Thanks to the many technological advances made in the past decade or two, people have become accustomed to fast results and instant gratification. Your borrowers are no exception. Automation in today’s lending processes can deliver faster decisions and streamline the onboarding process so that customers can access a lender’s products sooner rather than later. As a result, borrowers typically expect loan origination to be fast and may be rattled when it moves slowly instead.
Automation in your loan origination and management process is crucial to satisfying your borrowers. It also benefits your team and your bottom line, allowing you to increase the number of loans you can process and the number of tasks your team can perform throughout the day, week, or month.
What Parts of the Loan Origination Process Should Be Automated?
It’s easy to say, “Everything about the loan origination process should be automated,” but let’s break it down by event:
Application Process / Data Entry
The first step in loan origination is the application. Your borrowers have to apply to a.) show interest in receiving the lending products you offer and b.) provide their information to ensure they qualify to receive said products.
It used to be standard for borrowers or loan officers to fill out an application by hand in the office or enter data points into their lending software on the computer to be manually analyzed hours or days later.
Thanks to advances in software APIs, combined with online application solutions, lenders and borrowers can automate the data entry process, speeding it up significantly. Borrowers or lenders fill out an application form online, which feeds the data directly to the lender’s loan origination software.
Pre-Qualification
Once an application is received, the data must be reviewed to ensure its validity. The analysis also tells the lender if the applicant is eligible to receive a loan based on the data entered. Manual review was once the only way to perform this step in the loan origination process. Receiving pre-qualification could take days or weeks via traditional processes. However, today’s automation solutions can produce instant feedback pertaining to the borrower’s eligibility, loan maximum, interest rate qualifications, etc.
Credit Scoring and Document Analysis Processes
Moving from the pre-qualification stage to the actual borrowing stage requires the borrower to pass the credit assessment. Lenders must know the borrower’s credit history and evaluate their financial records to gain a complete understanding of their creditworthiness. Performing a credit check without automation tools greatly extends the decisioning period. By relying on sophisticated software built for automation, lenders and borrowers can receive nearly instant approvals or rejections.
Regulatory Compliance Checks
Borrowers are expected to follow the terms of the loan agreement, and lenders are expected to abide by all governing rules and regulations involved in lending and financial services. One error or wrong move could result in penalties, fines, and other financial or legal trouble for the violating party. Sophisticated loan software with automation capabilities helps lenders avoid errors or identify suspicious activity on the borrower’s part to ensure compliance throughout the life of the loan.
Communication Between Lender and Borrower
It’s essential to maintain open lines of communication between the lender and the borrower throughout the life of the loan. Manually communicating or even using a separate software program to communicate with borrowers can lead to confusion, gaps in communication, factual errors, and more. However, with the ability to communicate directly from your lending software helps ensure clearer, faster, and more transparent communication.
absVision is your loan origination and management software with robust capabilities and advanced automation configurations.
You want a lending platform that reduces wait times, increases productivity, and delivers borrower satisfaction. absVision from Allied Business Systems is your solution. Built around automation, absVision streamlines workflows and simplifies even the most complex lending process, ensuring speed, convenience, accuracy, and more.
Learn about how our lending solutions can benefit your team by speaking with an ABS expert today! 800-727-7534
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