Online Lenders’ Common Problems and How to Solve ThemJune 4, 2019 No Comments
Featured article by Vit Arnautov, Independent Technology Author
There was a time when you needed to visit a bank to get a commercial loan if you were not able to convince the alternative money lenders. It was very difficult for smaller businesses to get the loans that they needed. But, things have started to change a lot in the 21st century. The internet has been a boon for small businesses as it opened a new and easy way to reach plenty of customers within a short period. At the same time, the small and the medium-sized businesses can now count on the online lenders to avail the required loan to run their business. There are plenty of lenders that can be found online waiting to offer loans to deserving businesses. The online lenders have become the most sought-after alternative to any traditional bank. There is no old-school type of loans that are on offer these days. Everything is done online and both the lender and the lender are reaping the benefits of digitalization.
Bringing transparency to the business
There is no doubt that lenders need to keep track of their lending details and their sales activities. They hire employees to track these activities on spreadsheets, notebooks, bookkeeping, and calendars and it is too much of manual labor for them. Also, getting some particular information from these sales activities is a tough job. The money, time, and the effort required for tracking the lending activities manually is just too much.
All this can be easily managed if there is a centralized system that will help in keeping track of the lending progress and also offer forecasts. This is where online lending software like TurnKey Lender will be of great help. This is an integrated solution that lenders can make use of to have the details of each particular customer on their fingertips. The software offers transparency and quick lending processing that will help the businesses to provide quick and quality service to their borrowers. With the help of the software, the lenders can easily progress to achieving their activity goals without much tension and headaches.
Easing the loan origination process
If you stick to the old ways, the lending process can be incredibly complex. The processing of each application requires a lot of employees and work time. There are many bottlenecks that the lenders face when the loan moves from one stage to the other until its closing. In addition, there is no systematic and comprehensive way of tracking a loan application from start to finish.
But worry not, the old way is not the only way. If the right online lending software is used in the lending business, it can help better manage the whole process, from loan origination to servicing, to collection. The lenders can easily see the status of the loan whenever they want to on their computer screens. The tracking of the loan manually is really cumbersome and time-consuming. If it is monitored through the online software, then information about a particular customer can be accessed at the click of the mouse button. The management team can do away with the trouble of monitoring the progress on a day-to-day basis and can use the saved time to take strategic decisions to improve the business and to make better profits.
Tracking of the critical documents
Manually tracking all the documents of a loan is a tedious task. If there is no methodical process to find out and track the outstanding documents, then it can give huge headaches for the lenders. There is a great risk for the institution if the handling of the documents is not done in a proper manner.
Effective loan revival system
It is very important to keep the financial information of the business up-to-date to facilitate a smooth annual loan review system. The loan review system must be always ready for use and should have the ability to identify the loan that has credit weaknesses. It should be able to find out the trends that are affecting the portfolio collectability. The system should be able to assign risk grades depending on the data collected. All these processes will ensure frictionless functioning of the online lending business. This is not possible without the help of good lending automation software.
The lending software effectively streamlines the loan collection process. It will keep track of the activities and the receipt dates for easy and quick access. The failure to update the financial status of the borrowers might suggest that he or she is facing some difficulties. With the help of an efficient tool suite, the lenders get a chance to quickly identify such borrowers with overdue documents. This will help the business save money.
Smooth transfer of risk level credits
Any lender will come across many default borrowers. In order to stop the stem of such defaults and to prevent it from causing huge damage to the business, it is a good idea to invest in online lending software. The tool should be able to quickly transfer the default and problematic loan accounts to the special service department to take necessary action quickly. The risk level along with the loan details, the credit documents, and the collateral should be sent to the special servicing panel for further investigation. The software should also help in the role-based routing of the files and quick transfers so that the concerned department can take quick actions.