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How long has it been since your financial institution has evaluated your lending processes? If your business offers loans, and it’s been a while since you have updated current origination and management methods, there is likely room to improve your processes and help build better, more streamlined solutions for your team. Streamlining the origination process can allow your team to close more loans, serve more clients, and increase profitability. Leaving processes untouched can lead to loss of revenue and frustration for your lenders and borrowers.

Let’s look at the signs indicating a need to improve your lending process to serve all parties involved better and help increase your profits.

Delayed Decisioning

One of the leading complaints about the loan origination process is the slow decisioning timelines that tend to come from brick-and-mortar institutions.

Online lenders benefit from faster origination speeds and complete automation since all processes are digital. In fact, research shows that those who opt for an online lender typically claim that the speed at which they could receive funding is what convinced them to skip more traditional options.

However, many borrowers still prefer to work in person with a lender they can visit, speak to one-on-one, and build a relationship with. But unfortunately, in-person lending often means manual systems and non-digital (paper) processes. As a result, decision-making and origination can take much longer to complete and can cause frustration for borrowers and lenders alike.

Stalled Workflows

The phrase “hurry up and wait” can become all too real when it comes to unoptimized lending processes. Loan origination requires several steps that must all be completed accurately and thoroughly to transition to loan management, and traditional processes can stall every time the application moves from one step to another.

Steps in the lending process include:

  1. Pre-qualification: The borrower submits all items or documents necessary for evaluation. If the assessment ends in pre-approval, the borrower can proceed to the next step. Manual evaluation means an officer or employee manually reviews all documents, which could take days or weeks.
  2. Application Completion: The borrower completes the loan application. Many institutions do offer a digital way to fill out and submit the application, but paper applications still exist, which slow workflows and can further delay origination.
  3. Application Processing: Once submitted, the lender must ensure that the application is filled out entirely, accurately, and in accordance with approval requirements. Any lender not using high-quality loan origination software for the processing stage can expect significant delays and risk of human error, which can further stall the origination process.
  4. Underwriting: Underwriting is the next step once it is determined that the client’s application is fully completed and meets all requirements. This step is where the underwriter evaluates all data provided in the application and uses it to decide whether the borrower is creditworthy and favorable to receive the loan. Automatic underwriting is preferred, but manual underwriting still occurs and can further extend timelines.
  5. Decisioning: Decisioning is when the lender approves or denies the loan based on the application. Denial obviously means the process ends here, while approval means the application can move to the quality check and funding phase. Similar to underwriting, decisioning can be automatic or manual, speeding up or slowing down the overall process.
  6. Funding: Finally, the stage the borrower has been waiting to reach. With just a few signatures and likely a final quality or compliance check, the borrower can expect to receive their loan.

Advanced loan origination software delivers the tools needed for faster, simplified processes to complete all steps in the application and origination processes while remaining accurate and compliant with all regulations. But if your lending tools or technology is outdated or even nonexistent, you can expect numerous complications, including:

  • Slow or stalled processes
  • Repetitive tasks, such as data entry
  • Increase in human errors
  • Miscommunication between teams or departments
  • Fewer Loans Than What Is Possible

Change the Game for Your Lenders, Borrowers, and Organization With the Robust absVision From Allied Business Systems!

From streamlining workflows and speeding up the application and origination process to helping your lenders ensure accuracy at every step, absVision is THE solution to bring in more profit and ease loan origination pain points for all involved in the lending process.

Discover all the ways absVision can serve your team and customers by speaking with an ABS expert today: 800-727-7534

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