anytime based upon your internal company processes.
Conditional Workflow not only saves time but also money because with this feature you’re allowed to work on your own rather paying hefty custom development charges with changing business needs.
UI Design
Whenever we talk about UI design the first thing that comes to our mind is a beautiful layout of something. UI design refers to graphical user interfaces and other forms. So, while looking out for the loan origination software you also need to check whether the platform provides you the flexibility of changing UI layouts.
Features to look for –
- Feature to define custom theme
- UI should also be enjoyable and clean
- UI should communicate brand values and reinforce users’ trust.
Automated KYC/ Document Analysis
To ease you’re the credit decisioning process and for the fast loan approvals you should look for the automated KYC feature while choosing the loan origination solution.
Implementation of automated KYC (Know Your Customer) process has proved to bring revolution to corporations in the financial sector. It’s been determined that the companies which are using such technologies have exponentially increased their conversion rates of client acquisition. This technology conjointly complies with the strictest video identification security standards thus protecting financial institution against fraud.
Credit Bureau Fetch
Bureau fetch also plays an important role in the loan process. When you create a loan or a MasterCard application, the involved investor or card institution can fetch your credit report from the credit bureaus to judge your application.
Bureau fetch is the most common aspect of loan processing. Best loan onboarding software can help you in reducing risk and increasing loan processing efficiency by supporting automated bureau fetch from all major credit bureaus.
Custom Risk Modelling
Risk modelling is about quantification of risk based upon different parameters. Risk Model is specific to each business. Each NBFC or Bank has their custom risk scoring strategy that they use for defining customer risk while loan processing.
While choosing the loan onboarding solution you should also look for this feature as it will help you in configuring custom models. Risk factors can vary based upon the product that you’re offering.
Common factors for defining risk –
- ID Verification
- Customer KYC
- Customer Personal Information
- Customer Social Factors
- Customer Bureau Score
Reporting & Insights
Reporting is a most common feature that every platform has to offer. Reports give you the quick and holistic of What is going on in your business?. But what about insights, are you perceiving any information from the reports or are they just a dump of the platform entries.
As far as reporting is concerned, you can get this from any onboarding solution you may opt but this is not the only thing that is important. The most important thing is insight i.e. the view of information from the data that you gathering. So, while choosing the onboarding solution you should check if they’ve insights to offer because ultimately insights can help you in finding the gaps in your offering.
Evolving Compliance
Compliance is ever evolving procedure the same should be the case of the onboarding solution you choose. With evolving data technology governments all around the world are creating compliance law. While choosing the onboarding solution you should check with the vendor what they’ve to offer regarding compliances.
Also Read: How to : Revamp Digital client onboarding Experience
Conclusion
By the end of the article, you may get to understand the particular options required to opt for a loan onboarding solution for your business. The most important feature needed while choosing loan onboarding is conditional workflow and for that Quickboarding works best. Not only the conditional workflow but also in custom UI themes and machine-controlled KYC can help your business to remove customer onboarding barriers. As it makes the lengthy process of onboarding borrowers easy as in Quickboarding method can present itself digitally in an exceedingly quick and simple approach.
About QuickBoarding
Quickboarding on/off-boarding resolution is the best suit for onboarding automation. Its receptive use and self conjugation platform help Banks, HR Firms, property, and Insurance firms in automating completely different reasonably on/off-boarding use cases. Contact the North American nation if you would like to envision and skill a digital transformation in your business.
