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 bank or any other financial institution may in this case be seen as the lender. The process of loan origination will basically include all the steps especially from when the loan application is made to when such a loan is actually honored and disbursed. Dishonoring of a loan request made by an individual may also be included in the steps of the loan origination process. The process of loan origination will in most of the cases depend with the need for such a loan. The loan origination process for a mortgage, for example, may be far different from the loan origination process of a business loan.
For the purpose of completing the loan origination process, there exist different channels which may be used for such a reason. The most common types of channels may be the agents, brokers, self service and the online application. Today, the use of the loan origination systems has been leveraged by most of the financial institutions. Supporting the process of applying for the loans is the reason behind the development of the loan origination systems. The various tasks which may be carried out by the loan origination system may include the process of identifying the borrowers of funds, the processing of the information related to such applications and vetting the borrowers so as to establish their credit worthiness. 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. Where the loan application has not been honored by the loan origination system, the disbursement of funds will not be made to the borrower.
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. Through the system, the financial institutions such as the banks are able to able to provide the loan services without incurring the extra cost. To the side of the bank, the costs are in most of the cases cut. Since the origination process is automated, the process of decision making is faster. The process of monitoring the loans which have been approved is also efficient. This is so since the systems also provides the real time solutions for loan monitoring. Other benefits may include the increased transparency, flexibility and best customer service due to improved response time.