Best Auto Loan Origination Automation Tools for Improved Customer Service

Auto loan origination automation tools for better customer service


When buying a car, people want to get from finding the car they want to purchasing it as quickly as possible. Now, people can shop for and buy a car without entering a lending institution or dealership. New lending technologies are the main reason behind this shift. They enable people to do things the way they want by providing the flexibility of resources, the scalability of workloads, and data reliability. While auto loan origination automation tools are familiar to the lending industry, the latest advancements in tech are quickly leaving legacy systems behind. 

Customer Service Expectations in the Lending Industry


The auto lending industry has always been competitive, and the industry has seen a dramatic increase in competition over the last few years. 

Since the start of the pandemic, the need for enhanced online lending has continued to grow. This has forced lenders to increase their online operations and expand their mobile capabilities. 

According to recent research

  • 78% of people who bought a car online found it a highly satisfying experience
  • 62% of online buyers had purchased a car online before
  • Cost and time savings are the leading reasons people give for buying a car online

On top of the growing demand for a greater digital footprint, lenders are also dealing with a lack of vehicles caused by the global chip shortage, driving competition even higher. As a result, top lenders are looking for enhanced loan origination automation tools to help them maintain an edge over their competitors.

Enhanced Auto Loan Origination Automation Tools


Choosing an LOS can be overwhelming with so many details to consider, from the platform’s capabilities to how configurable they are to your internal lending processes. Let’s take a close look at the top features that are not only necessary but also provide extra customer service value.

Top 7 Auto Loan Origination Automation Tools for Better Customer Service
1) Cloud-based System With a cloud-based system, there is no need for lenders to provide the hardware and maintain the software needed for the loan origination process. Cloud-based loan application tools enable lenders to evaluate and process applications faster.
2) Alternative Data Alternative credit data sources allow lenders to identify new lending opportunities, make better-informed lending decisions, and improve overall portfolio performance.
3) Trended Credit Data Trended credit data gives lenders better insights into a potential borrower’s financial situation.
4) Auto Structuring Auto structuring accelerates decisioning response time and increases loan captures, giving lenders a major competitive advantage.
5) Configurable Software Configurable loan origination software enables lenders to react to changing market conditions sooner than their competitors.
6) Document Data Capture Document data capture makes applying for a loan easier for an applicant, leading to higher loan volumes for the lender.
7) Automatic Boarding Automatic boarding of a funded loan to a servicing system on an end-to-end platform means borrowers will be with the lender for the entire loan lifecycle.

Cloud-based Systems

A cloud-based system eliminates the need for lenders to provide hardware and maintain software for loan origination. Historically, loan origination required paperwork, even when some processes were automated. But, with a cloud-based lease or loan application platform, lenders can begin the evaluation process more efficiently. The application process can be online and streamlined. A lending decision can be made in seconds without the time-consuming process of waiting for paperwork or for something to be keyed into a legacy system. Offers can be paperless and sent immediately through text or email.

A modern loan origination system ensures an easy application process and a reduction in human error by:

  • Accepting online loan or lease applications on a desktop, laptop, tablet, or smartphone
  • Guiding borrowers smoothly through the process with display logic, masking, validation, and rules for improved accuracy
  • Accepting applicants’ essential document submissions, such as identification and proof of income, while filling out their application.

A completely digital lease or loan origination process makes it easier for applicants to apply online. And via a mobile device, an application can be submitted anytime, from anywhere. Lenders extending these digital capabilities to dealerships can differentiate themselves from lenders still bogged down with paper-based origination processes. 

Alternative Credit Data

Alternative credit data sources allow lenders to identify new lending opportunities, make better-informed lending decisions, and improve overall portfolio performance. Alternative data can include:

  • Rental records (location, length of lease, payment history)
  • Income and employment
  • Driver’s license and driving records
  • Real estate ownership and liens
  • Utility payment records (electricity, gas, water, mobile phone)
  • Bank accounts

When you add alternative data to traditional credit scores, you get a more in-depth picture of a potential borrower’s creditworthiness. For those applicants who are in the subprime or near-prime level, this can mean a lease or loan approval that may have otherwise been declined. For lenders, this means you can make better decisioning based on the complementary information of both data sources. 

Trended Credit Data

Another loan origination automation tool for better customer service is trended credit data, which includes up to 30 months of an applicant’s payment history, such as:

  • Balances
  • Actual payments that are made
  • Minimum payments due
  • Any past-due balances

Trended credit data will reveal a detailed view of recent financial behavior, where traditional bureau scores provide insight into their overall financial standing. This can be very beneficial for applicants in the subprime category who have recently made consistent payments and are better candidates than their bureau score demonstrates. Trended credit data gives lenders better insights into a potential borrower’s financial situation. 

Auto Structuring

Auto structuring is one of the greatest tools for auto lenders; it accelerates decisioning response time and increases loan captures. In best cases, it gives lenders a significant competitive advantage.

With auto structuring, applications that fall within and slightly outside the boundaries of a lender’s credit policies get an instant decision and offer. Auto structuring attempts to structure the best deal by working within the constraints of the lender’s policies and the applicant’s attributes.

When the applicant falls outside of established credit policies but is not an auto-decline, then auto structuring attempts to find a deal structure that is mutually acceptable to the lender and the applicant. For example, alternatives proposed by auto structuring could be:

  • Offer conditional approvals to increase the probability of loan capture
  • Extend the term length of the loan
  • Configure offer to include multiple deals
  • Increase the down payment and lower the interest rate
  • Decrease the monthly payment and extend the payments

Auto structuring accelerates the decision time, helping lenders respond to applications in seconds. Applicants who submit their applications online receive the nearly instant responses they expect. It also allows dealers to respond quickly and close sales. This means that customers have shorter wait times and a better customer experience in a dealership.

Configurable Software

Configurable loan origination software allows institutions to react to changing market conditions sooner than their competitors. Unlike outdated legacy systems that require costly, time-consuming, and programming expertise to make even small changes, cloud-based software can be updated in minutes, and modifications can be made by lending professionals using the configuration menus. 

These modern systems are agile and can be changed to keep up with industry trends and consumer demands. They also allow lenders to provide better customer service through mobile technologies, reduce wait times, and improve decision accuracy.

Document Data Capture

Document data capture makes applying for a loan easier for an applicant, leading to higher loan volumes for the lender. To truly gain from automation, however, a lender’s virtual interface for borrowers must adapt to avoid siloing information, allow for straightforward communication, and ease document collection. Further, automation assists with quickly and thoroughly processing applications, verifying identities, performing credit checks, and calculating appropriate lending terms.

Perfecting document capture involves digitally converting images – including typed or written text – through optical character recognition (OCR). By reading and recording the applicant’s data, OCR speeds the steps leading to approval or denial. This saves time and labor.

Automatic Boarding

Automatic boarding of a funded loan to a servicing system on an end-to-end platform means borrowers will be with the lender for the entire loan lifecycle.

When applicants first contact a lender, loan origination automation tools should optimize the borrower experience and help the lender build borrower trust. That automation and trust should extend throughout the life of a lease or loan. 

However, this won’t happen if the lender’s servicing system doesn’t let the borrower interact with how they choose or when they need it or if there are problems with the onboarding process. If initial contact is less than satisfactory, drop-off rates will increase, and keeping that customer throughout the life of the lease or loan or as they go into another purchase decision will get more difficult.


Selecting The Best Lease or Loan Origination Platform


The best loan origination platform allows lenders to create a system with the necessary capabilities. With modern systems, lenders don’t have to be limited by the platform or mold their operations to match the system. As a lender, you understand your unique value in the industry, and you need a platform that will allow you to bring your differentiation to the table. 

When you can start with a core system with essential functions and then build with flexible and configurable pieces, you can fully utilize your secret sauce. For example, suppose you’re a direct lender who decides to transition to indirect lending or an auto lender transitioning to a power sport lender. In that case, you need a platform that will easily allow you to evolve your operations. A platform’s capabilities will dictate how flexible and scalable you are as a lender, and your platform should grow with your business.

Choosing which LOS tools are right for your business can be challenging. Lenders want to select the best tools to support customers’ needs concerning loan origination. Automation tools, more importantly, provide a better customer experience. For this reason, it’s crucial that lenders carefully choose a system that offers both flexibility for their business and value for their customers, with which defi SOLUTIONS can help.


Getting Started


defi SOLUTIONS is redefining loan origination with software solutions and services that enable lenders to automate, streamline, and deliver on their complete end-to-end lending lifecycle. Borrowers want a quick turnaround on their loan applications, and lenders want quick decisions that satisfy borrowers and hold up under scrutiny. With defi ORIGINATIONS, lenders can increase revenue and productivity through automation, configuration, and integrations and incorporate data and services that meet unique needs. For more information on auto loan origination automation tools, contact our team today and learn how our cloud-based loan origination products can transform your business.

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