Explaining Loan Origination System And How It Enhances Efficiency

Are you new to the procedure of loan origination software? Don't fret. We have got you covered. Let’s get going without further ado.

Loan origination is a procedure where the buyer applies for a certain amount of loan and the lender disburses it or rejects the application if something goes wrong. This procedure consists of every specific step from application to funding disbursement or rejection of the same. Hence, normally the whole system of automating and managing the loan application and disbursal procedure is known to be the loan origination system.

Depending on the type of loan applications, the origination procedure varies. For example, the procedure of mortgage loans is very much different from that of car loans or personal ones. Once the process of loan origination is over, the procedure of loan servicing begins. The procedure is performed by extremely talented professionals. This is the process which consists of all the services until and unless the borrower repays the loan amount.

The loan origination procedure can differ amidst various financial organizations. It can take place with the help of different channels where in meetings and conversation touchpoints are also the main concern. The whole process is basically clumsy and required a lot of documentation. Normally, loan origination takes about thirty five to forty days. Nevertheless, with the usage of automated systems, the procedure is now simple and quicker.

Stages of loan origination

The procedure of loan origination is completed when different stage requirements are fulfilled by the borrower. These stages are vital for delivering the best customer service. In addition to this, the procedure varies from one lender to another. However, they need to follow the below mentioned steps.

• Pre-qualification: It is the first stage of the procedure where the lender has to check the eligibility criteria of the borrower. The borrower has to submit the required documents which include id proof, employment status, credit score, and bank statement. After the submission of the documents, the lender verifies them and the procedure is further processed.

• Application: The application procedure is where the borrower provides all the mandatory details to request for a loan.

• Application processing: Once the application is submitted, the lender processes it. Keeping in mind the verification, it may take some time for the procedure to move forward.

• Underwriting: This is the procedure where the lender reads the financial information of the borrower.

• Credit decision: The final result of the underwriting is the credit score. It is the decision of the lender to approve or deny the application.

• Quality check: To make the final decision, the lenders have to check whether the whole procedure took place in the right manner and all the essential steps have been followed.

• Funding: Once all the documents are verified and signed, the lender makes the funds available.

The Final Word

These are some of the factors you need to know about loan origination. If you want to gather more information about the loan document management software or other details, get in touch with the professionals today. They will also provide information regarding ABL loan if needed.

About This Author

Faina Miller Joined: October 28th, 2020