The process of applying for a new loan by an individual and the lender takes the step of processing such a request may described as the loan origination process. The lender in this case may be a bank or any other financial institution. 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 loan origination process may be determined by the need for taking a loan. The loan origination process for a mortgage, for example, may be far different from the loan origination process of a business loan.
There are different channels which may be utilized for the purpose of accomplishing the loan origination process. Among the common channels which are used for the purpose of completing the loan origination process may be the use of brokers, the agents, self-service and also through the online application. Most of the financial institutions are today leveraging on the use of the loan origination systems. 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. The system will also carry out the documentation for the origination process and then approve or disapprove the loan application. Where the loan application is honored by the loan origination system, what then follows is the disbursement of funds to the borrower. There are the instances when the loan applications which has been made by the borrower will not be made and in such a scenario the loan 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. The system gives a financial institution a chance to render it services with minimal costs. The banks will experience reduced costs in most of the cases. The fact that the origination process is also automated makes the decision making process to also be faster. Process of monitoring the approved loans is also made faster. This is so since the systems also provides the real time solutions for loan monitoring. The loan origination system will also bring the benefit of transparency, service improvement to the customers and increased flexibility.