Community Development Financial Institutions, or CDFIs, provide loans to individuals, families, and small businesses. These innovative, inclusive lending programs are helping underserved urban and rural areas one loan at a time. CDFIs can effectively serve their clients and communities if they have the necessary operational and communication tools. One of those essential technologies is loan servicing software.
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What is a CDFI Loan Management System?
A CDFI loan management system automates the loan lifecycle, from application through closing. Traditional loan management entails gathering and confirming applicants’ reliability and reputation.
Loan management systems automate these processes and offer lenders and borrowers relevant statistics and insights.
Benefits of Having a Loan Servicing System
Loan servicing software that utilizes automation and machine learning can complete numerous basic operations more quickly and accurately than human labor.
With that, the benefits of a CDFI loan servicing system include:
Automated Reports
Digital CDFI loan servicing software generates automated reports. Regulatory bodies, borrowers, and investors request accounting, tax returns, and invoicing. Loan servicing software allows lenders to create and submit these reports swiftly.
Prevent Payment Delays
Using a CDFI loan management system, lenders will never have to be concerned about collecting debts in a timely manner. Loan servicing systems include analytical modules that can identify slight changes in client credibility and prevent payment delays.
Loan Servicing Automation
Although loan servicing companies handle most of your loan management needs, automating as many processes as feasible is still beneficial. Organizations that employ automation well can spend more time on client communications, which require more staff control.
Eliminate Human Error
Too many variables make lending error-prone. A great loan servicing software, on the other hand, is designed to eliminate any faults, which is unquestionably useful from every angle.
The Top 7 Features
Not all loan servicing software is the same. While some companies provide a combination of services, others offer a full, comprehensive loan servicing system.
Here are seven features to look for in a CDFI Loan Servicing System:
Draw Management
It is key to CDFI loan management to efficiently manage draws while making the process easy for your team and borrowers. Look for features that track relevant information such as property, inspection, photos, and cost; maintain an organized understanding of financial transactions in line with the budget with an overview of borrower disbursements and payments; track draw reserve balances; and manage and approve draw requests.
Loan Portfolio
Key to CDFI management is the ability to track and manage loan portfolio activity for informed decision making. A loan management solution should be able to monitor active deals, how many deals are approaching maturity, and what draws are outstanding, so that you can identify issues and maintain compliance.
Reports and Dashboards
Made up of components that organize visually represented data from reports (and can feature forms such as graphs, tables, charts), dashboards and reports are a powerful way to visualize key metrics. They provide high level overviews of your most important data and are essential tools that can provide chosen information at a glance. By connecting key data to your dashboard, staying informed on essential information can be done with ease.
Refinance & Renewals
Maximizing renewal revenue and refinancing loans should be effortless. Loan management solutions should include the necessary tools to manage renewals, decrease errors when refinancing, and track eligibility for renewals.
Interest AccrualsÂ
Know what interest is accrued when. Automations should include term modifications, repayment, fees, and reamortization schedules for each deal and automatic updates dependent on future cases.
Human-Centered Communications
Many lenders are concerned about outsourcing loan servicing management because they do not want to disassociate with their borrowers. It is critical to adopt a loan servicing system that gives importance to human centered communication and works in the lender’s and borrower’s best interests.
Complete Services
CDFI loan servicing software should handle origination, collections, and repayments. Bundling these services enhances operational efficiency and reduces stress. Your originations, customer service, and collections departments continually contact you to avoid mistakes. With the right loan servicing system, the organization will also ensure compliance.
The Fundingo Solution
When it comes to a CDFI loan servicing system, it is important to focus on making a difference in your community by using Fundingo’s end-to-end loan management system and the best tools for CDFIs to take your lending program to the next level.
Fundingo helps to:
- Optimize Back Office Procedures
- Increase Deal Volume Capacity
- Minimize Manual Function Time
- Impact Reporting and Dashboards
- Enhance Visibility and Customer Experience
- Reducing Response Time
Fundingo is an all-inclusive CDFI loan management system. Get in touch with an expert today to schedule a demo.