Welcome to the final and most exciting part of “The Ultimate Buying Guide for Lending Software”! If you’re looking for the ultimate lending software solution, then you’ve come to the right place! In Part 3, we will reveal the key features that every lending platform should have, showcase the top vendors and products according to different lending needs, and provide you with the ultimate steps to take before purchasing lending software.
This guide is packed with valuable insights and expert advice to help you make the best decision for your lending needs. So, get comfortable, and let’s dive into the exciting world of lending software!
And don’t forget to check out Part 1 and Part 2 if you haven’t read them yet to learn about the key considerations you should keep in mind when choosing a lending platform and the different types of lending platforms according to the type of lender – we’ve got you covered with all the essential information you need to make an informed decision.
Key Features of a Lending Platform
A. Loan Application Processing
This critical feature in a lending platform enables lenders to automate the application process. It allows borrowers to apply for loans online and provides lenders with a streamlined process for reviewing and approving applications.
The loan application processing feature is important because it helps improve the efficiency and accuracy of the lending process, reduces manual errors, and speeds up loan processing times. By automating the loan application process, lenders can save time and resources while providing a more convenient experience for borrowers.
Additionally, the data captured during the application process can be used to make more informed lending decisions and improve risk assessment.
B. Credit Scoring and Underwriting
Credit scoring and underwriting are key components of a lending platform.
Credit scoring involves the assessment of a borrower’s creditworthiness based on several factors, such as credit history, income, and debt-to-income ratio. Underwriting involves evaluating a borrower’s ability to repay the loan and the associated risk. Both are important in determining whether to approve or reject a loan application and the terms and conditions of the loan.
The lending software should use algorithms and data analysis to automate these processes and ensure a consistent and efficient decision-making process.
C. Automated Decisioning and Approval
This process uses algorithms to automatically analyze loan applications and determine the level of risk associated with the borrower. By automating the decisioning and approval process, you can streamline the lending process and reduce the time and resources required to approve or reject loan applications.
Automated decisioning and approval can also improve the accuracy and consistency of lending decisions by removing human biases and errors. By utilizing these features, lenders can increase efficiency, reduce costs, and make faster and more informed lending decisions.
D. Loan Servicing and Management
Loan servicing and management are essential features of a lending platform as they allow lenders to automate processes, improve efficiency, enhance customer experience, ensure compliance, and manage risk. By automating manual processes associated with loan servicing, lenders can save time and reduce errors. Automated loan servicing and management can also improve efficiency and streamline workflows, freeing up staff to focus on other important tasks.
Additionally, loan servicing and management features can enhance the overall customer experience by providing self-service options and ensuring compliance with various regulations and guidelines.
E. Collections and Delinquency Management
These features help lenders manage and track their loan collections and delinquency processes. This includes automating payment reminders, providing tools for borrowers to make payments online, tracking payment history, and identifying delinquent accounts.
Effective collections and delinquency management can help lenders reduce losses, improve cash flow, and maintain good borrower relationships. It is important for lenders to have a robust collections and delinquency management system in place to ensure that they can effectively manage their loan portfolios.
F. Reporting and Analytics
Reporting and analytics are important features of lending software as they provide lenders with valuable insights into their lending operations, such as loan performance, borrower behavior, loan trends, and risk factors. These insights enable lenders to make informed decisions, manage risk, comply with regulations, track performance, and improve customer relationships.
Robust reporting and analytics features can help lenders assess the risk associated with each loan application, comply with various regulations and guidelines, track the performance of their lending portfolio, manage their relationships with borrowers, and enhance their overall lending operations.
G. Compliance and Regulatory Features
These features ensure compliance with federal and state regulations, including TRID, RESPA, and HMDA, as well as Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations. It helps lenders to mitigate risks and avoid penalties for non-compliance. They are important components of a lending platform because they help ensure lenders follow the regulations and guidelines set by governing bodies.
A Lending platform with compliance and regulatory features can help lenders ensure that they are meeting these requirements, reducing the risk of penalties and legal issues. Additionally, compliance and regulatory features can help lenders stay up-to-date with changes to regulations and guidelines, ensuring that they remain in compliance over time.
H. Cloud-Based Functionality
Cloud-based functionality in lending software refers to the ability to access and manage the software from anywhere with an internet connection. This feature allows lenders to work remotely and collaborate with others in real-time.
Additionally, a cloud-based lending system provides scalability and flexibility, allowing lenders to easily expand or reduce their operations as needed. It also ensures data security and backup, reducing the risk of data loss and system downtime.
I. AI Technology
With the use of machine learning algorithms and natural language processing, lenders can automate and improve various processes within the lending software. It can help with automating underwriting decisions, detecting fraud, predicting borrower behavior, and enhancing customer experience by providing personalized recommendations.
AI can also help with portfolio management, risk assessment, and decision-making by analyzing large amounts of data and identifying patterns. Using AI technology in lending software can lead to faster and more accurate lending decisions, improved risk management, and better overall efficiency.
Integration with third-party data providers and financial institutions is an important feature of a lending platform because it allows lenders to access additional information and insights that are crucial for making informed lending decisions. This feature enables the software to integrate with external sources such as credit bureaus, financial institutions, and other data providers to obtain credit reports, financial statements, and other relevant data.
By integrating with these external sources, lenders can access a wide range of data points that can help them assess a borrower’s creditworthiness and risk profile, leading to more accurate lending decisions. This feature also streamlines the lending process by eliminating the need for manual data entry and reducing errors.
K. Mobile Accessibility
Mobile accessibility is the ability of lending software to be accessed and used on mobile devices such as smartphones and tablets.
It is important for lending software to have mobile accessibility as it allows loan officers and borrowers to access and manage loan information on-the-go, increasing efficiency and convenience. Additionally, with mobile accessibility, lenders can reach a wider range of potential borrowers who may not have access to a computer or prefer to use their mobile devices for financial transactions.
L. Customer relationship management tools
Customer Relationship Management (CRM) tools are important components of a lending platform that allow lenders to manage interactions with customers and potential customers. These tools help track customer data, communication history, loan application status, and other relevant information. This information can be used to tailor lending products and services to individual customers, improve customer experience, and build customer loyalty.
Additionally, CRM tools can also help in streamlining internal processes and automating tasks, such as email and text message reminders for payments, which can save time and reduce errors.
Top Vendors and Products According to Your Lending Needs
A. Mortgage Software: Applied Business Software and The Mortgage Office
Applied Business Software, also known as ABS, is a leading provider of loan origination and servicing software solutions for the lending industry. Founded in 1983 and based in California, the company offers a wide range of software products and services to meet the needs of lenders, including commercial lending, consumer lending, and mortgage lending.
One of ABS’s leading products is The Mortgage Office, a comprehensive loan servicing and origination software designed for mortgage companies, banks, and credit unions. The Mortgage Office provides lenders with tools to manage loan origination, servicing, accounting, and reporting processes in a single, integrated platform.
The Mortgage Office includes features such as borrower portals for online payment and account management, investor portals for secure access to loan data, and customizable reporting and dashboards for business insights. ABS provides training and support to ensure lenders can successfully implement and utilize The Mortgage Office to improve their lending operations.
B. Line of Credit Software: CreditOnline Company and Software
Creditonline.eu is a European company that provides loan management software solutions to financial institutions and lenders. The company was founded in 2007 and has since expanded its operations to several countries across Europe, including Estonia, Latvia, Lithuania, Poland, and Spain.
CreditOnline loan management software is a comprehensive loan management system that offers various types of loans, including lines of credit, installment loans, microloans, and more.
As a loan management software, CreditOnline can help manage lines of credit by providing features such as flexible repayment schedules, customizable credit limits, and automated account management. The software can also track customer credit scores and analyze creditworthiness to make informed lending decisions. Additionally, CreditOnline can automate workflows and integrate with accounting systems to simplify the management of lines of credit.
C. Merchant Cash Advance Software: Cloudsquare and Cloudsquare Broker
Cloudsquare is a Salesforce consulting and solution partner that specializes in innovative Financial Services products that help companies increase their ROI, deliver faster and better client/customer services, and tap into the cutting edge of FinTech developments to stay ahead of the competition.
Cloudsquare’s products are built on Salesforce and uniquely designed to push the bounds of what is possible in the system and take full advantage of the platform’s infrastructure to deliver future-proof and robust software applications.
Cloudsquare Broker is a customizable and effective Merchant Cash Advance Platform built on Salesforce specifically for brokers in Small Business Lending and Merchant Cash Advance. The software allows Brokers to get started with Salesforce without the time or hassle of building a custom system while still being flexible enough to accommodate any business’s specific needs. The highly intuitive, turn-key software provides an MCA Broker with everything they need to track their pipeline, close more deals, and grow their business.
Cloudsquare Broker’s built-in lead flow seamlessly transitions from one stage to another of the lending process. The MCA software manages the entire origination process, from new lead to deal renewal and everything in between. Automated workflows, smart-filtering submission channels, Lender API integrations, and automated renewal forecasting are just some of the features that Cloudsquare Broker offers to make the MCA process more intelligent.
Additionally, Cloudsquare Broker seamlessly integrates with 3rd party apps; it enables brokers to connect to their marketing platform or customize just about any feature in the LOS with a handful of clicks. Cloudsquare Broker’s unique customization tools, combined with the power and scalability of the Salesforce platform and ecosystem, allow MCA businesses to continually upgrade their systems.
Cloudsquare Broker Merchant Cash Advance CRM is natively ready to enable growth and can adapt without needing an extensive overhaul or reboot.
D. Consumer Lending Software: MeridianLink Consumer
MeridianLink is a technology company based in Costa Mesa, California, that offers cloud-based lending solutions for mortgages and consumers. The company was founded in 2002 and has since established itself as a leading provider of mortgage and consumer loan origination technology solutions.
The company’s software for consumer lending, MeridianLink Consumer, is an end-to-end digital loan origination solution that supports direct, indirect, credit card, personal, HELOC, and business loan types.
MeridianLink Consumer consolidates and streamlines applications from all channels to ensure a streamlined process for bank and credit union staff and a top-notch experience for members and consumers.
The software allows lenders to confidently and securely ensure more consumers have better, more personalized loan origination experiences anytime, anywhere.
E. Lenderkit for P2P Lending
Lenderkit.com is a fintech company that provides a software platform for launching and managing online investment and lending marketplaces. The company offers a comprehensive solution for setting up and running peer-to-peer lending and crowdfunding platforms, including customizable website templates, investor and borrower portals, payment processing, compliance tools, and analytics.
Lenderkit’s solution for P2P lending platforms includes features such as borrower and investor onboarding, loan origination, underwriting, servicing, and reporting. The platform is customizable and can be branded to fit each client’s specific needs. Lenderkit also offers integration with third-party services such as payment processors and credit bureaus. Their goal is to make it easy for businesses to launch and manage their own P2P lending platforms.
The company also offers a range of professional services, including regulatory and legal consulting, branding and marketing, and technical support. Lenderkit has a global customer base, with clients in Europe, Asia, and the Americas, and has been recognized for its innovation and excellence in the fintech industry.
F. Fund Raising Script for Crowdfunding
Fund Raising Script is a software company that provides crowdfunding software solutions. Their product is designed to help businesses, individuals, and organizations launch and manage crowdfunding campaigns.
Their platform includes features such as payment gateway integration, customizable campaign pages, social media sharing, and campaign analytics. Fund Raising Script’s software is also mobile-friendly, allowing campaign creators and donors to access and manage campaigns from their smartphones and tablets.
Overall, Fund Raising Script aims to make crowdfunding more accessible and user-friendly for individuals and organizations looking to raise funds for various causes.
Steps to Take Before Purchasing a Lending Platform
A. Identify Business Requirements
As mentioned in Part 1, by identifying and documenting the business requirements, the business can clarify its needs and expectations, which can guide the selection process and ensure that the chosen software solution aligns with the business’s goals and strategies.
This step also helps to avoid the potential for wasted time and money on a software solution that doesn’t meet the business’s needs.
Lenders should ask themselves a series of questions to identify their business’s true requirements before purchasing lending software. Some of these questions include:
- What type of lending do they specialize in (e.g., consumer loans, small business loans, mortgages, etc.)?
- What is their current loan volume, and how much do they expect it to grow in the next year?
- What is their current loan approval and underwriting process, and how can it be improved?
- What are their biggest pain points in the lending process, and how can technology address them?
- What level of customization do they require in their lending software?
- What level of integration do they require with other systems (e.g., accounting software, loan origination systems, etc.)?
- What are their compliance requirements (e.g., TRID, RESPA, HMDA), and how can software help them stay compliant?
- What is their budget for lending software, and what features are essential versus nice-to-have?
By answering these questions, lenders can gain a better understanding of their specific needs and requirements, which can help them select a lending software solution that is tailored to their business.
B. Research Vendors and Products
By researching vendors and products, lenders can make an informed decision and select a product that best fits their business requirements.
It is recommended for lenders to evaluate different software vendors to compare their features, pricing, support, and reputation to determine which one is best suited for their business, based on factors such as functionality, scalability, and ease of use. Additionally, lenders can learn about the vendor’s history, including its financial stability, customer base, and previous experience with lending platforms. They can also check the vendor’s reviews and reputation in the industry to gauge its quality of service and support.
Here are some questions that lenders should ask while researching vendors and products for lending software:
- What is the vendor’s reputation in the market, and what do their customers say about their products and services?
- Does the vendor have experience providing lending software solutions to businesses like yours?
- What is the cost of the product, and are there any additional fees or charges?
- What is the vendor’s implementation process, and how long does it take to deploy the software?
- What kind of support and training does the vendor provide, and what are the associated costs?
- What are the product’s uptime and availability, and what kind of security measures does it have in place to protect sensitive information?
- Does the product meet regulatory compliance requirements like TRID, RESPA, and HMDA?
- What are the product’s key features, and how do they align with your business requirements?
- Does the product integrate with other software systems like accounting or CRM tools?
- What is the product’s scalability, and can it grow with your business as your lending needs change?
These questions can help lenders decide on the vendor and product that best fits their needs.
C. Schedule Demos and Product Trials
By scheduling demos and product trials, lenders can evaluate the software’s features and functionalities, user interface, ease of use, and overall suitability for their lending operations. This helps ensure that the lending platform selected will not only meet the lender’s current needs but also provide room for growth and scalability in the future.
Additionally, demos and product trials allow lenders to compare different lending software options and make informed decisions based on their experience with each product. This can help save time and money in the long run by avoiding the purchase of software that doesn’t meet their needs or is challenging to use.
When scheduling demos and product trials for a lending platform, lenders should ask the following questions:
- What are the key features of the software, and how do they benefit my business?
- Can the software be customized to meet my specific business needs?
- What is the user interface like, and how easy is it to use?
- How is data security ensured, and what measures are in place to prevent data breaches?
- What kind of customer support and training is provided with the software?
- How does the pricing structure work, and what are the ongoing costs?
- How does the software integrate with other systems and platforms I am currently using?
- What kind of reporting and analytics are available with the software?
- How does the software handle compliance with industry regulations and standards?
- Can the software scale with my business as it grows and expands?
D. Conduct Reference Checks
Conducting reference checks is an important step before purchasing a lending platform because it allows lenders to verify the vendor’s claims and gain insights from other customers who have used the software. This helps lenders to make an informed decision and avoid potential issues that may arise later on.
This step allows lenders to verify the vendor’s claims about the functionality, ease of use, and support provided by the software. It can provide valuable insights into their experiences, including any issues they faced and how they were resolved. It can help lenders assess the responsiveness of the vendor’s customer support team and their willingness to address issues promptly, and lenders can understand how effective the software is in meeting their needs by speaking to other customers with similar requirements.
When conducting reference checks for a lending software vendor, lenders should consider asking the following questions:
- How long have you been using this vendor’s software?
- Have you experienced any major issues or downtime with the software?
- How responsive is the vendor’s customer support team?
- Has the vendor provided adequate training and support for using the software?
- How would you rate the overall user experience of the software?
- Have you experienced any difficulties with data security or privacy while using the software?
- How flexible is the software in terms of customization and integration with other systems?
- Have you noticed any significant improvements in your lending operations since implementing this software?
- Would you recommend this vendor and their software to other lenders?
E. Negotiate Pricing and Terms
This step can help the lender to avoid overpaying for a platform or agreeing to unfavorable terms that could impact their bottom line. By negotiating pricing and terms, lenders can often get a better deal than what is initially presented.
Additionally, negotiation can help to establish a mutually beneficial partnership between the lender and the software vendor. This can lead to a better working relationship and potentially more favorable terms in the future.
When negotiating pricing and terms for a lending platform, lenders should ask the following questions:
- What is the total cost of the platform, including any additional fees for setup, maintenance, and upgrades?
- Are there any discounts or promotions available?
- What is the payment schedule, and are there any penalties for missed payments or early termination?
- Are there any limitations or restrictions on the number of users, transactions, or data storage?
- What level of technical support and customer service is included, and what are the response times?
- Are there any performance guarantees or service-level agreements?
- What are the terms and conditions of the contract, including any warranties or liability limitations?
- Are there any data security or privacy considerations that need to be addressed?
- What are the options for customization or integration with other systems?
- What is the process for resolving disputes or making changes to the agreement?
F. Implement and Train Staff – After Purchasing
It is important to have a plan in place for implementation and training before purchasing the software to ensure a smooth transition and minimize disruption to daily operations.
Proper implementation and training can help maximize the benefits of the software, such as increased efficiency, improved accuracy, and reduced processing time. It can also help minimize the risk of errors, which can have significant financial and legal consequences.
In addition, having well-trained staff can improve customer satisfaction by enabling them to provide faster and more accurate responses to customer inquiries and requests.
When planning for implementation and training of staff on new lending software, lenders should ask the following questions:
- What is the implementation process, and what are the steps involved in setting up the software?
- What training resources and materials are available for staff, and what is the training process?
- How long does it typically take for staff to become proficient with the software?
- Are there ongoing training and support resources available to ensure that staff can continue to use the software effectively?
- How will the software be integrated with existing business processes, and what changes will need to be made to workflows or procedures?
- What are the key performance indicators that will be used to evaluate the effectiveness of the software, and how will staff be trained to use these metrics?
- What are the potential challenges or roadblocks that may arise during implementation, and how can they be addressed?
Lending platforms have transformed the lending industry, providing financial institutions with the tools they need to manage and administer loans more efficiently and effectively. With the wide range of options available, it’s essential to consider the specific needs of your business when selecting a lending software solution.
By choosing the right platform, you can improve your institution’s lending processes, streamline workflows, and increase efficiency, providing better service to your customers.
If you are a lender or broker in the MCA and alternative lending sector, Cloudsquare offers two powerful Lending solutions – Cloudsquare Broker and Cloudsquare Lend.
Our merchant cash advance software, Cloudsquare Broker, provides a fast, accurate, and automated loan creation process, allowing you to reduce processing time and costs, while our lending platform, Cloudsquare Lend, enables you to manage and monitor all aspects of your loans, including underwriting, disbursements, and collections, in a single, easy-to-use platform.
If you’re interested in learning more about our suite of products for the lending industry, don’t hesitate to contact us. Our team will be happy to provide you with more information about our products and discuss how we can help your lending business grow and succeed.
Ready to take your lending game to the next level? Download our FREE PDF version with parts 1, 2, and 3 of the Ultimate Buying Guide for Lending Software now! Get your copy and discover all the essential insights and expert advice to make an informed decision.