For anyone looking to set up a loans company or become a lender, you will usually have a software behind the scenes to power, underwrite and store all the applications.
Companies will either build a loans software in-house or typically use a licensed product and pay a set-up fee and then a monthly fee thereafter.
Loans management softwares are usually very customisable, so you can add your own credit scoring and integrate your own technology, according to your requirements. You will commonly have a portal where you and your staff can login, make decisions, fund loans, decline loans and more.
What is included in a Loans Management Software?
- Front-end application form
- Online portal where you can monitor applications
- Underwriting and scoring
- Funding processes
- Data collection
- Loan documents and legals
- Make notes on each case
- Automatic emails and SMS known as ‘triggers’
- Fraud prevention
- Security and protection of information
TechRound’s Recommended Loans Management Softwares
1. Optalitix – https://www.optalitix.com/
Based in Camden, Optalitix is an innovation company of 20 staff, working with data and analytics and powering the back-end for a number of companies offering loans and finance, including start-ups and challenger banks.
The company has a full suite of products, which includes a full Leads Manager, Acumen system to incorporate any model into your system and Underwrite, a portal that provides a simple workflow for your all your applications coming in and how they are progressing.
Optalitix are a data-driven company and they will be able to provide powerful insights into your data and help you scale your loans business, using AI or machine learning if there is scope to do so.
Here you have the option of a combination of a licensed product and bespoke system for your company.
Already working with other lenders, they will be able to provide solid advice if you are new to the industry and looking for direction.
2. Laps IT – http://www.laps-it.com/
LAPS stands for Loan Application Processing System and is based in Fareham, South England.
LAPS are one of the most established software companies in the payday and short term lending industry and have been operating for over 10 years, offering the full service from loan application to repayments and a one-touch integration with merchant account gateways (so you can make payments to customers like individuals or businesses) and the credit reference agencies like CallCredit.
The entire application process is nicely automated, including scheduled collection payments from debit cards and the use of third party services for authorisation, verification and credit searches.
Their integration allows an easy connection for those using affiliate marketers and pingtrees and you to create custom links and track them for each application. Each lender gets a complete audit trail so they can locate any notes and data each individual customer transaction.
To prevent fraud, they have tools to prevent multiple loans being authorised and high levels of fraud risk.
3. Anchor – https://www.anchor.co.uk/
Wales-based Anchor are more specialist in working with guarantor lenders and companies offering instalment credit.
Anchor is made up of their Sentinel and Journeyman systems, whereby Sentinel is made up of five models and provides the requirements for loan proposals, administration, direct debits, financial accounts and collections.
The Journeyman is a little different and enables collections by other agents and is used for revolving credit sales, hamper sales, and video and TV rental, as well as use by credit unions.
Both Sentinel and Journeyman can be managed on a user’s premises or accessed as a hosted solution over the web.
4. BrightOffice – https://www.brightoffice.co.uk/
Popular Lancashire-based BrightOffice offer a cloud-based solution to loan management software. The BrightOffice proposition acts more like a CRM (customer relationship management) and allows companies to as brokers or lenders and work as multiple providers – so perfect if you have sub brands or sister companies.
The application offers standards-based connectivity (XML) with other systems to handle the exchange of information and documents.
The company uses secure online document storage for easy liaisons with solicitors, banks and underwriters and it is all stored in the cloud. The audit trail allows all lending activities to be tracked and enable good compliance with the FCA’s practices of responsible lending.
The BrightOffice software can be white-labeled by the lender to correlate with their brand look and colours. Additional features including marketing tools using email, conventional post and mobile messaging (SMS) to capture new and existing customers.
5. Build Your Own Loans Management Tool
There is a business case for building your own loans management software, since this allows you to react quickly and respond to the changing nature of your business. You can make your own tool completely unique and customised for your business – and even if you are planning to be a lender, you always have the option of licensing the product out to other companies too.
Building your own loans software will come with responsibilities, because you will be responsible for managing and holding the data yourself and responding to any potential risks and security threats.
How Much Does a Loans Software Cost?
The products mentioned above are likely to cost around £50,000 to £100,000 to get you up and full running, based on a set-up fee, integration fee and ongoing monthly management fees.
Some companies will have different pricing which could be based on the volume of applications you generate each month and also the number of users and logins you require on your side.
The cost of building a software yourself can be quite a lot higher since you may require several in-house developers who are on salaries similar to £50,000+ per year and you will have to pay all the costs involved with storage, data and insurance.