How Loan Management Software Can Reduce Delinquency Rates

The biggest risk any lender faces is delinquency. When customers take out a loan, it is critical to determine the level of delinquency risk that they pose. As a lender, it is up to you to determine how much risk you are willing to tolerate, as higher risk can also lead to better revenue from higher interest rates.

If you want to take the guesswork out of delinquency risk management in lending, then it pays to invest in intelligent loan management software. AppliedLMS helps to minimise delinquency rates by implementing finely-tuned automation processes during the origination phase to help determine risk more accurately and by ensuring that collections are better managed.

Our software is built to help lenders bring their delinquency rates down.

With that in mind, let’s take a look at how our loan management software can help you ensure that borrowers make their payments more reliably.

Origination And Precise Verification

The fully complete lead origination forms that our software generates is in line with industry best practices, requiring no customisation. This makes it easy for you to capture all of the necessary information from applicants so that you can accurately assess the risk level.

AppliedLMS also allows for the sourcing of leads from multiple sources, so you can find the best possible leads to minimise your risk.

Risk Assessment

Our software can also incorporate a variety of risk assessment models that assess data to identify borrowers at a higher risk of delinquency.

This can be done within seconds, by analysing historical payment data, credit scores and other relevant factors. The software can generate risk profiles that steer your lending business away from high-risk individuals, or help steer it towards the reclamation of monies owed.

With that information in hand, you can engage high-risk borrowers proactively and appropriately: offering support, offering alternative payment arrangements, or declining the loan altogether.

These preventative measures can significantly mitigate the risk of delinquency before it even occurs.

Automated Collection Module

When debtors fail to pay, the automated collection module helps streamline the collections process. This ensures that delinquency is addressed quickly, nipping it in the bud before it becomes a bigger problem.

With the automated collection module in place, customers who miss a payment will be notified via email and SMS. This is fully customisable to ensure that the language and tone of the messages suit your organisation’s brand identity.

Reminders do not have to wait for a missed payment. The same notifications can go out ahead of a due date, by email, by text message or by in-app notification, courteously reminding customers that a payment is coming. Consistent reminders of borrowers’ obligations can reduce the likelihood of a missed payment, and of the delinquency that follows it.

Other notification options are also available, along with the ability to set up robocalls.

The module also carries a variety of collections workflows, which let you define the steps and the actions to take should a borrower fall behind. A workflow can escalate its reminders, or open contact with the borrower through the channels you specify, so that delinquent accounts are handled consistently and promptly rather than case by case.

Repayment plans and restructuring options can also be implemented through the use of sophisticated algorithms and predetermined management systems.

Additionally, the module can automatically generate full and detailed reports on delinquent loans in the style of collections agencies. This can be exported in a variety of different formats, depending on your organisational requirements.

Through the collections module, customers can also manage their loans better. This allows them to apply for rescheduling or deferment in the case of missed payments, as well as giving them the ability to apply for loan restructuring to better suit their financial situation.

Through the advanced loan management software provided by AppliedLMS, you can be assured that your delinquency rates will drop significantly, leading to a more successful lending business.

If you want to minimise delinquency rates and improve your performance as a lender, then contact AppliedLMS today to sign up for our world-class loan management software.