Lending businesses involve a financial commitment to repay loans at predetermined terms. When borrowers sign the loan approval and acceptance agreement, they accept the obligation to pay and the consequences of any lapses. If a consumer is not satisfied with the loan terms, they can reject it by not signing the contract. However, once the contract is signed, and the loan amount is released into the bank account, the loan becomes active, and the borrower cannot close it without adhering to the minimum loan term, as predetermined in the loan product. This is why a person’s creditworthiness is their asset, while active loans are their liabilities.
When choosing a bank to do business with, you may want to consider one that offers digital loans with easy-to-access tools like eContracting, which can be signed virtually using an electronic signature. Lenders who provide digitization are familiar with eContracting, where all the loan applicant’s documents are thoroughly verified using AI tools. The information provided is verified with public records such as bank statements and tax returns. The address is matched with the socials and credit scores are validated within a few minutes before all the clauses in a loan document, including covenants and bonds, are filled with the applicant’s details.
Digital loans are replacing manual work and aiding both the employees and the consumers through quick and compliant loan disbursals. Here are the common advantages of eContracts in a loan origination cycle:
- Quick Disbursal
When the pending applications don’t pile up and the workload is cleated fast, as a lender you have two things going right for you; on one hand you have employees who have free time to attend to clients and look at offering more quality services with add on features that can be upsold to them, and on other hand, you have a client who appreciates that quick response and support as they apply for a loan only when they are in need and if it is not serviced within a set timeframe then they can lose the purpose.
- Reduced Mistakes
A loan application that is incomplete or not carrying the right data is invalid and even if processed can increase the risk metrics of the loan portfolio for the lender. Digital loan software verifies the information for its authenticity and validates with third-party verification routes. All the important data points like bank statements, tax returns, and employee pay stubs are combed through the internet and cross-verified with the information submitted by the applicant
- Easy Access
Loan applications can be completed through eContracting from the comfort of a person’s house, office, or vacation spot. Electronic signatures can be used for signing and verifying the documents, eliminating the need for physical presence.
Conclusion:
Lenders who are yet to revamp their loan operations and make it consumer-centric have to consider digitization and automation as the only options going forward. Any further delay will start hurting your revenue and growth will either stagnate or even slip.
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