25 RFP Questions You Should Ask when Shopping for a Loan Servicing System

25 RFP Questions You Should Ask when Shopping for a Loan Servicing System

When launching a new loan servicing software selection project, most banks and finance companies tend to follow a standard protocol, including specifying requirements, identifying potential vendors, and scheduling demos. One of the most critical steps for your company and potential partners is developing the RFI/RFP. A good RFP clearly communicates the functionality, design, and support required to meet your business and IT needs. The following are 25 RFP questions that should be included as part of your loan servicing software RFP:

  1. Please describe how you monitor and manage regulatory changes for federal law.
  2. Please list the standard interface files, both outbound and inbound, that are included with your base system.
  3. Please describe your access and permissions security, including the key security components.
  4. Please specify the types of insurance policies your system processes.
  5. Provide a list of your standard system reports and the reporting tool your system utilizes.
  6. Is system data exportable? Are standard data file transfers available for loads to a data warehouse?
  7. How long does your system maintain transaction history? What transactions are stored in the history? Which data elements are maintained as part of transaction history?
  8. What days of the month can be used as a due date? Are loans limited to selected cycle dates?
  9. How often can payments be scheduled?
  10. How does your system handle partial payments? How are due dates updated from a series of partial payments?
  11. How many different types of payments can be scheduled for a loan?
  12. Does your system support variable rate processing? Please specify rate structures supported and the rate indices that can be tracked.
  13. How does your system handle multiple advancing loans? Are there limits to the number or type of advances? What happens when someone attempts to input an advance on a fully advancing loan? Can advances be made after maturity?
  14. Can your system produce an amortization schedule (a) when booked and (b) at any time over the life of the loan?
  15. Can your system be user-modified with custom changes by the client? If yes, please detail the process required for updating screen changes for user fields. Shopping for a Loan Servicing System? Here Are the 25 RFP Questions You Should Ask by Raleigh deShazo, Director of Client Services
  16. What fees does your system charge automatically? What fees must be assessed manually?
  17. Can billing from multiple loans be combined into a single invoice?
  18. Please describe your update schedule. How are your updates administered and distributed?
  19. Please list the enhancements that were made available in your most current release.
  20. Please provide three (3) references of different sized organizations that are currently using your application.
  21. Do you have any clients that realized a successful implementation based on your standard project plan? If yes, please provide reference information and a copy of your standard project plan? Commercial Loan Specific:
  22. Please explain how your system handles SBA loans, including payments, adjustments, and reporting.
  23. How does your system produce replacement bills or updated bills?
  24. Is your system capable of accruing income at one rate while billing the customer at a different rate (Pay rates vs. accrual rate) for a Commercial loan?
    Consumer Lending Specific:
  25. Does your system support Metro II formats for credit bureau reporting?