Our vision is to revolutionize and automate the loan servicing workflow of the global financial community.

What to Look for in Loan Management Software

loan management

Loan management software is essential to banks, fintech companies, and other businesses that manage loans in today's changing financial landscape. Lenders and financial institutions face challenges in managing loans efficiently. For example, some businesses have basic customer portals that do not offer enough support or functionality to the borrower. When a borrower must contact them directly, the lender spends more time and money making up for this shortcoming. Knowing what to look for in loan management software can help your lending business select the best software solution for you and the borrower.

Key Features of Loan Management Software

  • Automation capabilities for streamlined processing, collections, and servicing
  • Comprehensive borrower and loan data management for easy access and organization
  • Integration with credit bureaus and other data sources for accurate credit assessment and risk analysis
  • Configurable workflows and rules to adapt to specific lending policies and regulations
  • Robust reporting and analytics for real-time monitoring and performance evaluation
  • Compliance and security measures to ensure data protection and adherence to regulatory requirements

  • Scalability and Flexibility

    Scalability and flexibility should always be considered when looking at loan management software. As your lending business continues to grow and ramp up, you will want software that can handle an increased volume of loans. Look for flexible software that can handle various loan types and structures, including consumer, commercial s, auto, etc. When selecting a software solution, remember your business’s future needs and expansion plans. As the portfolio scales you should not have to increase your workforce. A future-proof loan servicing software will allow you to experience economies of scale and automate tasks growing in volume.

    Integration Capabilities

    Things to look for regarding integration capabilities of the loan management software:

  • Seamless integration with existing systems, such as core banking platforms and customer relationship management (CRM) software
  • Compatibility with third-party applications and services, such as payment processors and document management tools
  • API availability for easy data exchange and interoperability

  • Your loan servicing software will need to connect to every aspect of the enterprise, from your originations system to your general ledger. It will need the flexibility to interface with every form of technology in your enterprise. It will also need the most appropriate interface required for the business. For example, the system needs to perform where real-time payments can be applied and the account cured and treated. For general ledger requirements, an end-of-day interface is most appropriate. For some lenders, getting real-time data out of the system and fed to customer portals or other service vendors is paramount. Ensure your system has an API-first architecture, allowing the system of record to provide critical data to your borrowers when requested.

    User Experience and Interface

    When looking at the user experience and interface, check to see if it is an intuitive and user-friendly interface for easy navigation and efficient workflow management. See if it offers configurable dashboards and reporting options to suit individual user preferences and roles. Also, remember to ask what training and support resources the software vendor provides to facilitate user adoption and maximize productivity.

    Within a loan servicing department, there will be groups of people performing vastly different tasks. The system will need to be configurable enough to automatically get the correct information to the correct person depending on their role. Role-based screens and security ensure your organization only allows the people with the right authority to see appropriate data.

    Data Security and Compliance

    Security and compliance must be taken into consideration to protect borrowers’ data. Look for robust data encryption and access controls to protect sensitive borrower information. Ask if there are regular software updates and patches to address security vulnerabilities and maintain compliance. Does the software comply with relevant regulations, like the General Data Protection Regulation (GDPR), Gramm-Leach-Bliley Act (GLBA), or the Servicemembers Civil Relief Act (SCRA)?

    Pricing and Support

    When looking at the pricing and support offered, you will want to evaluate the vendor’s pricing models. Look for one-time license fees, subscription-based plans, or transaction-based pricing. Other things to consider are ongoing maintenance, support costs, technical support, and customer service channel availability.
    When selecting loan management software, the features, integration capabilities, scalability and flexibility, user experience and interface, data security and compliance, and pricing and support are key considerations. Thorough research is critical when evaluating and finding the right software solution. When selecting loan software, investing in reliable and feature-rich software is best to optimize loan operations and enhance customer experience.

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