How to Find the Best Loan Management Software

By: Dylan Jacobson
February 9, 2022

The global management software market is expected to grow to USD 2.43 billion in the next few years. Driven by consumers who want quicker, better, and simplified processes, the loan servicing market relies on software solutions to address increasing expectations. 

Investing in the right loan management software can help respond to this consumer demand. It streamlines loan-lending processes, allowing you to manage multiple loan types, like consumer or supply-chain lending. This way, customers can see you as the sole solution for their borrowing and financing needs. 

And with better client service, lower costs, and more profitability, automating the entire loan lifecycle from management to the collection is no longer a “nice to have,” but a modern “must-have.” 

But in a sea of loan management software options, finding the best one can get your head spinning. In this article, you’ll learn how to find the best loan management software suited to your needs. 

What is Loan Management Software?

Loan management software is a digital platform that automates the entire loan lifecycle from management all the way to the collection. It simplifies the process of assigning, calculating, and managing loans. Because of this, loan management software accelerates each stage of a loan cycle and decreases friction between lenders and applicants. 

That’s a stark contrast with past traditional loan management processes, which are time-consuming, require a tedious level of attention to detail, and are full of manual work with applicant background credibility checks, interest rate calculations, supervision of payments. And these are just a few obstacles. 

It is no wonder that modern loan management software has recognizable advantages over past legacy lending systems. With full-fledged capabilities, lenders today can automate loan-lending processes to drive their businesses forward. 

Top Benefits of a Loan Management Software

The first step to reap the full benefits of automating processes is by not managing loan origination and servicing manually. In fact, this comes as no surprise since traditional lending is changing. Reliance on human support is decreasing as the expectation for better and quicker client service is rising. 

By automating processes through loan management software — over manually managing the whole loan lending lifecycle — you can help your business stand out. To do so you need to find the best loan management software for your needs. 

Today’s market is riddled with inadequate loan management software solutions. Some of them offer limited functionality when it comes to capturing and managing data. Others have limitations in defining or categorizing the applicant, the process, or even portfolio data needed for further analysis. Other solutions do not have data protection mechanisms in place to protect data from loss. 

Finding the best loan management software means you don’t get to miss the following benefits: 

#1: Gain Process Efficiency

80% of banks believe automation is key to reducing costs, improving customer service, and competing successfully. Manually managing the loan lending process is prone to human errors, which can be costly for operations and business reputation. 

Posting payments, renewing loans, making loan modifications, or simply figuring out late fees is also time-consuming. Without automation, such processes can take you a few days. With automation, you are looking at a 30-minute job, at most. 

Automation offers the opportunity to speed things up by: 

  • Processing more loan applications at once 
  • Keeping track of debt collection Automating payment schedules by creating repeatable, custom-tailored payment schedules, and more. All this can help you grow your client portfolio, making you more money in less time. 

#2: Stay Ahead of the Curve

Handling hundreds or even thousands of loans constantly can cause data to be spread everywhere. And it’s important to make the best use of the data you have, no matter where it is stored. The best loan management software provides the opportunity to use big data to make smart loan-lending decisions. 

With better loan tracking, you can use data to your advantage. Whether that is to calculate more accurately or get better organized, the best loan management solution keeps your business not only afloat but at the top. 

#3: Leverage Automation to Maximize Revenue 

An automated loan-lending process means you can process, assign and manage more loans, on top of tracking the entire loan lifecycle. This way, you can build better client relationships and find new opportunities. 

It is only fitting that more than half of the business functions in the last year saw an increase in revenue following AI adoption. By minimizing the time it takes to handle loan processes, you can focus on the things that really matter – client service. 

The end result points to improvements not only to your internal processes, client relationships but also revenue. That’s a triple win if you ask us. 

#4: Simplify Privacy Compliance

With the increasing privacy landscape complexity with numerous laws and regulatory requirements (GDPR, CCPA, PIPEDA, etc.), the need to handle privacy compliance is more important than ever. 

An outdated technology stack can pose compliance risks for your business and clients. That’s why automation with a loan-lending workflow simplifies the process and helps mitigate privacy risks.

Choosing the Best Loan Management Software: 5 Factors to Consider

To reap all these benefits, you need to choose the best loan management software for your business needs. It’s easy to get lost in a myriad of loan management software options, so plan to focus your research on five significant factors.

Factor #1: Solution Scalability

When deciding on a new loan management software, you should consider the extent to which the solution covers the entire loan-lending lifecycle from origination to loan collection. 

The more loan types the solution supports, the better. Consumer lending, SBM lending, supply-chain lending, or automotive lending can all be part of solution offerings. After all, your business needs are diverse, and so should the solution fit such needs. 

As opportunities arise, the best loan management software helps you scale into new markets and products. 

Factor #2: Easy-to-Use Platform

A loan management software solution is as good as the people using it. Adoption is key. 

That’s why you should find a solution that offers user-friendliness through customization. A flexible solution that provides process wizards can help users navigate tasks easier. 

Customizing workflows with instructions provides users with an intuitive way of working, keeping them close to what they know works best for them. Search for a solution that’s lightweight and flexible enough to offer configurable process wizards to conform to YOUR user needs. 

Factor #3: Integration Capabilities

With more than 85% of businesses planning to make a cloud-first move in the next few years, finding a loan management solution that uses cloud-based services future-proofs your business. 

When looking for the best loan management software, you need to look for a solution that offers integration with third-party applications. It needs to have an API itself to integrate with other software. 

The chosen solution should also leverage your existing systems – like CRM or ERP – and seamlessly integrate across them. 

Factor #4: Visibility for Decision-Making

To ensure the risks you are taking are truly worth it, you need better data to empower better decision-making. 

Choose a loan lending software that offers you the ability to: 

  • Determine which lender factors had the most impact on performance 
  • Obtain valuable insights to qualify applicants with the best attributes 
  • Identify areas of loan-lending process improvements 
  • Assess your portfolio profitability, and much more. 

Factor #5: Privacy Bulletproof Vendor

The recent increase in cyberattacks has demonstrated the need to build a Zero-trust security framework for businesses. Lenders make no exception. 

Data protection has become more important than ever. Find a software vendor who understands this and offers that layer of protection through privacy and cybersecurity certifications (SOC II, ISO 27100, etc.) 

Being in the loan-lending industry also means that you frequently handle sensitive data. The best loan management software will provide the capability to have rapid, easy access and control over data. 

Loan management software that offers a high degree of privacy also allows you to build robust security processes for all your loan-lending workflows, mitigating privacy risks. 

Conclusion

Does success require automation? It certainly seems to be the case when we talk about automating loan-lending processes. But reaping its full benefits is challenging without the best loan management software suited to your business needs. 

Finding the best solution means you should take a closer look at the top five selection criteria, including, but not limited to, solution scalability, easy adoption, integration capabilities, visibility for decision-making, and a privacy-conscious vendor. 

If you are looking for a platform — and vendor — that offers such capabilities across the entire loan lifecycle, from managing and servicing to collecting, begin a 30-day LoanPro.io trial. Our powerful loan management software can help improve client services and ensure continuous business profitability.