Selecting Auto Loan Origination Automation Tools for Better Customer Service

Loan Origination Automation: A Business Case for Adopting Better Lending Technology

When it comes to buying a car, people want to get from finding the car they want to purchasing it as quickly as possible. The days of spending hours and hours at a dealership are becoming a thing of the past. Now, people can shop for and buy a car without ever stepping foot into a lending institution or dealership. Cloud 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 the reliability of data.

While loan origination automation tools are not new to the lending industry, the latest advancements in tech are quickly leaving legacy systems behind. Not just because they streamline the entire lending process, but because they can keep up with the ever-growing needs of lenders and their customer service demands.

Customer Service Expectations in the Lending Industry

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

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

Here’s a look at current borrower demands according to recent research

46% of people want to buy online for convenience and ease.

35% of people want to buy online to get their car quicker.

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 Loan Origination Automation Tools

Choosing a 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:

A configurable LOS is the best way to make your business more efficient and improve every aspect of the lease or loan process. Not only for your bank and its employees but also for the people you serve.

Cloud-based Systems Easily and Accurately Capture Information 

Historically, loan origination required paperwork, even when some of the processes were automated. But, with a cloud-based system lease or loan application, lenders can begin the evaluating 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 documents 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 who also extend these completely digital capabilities to dealerships can differentiate themselves from lenders still bogged down with paper-based origination processes. 

Alternative Data for More Lending Opportunities

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. This would include up to 30 months of an applicant’s payment history, including:


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 what their bureau score demonstrates. Trended credit data provides lenders with better insights into a potential borrower’s current financial situation. 

Auto Structuring for Near-Instant Decisions for Qualified Applicants

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 major 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:

Offering conditional approvals to further increase the probability of loan capture.

Extend the term length of the loan.

Can be configured to offer 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 that submit their applications online receive the nearly instant responses they expect. It also helps dealers respond quickly and close sales. This means that customers have shorter wait times and a better customer experience in a dealership.

Configurable Software for Keeping Up With Consumer Demands

Cloud-based 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 in order to make even small changes, cloud-based software can be updated in minutes, and changes can be made by lending professionals using the configuration menus. 

These modern systems are agile and can be changed as needed 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 decisions’ accuracy.


Selecting The Best Lease or Loan Origination Platform

The best loan origination platforms allow lenders to create a system with the exact capabilities they need. With modern systems, lenders don’t have to be limited by the platform or have to 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 basic functions and then build with flexible and configurable pieces, you can fully utilize your secret sauce. For example, if you’re a direct lender who decides to transition to indirect lending, or an auto lender transitioning to a power sport lender—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.

Getting Started

defi SOLUTIONS provides configurable loan origination systems, loan management and servicing, analytics and reporting, and a wide range of technology enabled BPO services. If you’re struggling with the limitations of your current loan origination automation tools, take the first step in realizing the benefits of modern technology. Contact our team today or register for a demo.

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