The loan origination is the process by which an individual makes an application for a new loan and the lender processes such a request. The term lender may include the financial institutions such as the banks and may others. The time when the loan application has been done by the borrower up to when such an application has been honored is what basically forms the process of loan origination. The steps in the origination process may also involve the act of dishonoring the loan application. The need to take a loan will in most of the cases determine the loan origination process. For example, the loan origination process for a mortgage may be different from that of business.
There are different channels which may be utilized for the purpose of accomplishing the loan origination process. The most common types of channels may be the agents, brokers, self service and the online application. The loan origination systems has a wide application by most of the financial institutions today. Supporting the process of applying for the loans is the reason behind the development of the loan origination systems. The loan origination system will usually carry out the practice of identifying the borrower, process the information and carry out the practice of vetting on credit worthiness of borrower. Another task which will be carried out by the loan origination system is completing of the documentation for the origination process and also approving or disapproving the loan application as made by the borrower. The disbursement of the funds to the borrower is the task which follows after the loan application has been honored by the loan origination system. On the flip side, the system may also disapprove the loan application by the borrower and in this case, the funds disbursement will not be made.
Organization which chooses to use the origination systems are likely to enjoy a number of benefits. The loan origination systems offers a variety of solutions to most of the business needs bearing that such needs are dynamic. Rendering the services without incurring the extra costs is one of the benefits which comes with the loan origination system. In fact, the costs are cut on the side of the bank. The fact that the origination process is also automated makes the decision making process to also be faster. The process of monitoring the loans which have been approved is also efficient. There reason behind this is that there are solutions for monitoring the loans on real time basis. Other benefits may include the increased transparency, flexibility and best customer service due to improved response time.
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