The world of technology keeps getting more advanced and sophisticated as our society progresses. No matter the industry in which technology is used, automation is an unavoidable component of the businesses of the future.
But what does automation mean for your lending process, and how does it streamline it? What loan provider should you use? Should you even automate your lending process to make the process easier?
What is involved in loan processing?
If you are unfamiliar with loan processing, you might be wondering why automation would even be a consideration or thought. The truth is that loan processing requires a lot of steps that can pile up and overwhelm a team of employees. Loan servicing software like those from LoanPro (https://www.loanpro.io/loan-servicing-software/) is designed to make parts of this process hands-free for employees.
First and foremost, customer management is a huge process that you need to stay on top of. Manual processing puts all your customers’ files on paper, making it easy to get swamped by paperwork.
From IDs to credit score documents, there’s a lot of organizing and filing you need to do before you can even begin to analyze the data.
Credit report analysis
After gathering all the information, you need to analyze each customer’s credit before approving a loan. Not many loan processors do this manually because it gets time-consuming very quickly.
There is software available that can crunch the numbers for you, but these are often separate from the rest of the process and other helpful software.
Once you analyze all of that information, you finally need to decide whether the borrower would pose any risk to your business, which involves a lot of extracting data and mapping out financials to determine if the borrower is a good person to lend to.
This step pulls together a lot of information from previous efforts, which is a big pile of papers if you process loans manually.
Verifying income can often be the deciding factor on whether you approve a loan for a customer. They have to be able to pay off the loan after all, which gets factored into your decision to approve a loan.
Different loan services might have other policies for this step and offer deals for borrowers with higher credit scores.
Final review and approval
After reviewing all of the details above, you need to process the loan, which takes time finally. However, that period will vary depending on the type of loan you process and an individual’s credit score.
Automating the loan process
With all of this paperwork and information to review, it’s no surprise that lending services need all the help they can get. Manual or paper-based procedures are out of sync with the digital age and take more time to process.
Borrowers want to use services that work with the speed and ease of other online services, and lending software does just that.
The benefits of automating your lending process
When you use lending software, you give yourself, your employees, and your borrowers some breathing room. Here are some of the benefits of automating your lending processes:
All of your data in one place
The most important thing about lending software is that it keeps all of your information in one place. Some automated software programs work independently, but others have a comprehensive dashboard that holds everything together and organized.
These programs also make it a point to keep your dashboard as up-to-date as possible. Often, this also involves flagging items for you and reminding you about gaps in a borrower’s profile. When it does this, it frees you from having to manually flag items to review or carefully track down information that you need to follow up on.
Producing higher quality work
The loan processing steps detailed above may sound simple on paper, but the reality is more complicated. Most likely, you’ll have several borrowers to review information on, all at different stages in the process, with different needs and procedures to follow.
Loan processors have to look through hundreds of documents and files when relying on paper-based processing. On top of that, they also keep track of in-person or over-the-phone interactions that are just as important.
Doing this can be overwhelming and opens up the process to errors and unreliable results. Instead, automated software consistently reviews your data, which gives you more reliable and accurate results.
Built-in fraud detection
Automated lending software is also geared towards detecting fraud attempts. If you’re familiar with browser add-ons and extensions, you know that they’re accommodating at protecting your private information.
They do this by noticing irregularities in your activity and sending you alerts about them. Most likely, they ask you to confirm your identity before you continue.
Lending software functions similarly and alerts you when it notices irregularities in your data, which is especially important because you can have dozens of documents with the same information on them.
A person might overlook a couple of discrepancies across the stack, but the software will hone in and automatically bring it to your attention.
Faster processing times
Perhaps the most crucial benefit to your borrowers is the faster processing speeds that lending software can provide. The technology runs 24/7, so it reviews all your data even when you’re not in front of it.
As a result, you can bring down your overall processing time and reduce the time you have to spend sifting through the information for each borrower.
In addition, faster processing times mean you can finish more work with lending software, which becomes especially important to lenders during peak seasons since you ultimately generate more business.
So, should you automate your lending process? If you’re looking to make your business as efficient as possible, then the answer is yes.
There’s a reason lenders take advantage of service providers like LoanPro, making their loan origination and management more effortless. Automated lending software is an excellent tool for moving your business into the digital age and improving efficiency.