Intelligrow loader image
The Key points to well-organized Commercial Loan Origination

What is causing this major movement and how banks, traditional lenders, and new beginners in the market make sure that they are as systematic as the fintech leaders in the space? In this article, we will discuss it all where we share with you the key points to well-organized commercial loan origination.

It’s time to redesign the workflow of the loan origination

Without restructuring the workflow of the loan origination, banks and traditional lenders are looking at unpredictable ineffectiveness, increasing the costs of loan origination, and continuous clashes to manage their standing in the lending market.

What is loan origination?

Loan origination normally includes all the steps right from the loan applicant is filling the loan application, documents submission, documents screening, negotiation, finalization of the loan application, and finally, approval for loans.

The critical part of the lending process is Loan origination and a complex one due to the many steps included. Streamlining the workflow of the loan origination is a key point to the long-term success and growth of any lending business.

All over the process of loan origination, different resources from several business units combine to carry out particular tasks on a selective basis. Given the pandemic situation, this step includes some other modifications with executives working from remote locations throwing in a new variable into the whole process.

This type of operational issue makes it critical for lenders to come up with a solution that can help the system and make the process of loan origination much easier, smoother, efficient, and most importantly, seamless.

A loan origination solution can smooth running:

  • Screening and verification
  • Tracking credit scores
  • Recording exceptions
  • Loan approvals
  • Risk mitigation
  • Monitoring deals and agreements

This can help in doing away with copying, errors, wasting the time to access and getting approvals, and given the access to lenders to complete loan origination purely in a matter of days rather than months.

Automated yet flexible workflows

Automated systems are not soft and adjustable. On the other hand, while manual processes are flexible, they also might have errors and inefficiencies. As such, whether lenders select the automation or manual processes, they will lose either flexibility or productivity.

The perfect digital loan origination system is one that can give access to both. While the automated part of it disturbs the data immediately through its algorithms, gives the error-free results in a record time, it gave them access to make certain changes and exceptions from a case-to-case basis as might be required.

Under loan origination, these type of loan origination solutions helps for better alignment and interaction between the executives working with the several departments and limit unrestricted workload for customer relationship managers, analysts, and loan approvers.

Cloud-based loan origination systems proceed with step-by-step checklists, templates, and recommendations to help the users bring in the much-required consistency to the process of loan origination. It also helps out to place all the stakeholders on the same page as to the status of every loan application.

The significance of flexibility in loan origination

The cookie-cutter method is seldom used in the complex commercial loan origination process. For example, in the step of negotiation, the result is frequently unclear. In such cases, it is impossible to make an execution plan, complete with checklists where the results are not known.

It could be something awaited or something completely out of the book. Therefore, even if a loan origination solution is in place, it should ideally be built using a flowchart method by giving access to various probabilities and the possibility of incorporating completely new plans.

The important component of transparency in loan origination

The process of commercial loan origination indicates higher stakes, longer negotiations, and the requirements for statutory and regulatory compliance. As such, in the loan origination workflow it is important to display a high level of data integrity and transparency.

To make sure this, it is a key pointer that process and data are divided in the workflow of loan origination. This is very important to ensure that either can be carried out without compromising the integrity of the other.

A loan origination solution are given access to the lenders to capture all the deals that are still in operations (WIP) and also identifies outliers and bottlenecks. This helps them to observe the flow of every deal and its approval, all the time it makes sure that complete integrity of the data.

The right kind of workflow of the loan origination gathers the data at all critical points and given access to the lenders a real-time view of the deal and information. Lenders can make use of the collected information and insights to make informed decisions and get a direct view of how modifications made in the workflow effects the key metrics of the process of loan origination.

In the loan origination process what is the role of collaboration and communication

A loan origination solution helps to get remote teams and several stakeholders from various departments in one place. By providing a dashboard view of deals, workflows, and data, and giving task creation tools, loan origination systems give access to the stakeholders to view and controls interdependencies between the tasks, their delegation, and management of the same. By supporting the lenders or the internal credit policy of the banks, the solution can help to create the tasks in the workflow that can help them in designing deals and observing covenants collaboratively.

With flawless communication, teams working remotely can controls their SLAs with ease while providing better visibility to the stakeholders. One KPI of how well the teamwork is working with a loan origination solution in place could be to estimate if the product delivery schedules are being reached when some resources are allotted to a specific project.

Lending Software | Loan Managment Software | Microfinance Software in India | NBFC Software | Cooperative Society Software In India | Mifos X Installation | Pigmy Collection Software | Loan Origination Software For Agriculture Loans |API Solution | Loan Servicing Software | Contact Us For Lending Software

Intelligrow Logo Image