Best Loan Management Software in 2024

What is a Loan Management System?

A loan management system is a software application that supports the processes involved in loan management starting from loan disbursement to its closure. LMS system makes the whole lending experience technology driven and hence improves the performance of financial institutions. Loan management system (LMS) is a turn-key lending platform, which acts as the connecting link between borrowers and lenders. Thus, borrowers can get the required access to credit securely and in real-time.

LMS or a loan management system helps in improving the turnaround time and providing better customer service. It helps banks and financial institutions ensure transparency, competency, and efficiency in lending processes.

Loan Management System Features

Document Tracking

If a document is lost or misplaced, you can find that easily with the help of advanced search technologies of the loan management system. One can track any document easily with this software.

Recording Information

Reviewing the customers is done to identify the potential risks in the process. Thanks to loan management software, one can update every financial information easily on the platform. One can even streamline all the activities with these tools.

Report Management

Get customized reports like late accounts, payment summaries, and billing. One can get all information in the form of easy to ready reports with the report management feature of this software.

Servicing Support

With LMS, one can enable allocation of more than one borrower and guarantor to a single loan. It can set up a multi-user network with more than one level of security.

Interest Calculations

Loan management software or LMS includes interest only and self-amortized. The calculation of interest is based on Actual/360, Actual/365 and 30/360, 30/365. It can support adjustable-rate loans as well.

Investor Tracking

Track the amount invested, investor certificates, and investor allocations. With the help of this software, these reports can be exported in the form of an excel as well.

Bank Integration

Loan management software provides bank integration as well. This is required for an efficient lending process.

Integrated Accounting

With integrated accounting, there is no need for making cash flow reports by using ledgers accounting software. All business transactions can be streamlined with the loan management system.

Loan Management Software Modules

Credit Risk Assessment Module

A credit risk assessment is provided to prevent fraudulent activities. It collects data of potential borrowers and helps implement decisions.

Audit Module

All transactions can be traced back to the point where it started. It improves transparency and accountability.

Automatic Write-Off & Waive-Off

Bank write-off and waive-off processes can be streamlined using the loan management system. 

Loan Monitoring

A loan management system helps assess the credit profile of the borrower and monitor their financial health while the loan is due.

EMI Collections

A loan management system can be used to collect EMIs automatically. It also sends reminders to the customer about the due payment date. 

Loan Scheduling

You can schedule roles automatically with loan management software. Now, you no longer have to worry about scheduling them.  

NPA Management

NPA is non-performing assets, which often causes stress to the bank cashflow. A thorough understanding of NPA or bad loans is done with a loan management system in India.

Loan Foreclosure

A loan management system provides lenders the right to foreclose if the buyer stops to pay.

Loan Management System Software Benefits

Seamless Experience

An end-to-end LMS offers a consistent and reliable digital experience to various multinational corporations, medium-sized as well as small businesses.

Easy Lending

The whole lifecycle of a loan (includes origination, covenant tracking, underwriting, collateral management, servicing, and reporting) is covered in this software.

Reduced Complexity

Reduce the complexity with the help of easy integration. Lending management systems also reduce the cost associated with managing more than one system.

One Platform for Better Efficiency

Workflows, calculations, analysis, compliance and servicing, everything can be done with the help of this software. This tool can reduce costs and efforts drastically.

Faster ROI

Loan management software ensures that a large number of loan requests are evaluated quickly and disbursements happen on time, thus ensuring higher ROI.

Eliminates Human Error

You can evaluate loan approval requests accurately and automatically with the loan management system.

Supports Compliance

Using a loan management system, organizations can automate their day-to-day auditable processes to be more compliant with government policies.

Things to Consider Before Buying Loan Management System Software

• Speed of the LMS: Speed and performance, are essential for all types of businesses. Sanctioning of loans should be streamlined which makes it easier to request and receive a loan.
• User-Friendliness: One should look for a system that is easy to set up and simple to use. You should be able to configure the software according to your needs.
• Customer Service: The software you selected may have problems once you start using it. Hence, reliable customer service is required from the loan management system providers. 
• Mobile and Web Compatibility: Mobile application comes in handy and can be used for a variety of functions. You should make sure to choose a software that comes with a mobile application as well.