Loan Management System Software also known as Loan Servicing Software for private lenders starts from the time the loan is disbursed to the borrower until the loan is paid off. Loan servicing includes sending monthly payment statements, collecting monthly payments, maintaining records of payments and balances, collecting and paying taxes and insurance (and managing escrow funds), remitting funds to the funder, credit bureau reporting, interface and sync with accounting system and following up any delinquencies. Marketplace Lenders have very little choice when it comes to loan servicing software or LMS (Loan Management Software). Most options available are either built on older technology that aren’t designed for today’s online environment or they are built on black box third party components that limits online lender’s ability to create a seamless experience from origination to servicing. LendFoundry’s Loan Servicing Software is built with that in mind, lenders can call up payment history, payment reminder, missed payments, delayed payments etc by calling these micro-services from LendFoundry’s platform.
Frequently Asked Questions
A Loan Management System Software helps in tracking and managing loans. There are a variety of loans provided by a lender be it in product offering viz. consumer loan, commercial loan, mortgage etc and within a product different loans might have different interest rates, payment dates, and more. It is difficult to track all these loans manually or using legacy systems and ensure business is on the right track.
A cloud based loan management system solves this problem by having multiple products with different parameters configured under one single setup. The system allows us to calculate interests, fees, and more. A loan management solution can also assist you in automatically collecting funds via ACH, wire transfers, credit cards, and mor
LendFoundry Loan Management Solution (LMS) helps lenders manage loan servicing digitally while offering scalability, security, speed and enhanced customer experience. Its API based design allows onboarding loans from any Loan Origination System (LOS) and serves as a system of record across multiple loan classes. You can record and track all loans, manage repayment schedules, track scheduled payments and ad-hoc payments, allocate repayments, and keep a check on delinquencies and closures. The system provides flexibility in choosing from multiple accrual methods and payment hierarchies.
The business rules engine and workflow built into the solution ensures greater regulatory compliance with faster processing time.
The typical loan life cycle in origination is application submission to disbursement.
For a loan management software, the lifecycle starts from disbursement and ends in payoff. The various function performed by a loan management system software in the loan life cycle are:
A lending management software should support multiple products for unsecured consumer and unsecured business lending typically Merchant Cash Advance or Factor based product, term loans, line of credit, portfolio based loans- used for Supply Chain Financing.
At the loan level the loan software for lenders should be capable of handling different interest accrual methods such as 30/360, Actual/Actual, equated monthly etc with multiple payment hierarchies.
Loan management software, equipped with the latest technologies, prepped with analytics and disruptive tools like AI and machine learning can get more done in a shorter time, with better accuracy than a legacy loan management system to manage in today’s date.
The features one should look for in the perfect loan management software are:
Read this article to learn more about what you should be looking for when choosing the right loan management software for your business.
Automation and cloud computing have brought in a whirlwind of change globally and the financial services industry is no exception.