J.D. Power reports that nearly 84% of new-vehicle buyers in 2018 arranged financing through a dealership. For lenders, that underscores the importance of integrating their loan origination system LOS with leading dealership management systems (DMS) such as RouteOne and Dealertrack, or alternative application sources like CUDirect, and Corelane Technologies. The immediate benefit is increased lending opportunities.
For lenders with legacy loan origination systems, integration with any DMS can be a costly and protracted custom programming project. Although integration certainly improves lending opportunities, it’s likely that a legacy LOS will still lack many other functions/capabilities such as digital applications, decision rules, and econtracts. Instead of retrofitting legacy systems, upgrading to a modern LOS with integrated DMS is a better investment.
Pre-integration With Leading DMS
The best LOSs are pre-configured with DMS access. There’s no lengthy, costly integration process. Lenders use menus to establish connections between the LOS and their DMSs of choice. That improves the probability of capturing more loans. As additional dealerships adopt these systems, a lender’s network of dealerships automatically grows.
Some of these systems can streamline loan origination by ensuring all applications match the lender’s portfolio requirements. No need to waste time on applications that are likely to fail credit policies. Direct integration with these systems streamlines all steps of the loan origination process and communication between dealer and lender.
Rapid Response to Loan Applications
Direct integration with leading DMSs lets lenders respond to applications quickly That’s a competitive advantage over lenders who receive applications from dealers by fax or mail. Using decision rules, a lender can immediately evaluate applicant attributes and determine matching credit policies. Based on the evaluation, a lender can structure a deal for applicants with stellar credit, issue an auto-decline for applicants who fail credit policies, or offer alternative deal structures for borderline applicants, all in seconds. Direct integration with DMS and digital loan application processes speeds all steps of the loan origination process—giving you a better chance to capture loans initiated at dealerships.
Advantages of Paperless Loan Applications
A modern LOS streamlines loan origination by supporting an entirely digital application process. Applicant information is captured digitally at the dealership (no paper, copying, faxing, or posting required). Applicant documentation such as drivers’ licenses, proof of residence, employment verification, and income statements are also captured and transferred to the lender digitally. This fully-digital application makes for rapid processing and decisioning by the lender. The fully-digital process also helps dealerships, since prompt loan application answers can help close sales.
eContracts are Convenient and Secure
Lenders can accelerate deal closure through the use of econtracts. This is another benefit of a completely digital loan origination process. With econtracts, a lender sends a digital contract (no paper) that can be reviewed online: Desktop, laptop, or mobile device, electronically signed, and returned to the lender in minutes. The entire process is secure. It provides multiple identity authentication options for signers and automatically retains an electronic copy of the contract for future reference or compliance requirements.
LOS Integrated with Leading DMS Benefits All Parties
Upgrading to an LOS tightly integrated with DMSs or alternative application sources benefits everyone in the loan origination process. Lenders increase the volume of loan applications received and the probability of capturing loans. Dealers benefit by working with lenders who rapidly respond with favorable deal structures to help close the sale. For consumers, streamlined financing means less time at the dealership, and a better purchasing experience.
defi SOLUTIONS‘ loan origination solutions are pre-integrated with leading dealership management systems to increase lending opportunities, accelerate financing decisions, and provide a better consumer experience. Take the first step toward upgrading your LOS by contacting our team today or registering for a demo of defi LOS.
Get in touch with us today and get a demo!