Industries like banks understand that the COVID 19 pandemic caused a lot in the world to change the financial status of many families. For the first time in their adult lives, a significant number of adults had to resort to collecting unemployment checks and using state and federal government resources to supply meals for their family. Some were fortunate enough to return to work when vaccines began being administered after the pandemic; however, for many, that didn’t happen. In addition to credit cards, those in the financial lending or credit issuing industry saw an influx of loan applications from customers needing an advance until things get back to normal.
Continue reading to understand what is usually looked at when deciding to give a loan, and what creditors and lenders look for in loan management software.
It would be nice if everyone could get a loan when they applied. However, lending institutions would lose more money than they make due to bad lending practices if that were the case. Therefore, when customers apply for loans, some of the things they look for are:
- Financial history (credit report)
- Current debt to income ratio
- Collateral
- Employment status
- Stability (living/working)
However, banks, financial institutions, and stores that extend credit are using loan management software more often to help make decisions and manage customer accounts. Loan management software is a system utilized to determine if a customer is creditworthy and allows online management of their accounts. It is beneficial for institutions and customers, and there are certain features that institutions and stores should look for in loan management software.
Accurate and Detailed Data Reporting
You want loan management software to give you real-time reports of every aspect of the loans and credit you have extended. That includes interest, payment due dates, current balances, and other statements that you can use for future forecasting for your business.
Customizable to Adaptable to Your Current Website
Whether you are loaning money or accepting credit applications for furniture, you want a loan management software system that can connect to your website and run from your platform. There are a lot of loan management software companies, and you don’t want to get involved with one whose system isn’t compatible with yours. Look for software that is adaptable. For example, Infinity Software will work to grow your business and build a system around what you already have.
Allows Secure Online Payments
Secure electronic payment options are convenient and eliminate some of the geographical boundaries that customers may experience. They also give customers more time (up to the last minute) to make a payment without the worry of being late.
Ease of Use For Customers
If your website allows customers to shop and then apply for a loan, you want the form that customers complete easy to use and maneuver. Customers do not want to be led to various pages or get back to checkout once their loan is approved. Therefore, creating a system and program that is easy for customers to use is essential.
Allows Customers to Manage Their Account
Customer service is a vital part of most businesses. However, customers prefer to manage their accounts if they can. That means a system where they can change the payment date, look at the interest they’ve paid to date, or make an additional payment when they have extra money is significant.
Flexibility
Lenders and creditors want a system that is flexible enough to adapt to customers’ needs. That means a powerful system that allows the customer to quickly see how much interest they would pay in 12 months versus 24 months.
Allows e-Signature
Customers who are completing an application online also want to sign the documents online. Therefore, creditors need a platform that allows for and accepts e-signatures from their clients. The benefit to the client is convenience which customers appreciate.
Text Messaging
Customers appreciate the courtesy reminder that a payment is coming due. Therefore, a text messaging system with those reminders is a benefit to customers.
As you have read, loan management software can do a lot of good for banks, financial lenders, and stores that extend credit. It is also great for customers who want to access and manage their account. If you are shopping for loan management software, the items highlighted above are starting points and items that you want included in your package.