From Paper to Paperless: The Power of Loan Origination Software

The result? Here, the loan officer in the traditional loan origination process has to go through each stage in a paper documentation manner sitting from a physical branch. They also have to ask the borrower to visit the branch of the FI for documentation, including agreement and NACH signing. And here also, to complete everything, it takes 4 days. 

But for a digital LOS, all the stages are completed within the app, which results in  taking all documentation online. Even the e-Mandate and agreement signing is done digitally. Ultimately reducing the time to just 10 MINUTES!

All-in-all, in this case also, the digital LOS wins.

Hence, let’s collaborate on the overall analysis and see below points on how the digital loan origination system triumphs over the traditional loan origination process.

Benefits of Using a Digital Loan Origination System

1. Processes 90% more applications than the traditional process.
2. 70% decrease in cost per loan application from the traditional process.
3. Able to disburse loans in just 10 minutes, which is a 99% decrease from the traditional process.
4. Reduces human effort by 85%.
5. Reduces operational costs by 75% from the traditional process.
6. Expanding geographically without creating any physical branches.
7. Borrowers can avail of loans at any time from anywhere.

Hopefully, now you are able to grasp how powerful a digital loan origination system is. Let’s expand that understanding more by looking at the current trends and advancements in its technology.

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Current Trends and Advancements in Loan Origination Technology

LOS has come a long way since its inception. Here are some of the most notable trends and advancements

• Complete cloud-based systems as they are cost-effective, scalable and seamlessly integrated with other systems and applications.
• Mobile-first solutions such as LOS are being designed to optimize for mobile devices, with responsive designs, simplified user interfaces and features like e-sign and mobile document capture.
• AI is being used in a number of ways, from automating underwriting processes to identifying potential fraud and risk factors via face-match and video-match verifications. It also helps lenders make informed decisions by reviewing vast amounts of data and identifying patterns and trends.
• Automation and digitization are moving lenders away from paper-based processes and towards e-sign, document capture, and other digital solutions.
• Integration of 3rd-party data sources such as credit bureaus, bank statements, government databases and other FIs. It allows lenders access to a wider range of real-time data. 
• Increased focus on customer experience with features like pre-qualification, instant approvals, and personalized loan offers. This helps lenders attract and retain borrowers while improving customer satisfaction and loyalty.

Conclusion

In conclusion, the loan origination system has revolutionized the lending industry by streamlining and automating loan application processes, reducing potential errors, and increasing operational efficiency. Using a cloud-based loan origination software like CloudBankin allows faster loan processing times, increases transparency, reduces the cost per loan application, reduces operational costs and enhances risk management. Moreover, a LOS has the potential to change the industry even more in the future with greater access to credit and promoting responsible lending practices. Overall, loan origination software is invaluable for any lender looking to stay competitive and provide the best possible service to their customers.