10 factors to consider when choosing loan management software

Finding the right loan management software for your business can be challenging. With the growth of fintech and the digital economy, there are many more software providers to choose from and it can be difficult to know what will best suit your needs. 

For example, are you hoping to scale quickly and launch new products? Is customisation an important consideration? Do you need a swift return on investment? Equally, because regulations are becoming more stringent and cybercrime is increasing, compliance and security will be essential requirements no matter what your goals are.   

Here are 10 things to think carefully about when choosing loan management software and comparing solutions from different providers. 

1. Functionality

This may seem obvious but it’s important to map out your needs first and know precisely what kind of functionality is required to support different teams and activities within your business. An end-to-end loan management system should handle all the activities in the loan cycle, from applications to settlement. This will include loan origination, loan servicing, customer communication, collection tracking, document management, payment processing, analytics and reporting, and integration with other systems. 

All these activities should be automated for speed, accuracy, and the best customer experience. Aim for software that eliminates the need to complete loan cycle-related tasks manually. Automated functionality with intelligent workflows will eliminate manual errors and promote straight-through processing.

2. Scalability 

Unless you have very limited objectives, you must begin with growth in mind and employ software that enables you to scale your business and adapt to new needs. You will need to accommodate growing volumes without experiencing drag, add new users and products without damaging performance, and ensure that compliance and security are maintained as the business evolves. 

3. Customisation

Being adaptable is important in today’s fast-changing market. Lenders must be prepared to tailor their services to cater for different audiences and diverse needs. Being flexible means being able to customise software if it serves your business plan and future needs. If the software is inflexible, it will restrict your growth and ability to evolve, and you may require costly and time-consuming redevelopment to remain competitive. 

4. Ease of use

A loan management solution should be simple for your employees to learn and use and simple for your customers to navigate so that it creates a positive experience and strengthens loyalty. If it is not user-friendly, it will waste employee time, lead to frustration, and may ultimately negate many of the benefits. Pay close attention to the user interface and ensure that it is engaging and intuitive. 

5. Integration

 Integration is important for overall operational efficiency as well as scalability and customisation. CRM tools, accounting software, payment processing and other loan management software and systems should combine seamlessly to create a smooth experience for borrowers and lenders alike. 

6. Compliance

As regulations become more demanding and digitalisation increases, lenders must ensure they remain compliant. Borrowers must therefore look for lenders that offer a comprehensive lender compliance service. Among other regulations, lenders must comply with the new Consumer Duty law and GDPR, KYC, and AML requirements. 

7. Security 

While digitalisation has been transformative for business and created new financial service providers and financial products, it has also created vulnerabilities. Because lenders deal with sensitive personal data, they must prioritise security and protect customers with the latest risk assessment and security management tools. Loan management systems must include standard security features, such as encryption and SSL certificates, and should have regular assessments to ensure they offer up-to-date protection against cyberattacks. Fraud is continually evolving and lenders must have well-developed digital strategies and security techniques to combat it. 

8. Reporting 

Financial reporting is a vital part of the loan management lifecycle. Reporting software will help to collect and translate data from a variety of sources and present it in easy-to-understand formats. An automated and streamlined approach is needed for timely, accurate, compliant reporting to regulators and to inform internal decision-making and enhance customer service. 

9. Reputation 

Reputation is one of the software vendor selection criteria to consider when choosing loan management software. Research the market to see user comments, how vendors have performed against key metrics, which vendors are preferred by leading lenders, and read case studies.   

10. Support 

No matter how good the loan software is, you need to work with a supplier who will offer immediate assistance if something goes wrong or if there are general queries. The service you receive will in turn impact your customers so the availability and quality of customer support must meet all your operational requirements and customer needs.  

Ticking the lending boxes

Whether you are an established lender or a start-up, a bank or a fintech, you will need loan management software to be competitive and ensure operational efficiency and superior customer service. See the Lenvi Buyers' Guide for more information, and book a demo of the Lenvi platform.