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Debt and Loan Software - Quick Overview and FAQs

Below you will find all the information you need to identify a debt and loan software that is right for you and you business. Whether you are a debtor, a creditor, or a collection agency, you key to success is know what software you need and what software you don't.

What is debt and loan software?

Debt software is primarily used to track and collect current and outstanding payments from loans that were issued to a debtor, or for borrowers to try and repay loans in the most efficient way possible.

Loan software is primarily used to manage the process of issuing new loans to potential debtors based on creditworthiness.

Who uses debt and loan software?

Lenders use debt software to make sure they are receiving interest, capital, and other payments on time. Consumers use debt software to pay down debts (loans) and avoid interest and late fees where possible. Collection agencies use debt software to more aggressively follow up on overdue loans.

Lenders use loan software to manage their portfolio of loans and to issue new loans to debtors based on creditworthiness.

What are the types of loan software?

Loan Management Software

Loan management software works like a CRM for the financial services industry and can provide valuable insights to both lenders and borrowers about the status or stage of their loans. Loan management software typically encompasses a variety of different stages of the loan process and typically includes servicing software, origination, underwriting and processing in one platform.

Loan Origination Software (or Loan Originating Software)

Loan origination software (also known as loan originating software) software used to manage various stages of the loan servicing cycle. In other words, loan origination software tracks all stages from the application for the loan, to verification of necessary documents, the approval of credit, any collateral, and underwriting of the loan.

Loan Underwriting Software

Loan underwriting software is software used to verify the criteria needed for loan approval. In other words, this software verifies the income, assets, debt, and collateral (property, etc.) in order to assess the credit worthiness of the potential borrower to determine the likelihood they will be able to pay back the loan given its amount.

Loan Servicing Software

Loan servicing software goes further than origination software by managing the lifecycle of a loan from origination to post underwriting to reporting. As many creditors choose to service their own loans for better profitability and regulatory compliance, this software seeks to make the servicing process more simplified and reduces potential errors.

Loan Processing Software

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Loan processing software seeks to streamline the loan process by allowing potential borrowers to ask questions or address concerns directly with the lender via secure communication platform, while at the sametime having easy ways to provide necessary forms and documents that can be viewed by the lender or other stakeholders. This is typically the name given for origination software in the mortgage industry.

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Cash Advance Loan and Payday Loan Software

Cash Advance Loan Software (also known as Payday Loan Software) is specialized loan management software for the cash advance and payday loan industry. Due to the instant nature of approvals and disbursements coupled with higher interest rates and most often subprime borrower credit, they need special software to assess risk and qualify loans quickly.

Loan Database Software

Loan database software stores customer information and allows for 1st party access to information on debtors, as well as permission-based 3rd party access in order to share information about loans granted, payment history, or any other information that can be securely shared for analysis and assessment of loan risk.

Loan Portfolio Analysis Software

For a creditor, a loan portfolio functions similar to any other investment portfolio (like a stock portfolio) whereby you will want to look at how much is invested (loan amount) what gains are made over time (interest paid) as well as any losses incurred (unrecoverable loans). Loan portfolio analysis software lets you look at the performance of all your loans (loan portfolio) and analyse its performance at any point and time.

Loan Tracking Software / Loan Tracker Software

A loan tracking software allows creditors to track all funds due to them at a given point in time, from principal and interest payments, to late payment fees, principal insurance payments, and more. Loan trackers can also keep an eye out for irregular payments (payments that are too big or small) and adjust the principal amounts when required.

Commercial Loan Software

Commercial loan software deals with exactly that, commercial loans. Whenever someone is looking for a commercial real estate loan, a business line of credit, financing for equipment, vehicles, or construction, commercial loan software is used to automate the process of assessing risk and issuing loans.

What are the types of debt software?

Debt Management Software

Debt management software allows companies to track who owes them money in the forms of capital payments, interest payments or other payments, as well as tracking the date which debt is coming due, and which payments or invoices are past-due.

Debt Collection and Recovery Software

Debt collection software works like an automated collection agency for your overdue bills and invoices. Similar to accounts receivable software it can automatically send gentle reminders for payments that are only a few days overdue, and encourage late payers to make payments before more drastic measures (collection agencies) are needed.

Debt Control Software

Debt control software is typically used by debt control agencies (DCA) to manage outsourced 1st party and 3rd party debt collection services. This software calculates the likelihood of collecting the debt and writes-off debt that become uncollectible.

Debt Reduction Software

Debt reduction software is used by consumers in order to help them track and pay down their debt with the goal of paying off longer term debt in the lowest cost way possible. These software tracks debt that has the highest interest payments first, and helps you to track payments coming due so you can avoid any late payment penalties.

About The Author:
Written By: The AppIntent Team
Published On: 2021-11-09
Last Updated: 2021-11-09
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