Loan Servicing Software

Loan servicing software is a tool lenders of any size can put to good use throughout every phase of the processing of loans, whether it's a personal loan for an individual, corporate loans, or tuition money for students. Of course, each of these different types of loans has different requirements and is processed in different ways. The software designed for each of these transactions has been created with all those specifics in mind. Whether the loans are made online or in the physical office of a lending institution, these programs can be implemented.

These loan organization software packages have everything built in that a lending officer will need to process a note, but there are sometimes special additions that reflect the specific nature of the particular lender using the loan origination software. In these cases, it is possible to make modifications to the original that will fit the lenders needs. This eliminates having to find a program with those specifics already built in--which may be impossible. Time spent in a futile search is thus saved. Once those special features have been added, the lender doesn't have to stop there if some new law is passed, requiring different forms, etc., because there is no end to the changes that can be implemented as necessary. In addition to those changes that can be made by the lender himself, any changes will be provided by the loan origination software so that the client will always be up to date. Further, if there is a glitch in the system, customer service is available on demand.

Once a note is contracted, there are follow-up procedures that must be kept. Keeping track of the promptness of payments and payment amounts, and getting credits to the account, no longer has to be done manually with loan servicing software. Follow-up phone calls and letters are no longer the norm for reminders. Automatic e-mails remind a borrower of his status, especially where payments have been missed or late. Any changes in payment date or other particulars that a borrower might need to keep the note current are sent electronically. Many of these programs also give the borrower access to his account online to check the status or communicate with the lender.

The means for calculating loans and keeping track of payments are not the only features of this loan servicing software. All the forms needed for application and electronic signature are also included, and can be downloaded by both lender and borrower for their files. Paperwork is still necessary for business transactions, no matter how much we rely on computerized programs. When computers first came out, there was talk of someday having a paperless society. Now these many years later it's obvious that "paperless" was merely a pipe-dream. Loan origination software, however, makes the generation of that paperwork much less laborious than it once was.

Student loans can often be complicated. Besides monitoring the loan itself, there is a need to verify the status of a student at regular intervals. Sometimes funds are coming from several different sources, and all the information can be kept together if needed. Grants, scholarships and loan information needs to be in one place for the benefit of the school, so they can be sure all funding has been received in time for the new semester to start. Different schools have different requirements, so the loan origination software is specifically set up to meet those needs.

At the end of the year there are reports required for IRS filing and institutional records, so the loan servicing software is set up to print out those forms for the lender. Electronic calendars will automatically generate reports on given dates, so the clerk in the lender's office doesn't have to rely on memory or a desk calendar to remind her that a report is due. When they are generated, all the clerk or secretary has to do is print them out and get them to the proper location for processing. Interest is always charged on loans made, and it has always been so. Honest lenders will deal fairly with borrowers and not charge interest that is unreasonable. In Biblical times, the rules were as follows: " If thou lend money to any of my people that is) poor by thee, thou shalt not be1 to him as a usurer, neither shalt thou lay upon him usury." (Exodus 22:25)

Mortgage loans require a different kind of monitoring as well. Both lender and borrower should have the ability to enter the records and see the status of the loan. Payments can be made electronically, if preferred over sending a monthly check, and the loan servicing software provides for that, directing the funds to the proper account. Instead of worrying if a payment will arrive on time through the Postal Service, the payer can be certain the moneys are received the same day. Promptness counts on the credit report that is generated from a loan, so this is an important factor.

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