The Ultimate Guide for Loan Servicing Software

Table of Contents:
1. What is a loan management software?
2. How to Select the Best Loan Management Software?
3. Implementing Your Chosen Software
4. Security & Compliance
5. What are the typical loan management automations?
6. Keys to Successful Implementation of Chosen Loan Management Software
7.How long will it take to see ROI?
8. How Long Is The Implementation Process?

What is a loan management software?

A loan management software automates the workflow of a lending process. It can manage the entire lifecycle of a loan from origination, disbursement, closing, and everything in between.

Every company comes with its own set of unique requirements and demands, thus loan managements are often highly customizable and adaptable! Our loan management software, built on the Salesforce platform, allows alternative lending companies to streamline the entire process. FUNDINGO Loan Management Software comes with powerful built-in reports, dashboards, and alerts, providing complete visibility in every step.

The result? Greater efficiency, more revenue and profitability, with lower risk.


How to Select the Best Loan Management Software?

Choosing the right software for corporate support can be an overwhelming task, particularly when it relates to your core service. It is essential to understand the requirements of your business and only then proceed in a programmed manner to make the right choice. While it wouldn’t be far-fetched to call this a make-or-break decision for your business, we have made it easier for you by providing a framework for the right protocol.

From years of first-hand experience, we have summarized the essential practices required for choosing the right loan servicing and/or cloud lending software into 4 essential steps. With these 4 essential steps, you will be able to choose software with long-lasting benefits for your business.

  1.   Assessing Your Needs
  2.   Exploring Your Options
  3.   Evaluating the Shortlisted Options
  4.   Implementing Your Final Choice


Assessing Your Needs

Before you start exploring options for lending software, it’s best to consider some crucial internal factors of your business. These may include short-term and long-term requirements, goals of your business, the needs of your customers, the method of delivery for your software, etc.

Business Needs

Start the process of choosing the right cloud lending software by analyzing your business goals, requirements, and strategy. The lending software is meant to aid your business strategy so it should be aligned with your business goals. For this, you’ll need to sit down with your team and create a needs-gap analysis by going through some key questions, such as:

Where is your business standing today and where do you see it in the long term?

Is your current software system up to par? If not, then where is it lacking?

What additional functionalities could improve your current cloud lending software?

Could another cloud lending software provide improved credit scoring and enhanced automation?

Who would be using this software?

Would you opt for in-house lending software or off-site cloud lending software? Also, would you have a dedicated IT team for managing the in-house software system?

User Needs

For any business to succeed, it’s essential to know its users and their needs, so whatever you do, keep your users the center of your focus. Sit down with your entire team, from the top management to the loan lending officers who will be dealing with the customers first-hand. Conduct surveys among your users to find out how successful your potential software system will be practical.

Software Hosting Method

Another key factor that will impact your business is choosing the method of delivery for your loan lending software. There are two main methods to choose from:

  1. The first is the conventional method of purchasing a software license for an in-house software program. The license covers all the IT support staff that will be managing it. This in-house software and its database are physically loaded onto servers and your corporate computer systems, thereby allowing a user to use the system.
  2. The second method is called Software as a Service (SaaS), and it refers to an off-site, secure cloud lending software operated through a third-party organization. This option suits small to medium businesses, as you don’t have to arrange a dedicated IT team for it. The software is managed by the cloud lending software organization for a monthly fee.

Exploring Your Options

Once you’ve determined the internal requirements of your business, it’s best to explore what software options are available. Focus on key areas such as service functionality, flexible management, smart automation, and credit scoring. Once done, shortlist options that are excelling in these areas.

Software Functionality

An ideal cloud lending software partner has a flexible integrated origination and servicing platform. It offers individual modules, letting you choose what you need currently while always having the option to access more features if and when needed in the future. The loan origination features should include:

  •         Automated calculation of loan amount, term period of the loan, and the interest rate, etc.
  •         Automated decision-making
  •         Flexible management of the lender’s credit policies
  •         Remote access for different sales points
  •         Separate evaluation processes for different business products and business production lines
  •         Swift adjustment to new lending rules and policies
  •         Customized tracking

Smart Automation

As a business person, your goal is to opt for a software system that streamlines your process and allows you to increase revenues. Therefore, you should look for software that will automate several tedious tasks allowing your team to focus their energy on important decisions and tasks. The software must be flexible for managers to use according to their style, and it should be easy to integrate with multiple vendors.

Optimal Credit Scoring

Only a lending software that aids in risk management for both new and current accounts alike, will get you optimal credit scoring. The best program choices offer integration with all the credit reporting agencies. The best programs also make use of machine learning and data analysis. By incorporating artificial intelligence, these programs continuously update and improve their credit scoring capabilities, so it’s best to look for software choices that check the boxes for these traits.

Evaluating the Shortlisted Options

Once you’ve successfully found some great options on your hunt for the right cloud lending software, you may evaluate them further to get your business the right and worthy solution. You can start the evaluation process by getting to know your shortlisted finalists a bit better.

Create a carefully thought-out spreadsheet of important questions regarding their modules, customization scope, pricing, security, etc. Meet with their sales reps and ask them these questions. You may even request an online demonstration of their software. Note down any further questions that may arise during these demos and make sure to get your answers before making your final decision. You can even conduct surveys with their current clients to get a better picture. It’s better to be sure of what you’re signing up for, than suffering from business loss down the lane due to a hasty choice.


Price is an important factor while choosing the right loan servicing software for your business, as you wouldn’t want to upset your resource allocation plans. Therefore, it’s best to opt for a provider offering only those functionalities that you require instead of paying for features you wouldn’t be utilizing. We would recommend choosing a software partner that allows you to access the functionalities you need and upgrade as your needs evolve. Keep all necessary, potential costs in check before making a decision. These costs include software and hardware costs, implementation costs, training costs, data conversion costs, etc.

Previous Performance History

Do not merely rely on the advertised credentials of a service provider, instead ask for demos and conduct surveys. Ensure that your potential servicing software provider has a proven performance history. You must ensure that lending is their core function, and not just a side hustle. Check for press publications regarding their performance. Also, see how long they have been in business. You can also check online for reviews of actual users and see if the provider has expanded over time and/or bagged any awards for their previous performance.

User-Friendly Installation and Operations

The right software is also easy to understand and implement. There is no benefit in saving on resources by opting for a cheaper option that isn’t easy to use, as all the ‘saved’ resources will have to be redirected on training your staff to understand it, and there still might be lots of errors and time and opportunities will be lost.

Therefore, choose software that can be readily and easily installed. This is another reason why we are slightly partial to cloud lending software. Secondly, your employees should be able to easily use it. It shouldn’t have manuals and instructions filled with lots of technical jargon.

24/7 Customer Service

When you’re an entrepreneur, you do not want to risk missing out on any opportunities due to technical failures or any reason whatsoever. That is why you must opt for lending software that offers 24/7 customer support to your employees. Also, the customer support staff must be experts in providing solutions to resolve issues in the first contact.

Implementing Your Final Choice

As lending businesses grow and expand, their offerings for loan products increase naturally followed by much-needed evolution in their regulations and policies. These changes often lead to an unavoidable need to root out their existing, straggling system and replace it with agile software.

That said, however necessary that replacement may be, it is never an easy decision to make and accept (at least initially). However, it is essential to not let fears get in the way of moving on to better things for enabling your business to climb the ladder of success. When you’re in the lending business you are well aware of the core importance of a loan servicing software.

Loan servicing software is what keeps tabs on all your details such as your policies, loan terms, interest rates, loan payments, and collections. This makes it all the tougher to choose the best loan management system, and once you’ve made your decision, it’s important to be aware of the key factors that enable smooth and successful implementation. These are the top three factors that our team has determined from its extensive experience:

  • Initiation – Defining Requirements, Planning Workflow, & System Design
  • Allocation – Establishing Priorities and Assigning Roles
  • Execution and Training

Initiation – Defining Requirements, Planning Workflow, & System Design

As mentioned above, you cannot stress enough the importance of the right loan servicing software when you are in the lending business- therefore you must carefully determine the right software for your organization. Being clear in your requirements is the first and most important step in flawless implementation. For this, all team members must share their input which must be valued and carefully studied. This includes the departments of collections and customer service as well. 

Ensure the use of the same terminology regarding the new software among the entire workforce i.e., your in-house team as well as your loan servicing software provider. This will ease communication and understanding. That said, the software implementation manager must draw a detailed outline regarding the project plan and conduct a launching meeting to explain new workflows, project requirements, establish milestones, and set expectations regarding the completion of implementation.

Allocation – Establishing Priorities and Assigning Roles

Once the implementation process has been initiated and the workflow with the new loan servicing software has been designed, you will need to finalize the scope of the implementation. You must establish priorities keeping any prerequisites into account, divide the implementation process into smaller phases, meet deadlines, and ensure that the most important tasks are catered to before the others.

In the whole stage of allocation, the lender must take and exhibit proper sole project ownership. Consultants, vendors, and even your employees are there to serve their essential individual roles in the process. As a lender, however, you know your business the best and you alone truly know the details and importance of your business goals. Use that ambition and knowledge to ensure the completion of the implementation process. If a lender doesn’t take project ownership, that ship is bound to hit rock bottom.

The lender must put together a committee of executives who take ownership of the project, ease decision making, cater to the need for resources, and encourage accountability. There must also be a dedicated project manager who solely focuses his energy, efforts, and skills on keeping the implementation process steady and the team organized. Moreover, the project team member must be empowered to make decisions to support the strategies that are a part of your business case. Otherwise, they will have to seek approval from multiple layers of senior management even for small business decisions. Therefore, to avoid delay in the implementation process, you must ensure that your team is sufficiently empowered.

Moreover, when it comes to key areas of your lending business such as accounts, collections, IT, and customer service, you must identify the experts. The experts will be able to promptly deal with any issues in their domains and will save you precious time, thereby facilitating the implementation process. With that done, you must conduct regular staff meetings to keep tabs on the software implementation status and to ensure transparency, visibility, and good pace. We at Fundingo, hope that you will benefit from the insights gained from our experience of facilitating clients with our software implementation for years. 

Execution and Training

If your team isn’t trained to use and manage the new loan servicing software, by the time it goes live, it will create a lot of lag and chaos. Therefore, you must develop a training schedule in a timely manner and begin it as soon as possible. The training sessions can be conducted on-site, online, or be pre-recorded. Use workflows from the initiation phase of software implementation for the user training content. The need to prepare your business organization workforce and your user communities to use the new software is crucial. You will need to prepare an effective communication strategy that clears any ambiguities the users may have. You must set the tone right from the very start and make sure to answer the key questions that people may have in their minds such as:

Why are you opting for new software?

Which issues will the new software resolve? (in case your firm is not a new venture) 

How will it benefit the end-user?

When will the changes occur?

How will those changes be implemented?

Communicate the answers to these questions through frequent communication, short and precise demos, and newsletters. Once you have sufficiently trained your personnel and everybody knows their duties, has a thorough understanding of the new software both in terms of usage and expectations, and set up a date for going live with your new software, make sure to assign minimal work for that date. On a side note, it’s always a good idea to choose a weekend for going live. 

Even after your new loan servicing software has been successfully implemented, it’s best to maintain ongoing support for all those dealing with it firsthand. Arrange additional training sessions, provide tech support, and always be ready to facilitate your entire team as implementation is only the beginning of your fresh start.


Requirements for software security and compliance

In the current digital age, security and compliance are more important than ever. Lenders are often bombarded with threats making qualification and certainty of the utmost importance. LexisNexis provides risk investigations and due diligence to Fundingo through their integration on the Salesforce AppExchange. It quickly evaluates your customers, businesses, and third-party vendors to verify their identities, investigate using proven solutions and discover any critical connections that may signal risk. With automated screening, ensuring security, compliance, and mitigating risk and liability are easier than ever.

Through Watchlist Screening, you can simplify your compliance workflows through LexisNexis’ streamlined screening processes and robust databases. With coverage of over 1,500 watchlists and advanced screening technology, you can

  • Automate watchlist screening
  • Minimize false positives and alerts
  • Integrate watchlist intelligence directly into your CRM
  • Ensure hiring compliance when hiring and acquiring clients
  • Establish compliance with regulations such as
  • USA PATRIOT Act • Bank Secrecy Act (BSA) • Anti-Money Laundering regulations • OFAC Sanctions • Fifth EU Anti-Money Laundering Directive • SWIFT, ACH and Fedwire protocols


What are the typical loan management automations?

Loan management software streamline every workflow from origination to closing through automation.

Fundingo’s Loan Origination Software

  • Collects applicant information
  • Manages accounts
  • Identifies the best funding sources
  • Handles offers and contracts electronically
  • Allows users to submit a deal with attachments to multiple lenders at once via The Submission Wizard

Fundingo’s Loan Underwriting Software

  • Organizes all your information in one place
  • Generates pricing options
  • Pulls credit information, bank statements, and other types of data and reports

Fundingo’s Loan Servicing Software

  • Transfers all relevant information for loan servicing directly from underwriting
  • Track renewals
  • Manage disbursements
  • Automate fees


Keys to Successful Implementation of Chosen Loan Management Software

  • Defining requirements.
  • Plan the workflow.
  • System design.
  • Delegation – establishing priorities and assigning roles within the process.
  • The execution and training process.


How Long Will It Take to See Return On Investment?

Seeing a return on investment will often depend on a number of factors such as cumulative cost, maintenance costs, and market power. These rates vary depending on each business!

How Long Is The Implementation Process?

Implementation consists of the following steps:

  • Kick off meeting
  • Business process review
  • Requirement analysis design
  • Training
  • Data migration
  • Deployment

Every business will come with its own set of requirements, often demanding customizations and adjustments. This will vary the timing of each step in order to fully cater to each unique need.

Having a streamlined, effective loan servicing software can be the answer to running an successful business. By automating core functions and removing manual processes, lending companies position themselves to expand profits and increase scalability. Solutions can include integrations for security, qualification, credit reporting, and more. With the ability to automate, integrate, and customize, loan servicing software is an essential tool to lending companies.

The Ultimate Guide for Loan Servicing Software