How to find the right Loan Servicing Software
Learn more from our team about Loan Servicing pricing, features and benefits in our Loan Servicing Buyers Guide
Updated on July 17, 2024
Loan servicing software is a specialized tool that helps lenders automate post-disbursement operations such as collections, collateral tracking, and amortization. The tool also helps manage customer requests, information, and queries through a customer portal. Many of these tools are available as a module or as an integrated part of loan management or origination solutions.
Capterra’s researchers use a mix of verified reviews, independent research and objective methodologies to bring you selection and ranking information you can trust. While we may earn a referral fee when you visit a provider through our links or speak to an advisor, this has no influence on our research or methodology.
Capterra carefully verified over 2 million reviews to bring you authentic software and services experiences from real users. Our human moderators verify that reviewers are real people and that reviews are authentic. They use leading tech to analyze text quality and to detect plagiarism and generative AI. Learn more.
Capterra lists all providers across its website—not just those that pay us—so that users can make informed purchase decisions. Capterra is free for users. Software and service providers pay us for sponsored profiles to receive web traffic and sales opportunities. Sponsored profiles include a link-out icon that takes users to the provider’s website. Learn more.
Sponsored: Vendors bid for placement within our listings. This option sorts the directory by those bids, highest to lowest. Vendors who bid for placement can be identified by the orange “Visit Website” button on their listing.
Highest Rated: Sorts products as a function of their overall star rating, normalized for recency and volume of reviews, from highest to lowest.
Most Reviews: Sorts listings by number of user reviews, most to least.
Alphabetical: Sorts listings from A to Z.
Increase revenue: Loan servicing solutions automate payment tracking and collections which directly impacts revenue. The tool notifies loan servicers about outstanding payments or approaching due dates and facilitates follow-ups, online payments, and offline collections. The efficiency that is gained helps reduce delinquency which in turn increases revenue.
Ensure accuracy: Ensuring accuracy in calculating repayment, interest, and the principal amount is essential for lenders. The tool ensures accuracy by automating the complex calculation involved in identifying these amounts.
Reduce turnaround time: The tool helps reduce process turnaround time by automating loan servicing tasks which take up significant time when handled manually. Some of these tasks include posting late payments, producing and sending notices of default, and calculating penalties and fees.
Amortization: Prepare amortization schedules based on factors such as payment frequency, loan balance, interest rate, and compounding frequency.
Collections management: Schedule and automate payment collections. Collect payments online or manage payments coming through cash collection stores.
Borrower management: Manage information about borrowers, guarantors, and co-borrowers through a customer portal. Share payment alerts, record financial information, and manage customer queries or requests.
Collateral tracking: Track collaterals and supporting documents across lines of credit. Segment collaterals into active or inactive based on extensive reports.
Most products in the market are priced on a per user, per month basis and can be divided into three pricing tiers based on their starting price.
Price ranges*:
$3 - $20
$20 - $65
$49+
*The pricing included is for the entry-level/lowest-priced offerings found on vendor websites on July 18, 2019. These ranges correspond to the 25th, 75th, and 100th percentile of the pricing information gathered from the vendor websites of sample products.
The above list summarizes pricing for the base plans of most products. An enterprise or premium product, that is priced higher, may include additional features such as loan origination and credit bureau integration.
Conduct needs assessment: The software will have users with diverse needs hailing from different departments and hierarchy levels. A user from the finance department will use the software for a different purpose than a collections agent. Therefore, it will be beneficial to assess the needs of all users, or at least those of the key stakeholders, and select a software that caters to a majority of these needs.
Check for third-party integration: A tool that supports third-party integration would be a plus if the business uses specialized tools for loan origination or for different loan types such as mortgage or commercial loans. Integrating the loan servicing solution with these tools would help leverage data in these systems, thus reducing data duplication.
ML for accurate loss mitigation: Machine learning (ML) can help lenders make accurate loss mitigation decisions through automation. These decisions may include rejecting or approving loan modifications, forbearance agreements, and repayment plans.
ICR for servicing data extraction: Intelligent character recognition (ICR) can help extract useful information from loan documents. The technology can identify the final version of loan documents from a loan package, extract relevant data from these documents, and use it to automate the servicing workflow.
Sources
Products evaluated for the pricing calculation were taken from Capterra’s directory. The pricing ranges exclude freemium versions of the products. The features highlighted were identified based on their relevance and the percentage of products in Capterra’s directory that offer them.
The following sources were used for this document:
1. Fintech startup launches AI platform for mortgage loss mitigation (accessed on March 4, 2020)
2. LoanComplete from Fiserv leverages AI, RPA for efficiency (accessed on March 4, 2020)
