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Applying Automation Technology to Streamline Your Loan Origination Process

January 12, 2023

Loan origination is one of the largest applications we see here at Decisions. The rule engine and workflow manager foundations of our platform are both integral to an effective loan origination process. We are all familiar with the two most common types of loans: mortgage and auto. However, there are countless other types of loans offered by specialty lenders and financial institutions, including personal loans, student loans, payday loans, credit cards, and numerous types of business loans.

The loan origination process evaluates an individual’s or business’ financial information, determining their creditworthiness, and deciding whether to approve or deny a loan based on this information. This process typically follows five routine steps:

  1. Pre-qualification: During this step, the borrower provides basic information about themselves and their financial situation to the lender. Based on this information, the lender may give the borrower an estimate of the loan amount for which they could be eligible.
  2. Application: If the borrower decides to proceed with the loan process, they will complete a loan application. This step typically includes more detailed information about their financial situation, such as income, assets, and debts.
  3. Evaluation: After the loan application is submitted, the lender will review the borrower’s financial information and evaluate their creditworthiness. This involves proprietary underwriting criteria and third-party data sources to verify the information provided in the application, and applying customized credit scoring models to assess the borrower’s credit risk.
  4. Approval: If the borrower’s loan application is approved, the lender will provide a loan offer, which will include the terms and conditions of the loan, such as the interest rate, repayment period, and any fees or charges.
  5. Disbursement: If the borrower accepts the loan offer, the lender will disburse the loan funds to the borrower, by depositing the money into their bank account or issuing a check.

Traditionally, this process is very manual, requiring trips to the bank or long phone calls with a loan specialist. Today, using intelligent process automation platforms like Decisions, almost the entire process can be streamlined for borrowers and lenders. 

There are several benefits to using an business process automation platform for originating and servicing loans:

  1. Improved efficiency: A rule engine can automatically evaluate loan applications and make quick, reliable decisions based on predetermined criteria, freeing time for underwriters to focus on more complex tasks. This accelerates the loan origination process, by eliminating processing costs for unqualified borrowers, reducing the time it takes to deliver a loan decision to qualified borrowers, and enhancing operational efficiency. 
  2. Increased accuracy: A rule engine can be programmed to follow specific rule sets when evaluating loan applications, ensuring that decisions are made consistently against approved criteria. This reduces unintentional variability which improves the overall accuracy of the loan origination process.
  3. Improved customer experience: Automating the loan origination process with a rule engine improves the customer experience by providing borrowers with convenient applications, faster loan decisions, and streamlined loan documentation and closing.
  4. Enhanced compliance: A rule engine can be used to ensure that loan origination decisions are made in compliance with relevant regulations and policies. This largely reduces the risk of legal or regulatory issues that can arise during the loan origination process.

Using an intelligent process automation platform for loan origination can help to improve the efficiency, accuracy, customer experience, and compliance of the loan origination process. If you would like to learn more about how automation software can optimize your loan process, contact us at sales@decisions.com.


Gordon Jones
Gordon Jones has founded and sold three companies with the last built using Decisions technology. He has also led factories and large IT implementations both in the US and in Asia, where he lived for over seven years.

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