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10 reasons why you need a loan management system

written by the Team on the 4th of January 2023

Having been in the business for more than ten years, LendFusion has acquired a clear understanding of why different companies use our software.

Having onboarded varying lenders from small, one-person companies to large corporations, we understand the crucial focus points for any credit business.

Below are the most common reasons your business would benefit from loan servicing software.

1. Cut business costs

A cloud-based loan management platform allows you to cut costs in two ways. Firstly, you can drastically reduce the amount of underwriting staff since a modern loan management system will automatically do most of the work.

A loan management system will help your business grow without the need for additional staff. LendFusion enables you to get your business processes in order so you can automate as much as possible – from automated emails and text messages to decision making to collections.

Almost every function can be automated, provided that your business processes are well thought through, and you are using a capable system such as LendFusion.

Secondly, you will not have to spend your valuable funds on an in-house IT team because modern loan management systems already come with support and development functionality.

LendFusion, one of the best modern loan management systems, will provide each customer with a dedicated support agent who will understand the LMS in detail while also being knowledgeable of your business specifics to suggest optimal solutions.

Suppose your business needs any customisations or third-party integrations to the system. In that case, this can be ordered as required while not paying developers a monthly paycheque.

2. Provide a better customer experience – through fast decisions and a clear flow of actions

LendFusion provides your business with a built-in decision engine and workflow management, rendering handling any customer application a breeze.

Any lending business can be considered a part of a mature market, making customer relations a crucial part of your business.

Keeping your customers happy includes making fast and consistent decisions and providing your customers with clear and timely communication.

Relying on well-trained staff is but one component of the equation. Having a loan management software application to support this is however becoming critical to gain a competitive edge over your competition.

Set your decision engine to decide for you, taking into account all kinds of available data and sending out a flow of communication to customers, making the process effortless and convenient for all parties.

3. Keep your customers happy

Customer communication is best handled via a customer relationship management (CRM) tool.

LendFusion has this built into the platform as part of the loan management platform.

This enables you to keep track of any customers who have applied for your credit and remain in contact with them without having to switch between different systems. Users can perform all actions related to any applications, loans, collections or customer communication within the LMS.

4. Comply with regulation

Some markets have strict regulations regarding lending. For this, LendFusion has tools to make compliance easier.

Tools for audit trails and reporting are an essential part of the LendFusion platform. We have many standard reports as default out of the box.

Simultaneously, you can both use a third-party integration for reporting or have us create custom reports based on the specification you present.

5. Reduce risk

As far back as 2007, a study by the University of Maryland had already found that an attack by a hacker takes place every 39 seconds.

The cybersecurity situation is even worse today, which means that data breaches and loss of confidential information are a daily struggle for companies who have not taken security as a primary focus when building their IT systems.

A well-built cloud-based loan management platform, like LendFusion, will help secure your business by incorporating up-to-date security protocols and tools that are missing in older systems.

LendFusion includes two-factor authentication, FIDO UF2 key and IP based security measures for user login; we host our servers with AWS, enabling us to use a multitude of security measures, monitoring options and backup solutions.

6. Be scalable

Scalability is one of the cornerstones of any business today. Scalability is something that differentiates a ‘family business’ from a unicorn.

A well-built loan management software application will provide additional options to grow your business – increase your portfolio, include multiple loan products and numerous brands. You can do all of this with modern and capable loan management software.

Hosting by Amazon Web Services (AWS)enables us to provide you with a responsive service to your requirements. LendFusion can increase the capability of the servers with short notice to cater to your business needs.

7. Increase your service quality

You can dramatically increase your service quality by using appropriate third-party services integrated into the loan management software.

The most common integrations are credit scoring services, payment gateways and different validation and communication tools. Credit scoring will provide important input for making crediting decisions.

At the same time, payment gateways enable you to make fast and automated payments at all times of the day. Email and text messaging integrations make it possible to send out fully automated and yet personalised messages to make your customers feel more appreciated.

LendFusion supports your business – we integrate with any third-party service.

8. Integrated document management system

Managing loan documents by hand is time consuming and error prone.

Using a capable loan management system with an integrated document management system lets you spend time on more valuable tasks than, for example, inserting the customer’s address into the agreement by hand.

LendFusion will provide a system where you have to input the contract (or other) text and use different tokens to replace these as necessary with information such as customer name, date of birth or phone number.

Any data can automatically fill anything the system has saved about the customer, application or loan in a loan contract, making document handling extremely easy.

9. Changing loan terms and generating payment plans

Another time-consuming activity is generating payment plans and changing loan terms if you don’t have loan servicing software.

Recalculating, editing and agreeing on the terms with the customer can be a mammoth exercise. A web-based loan management software application makes this practice simple.

Have the system recalculate the plan either by changing the term or the amount and send it for a digital signature through the online customer area.

10. Accessibility

Working from home has never been more commonly adopted than right now and many of us had already been doing so for the best part of 2020.

Even though working in an office is often more productive and helps collaboration between colleagues, you sometimes need to get work done in other places.

A web-based loan management platform will give you the option for remote work as well as office-based work. It is recommended to use multiple security features to make working over the internet more secure – LendFusion has you covered with USB FIDO key, 2-FA and IP restricted login.

Do not let severe weather conditions or the spread of a virus stop you from effectively working and managing your business.

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LendFusion is modern cloud-based lending software for companies who want to move fast and look to deliver a great user experience to their customers.

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