The defi Team Credit Unions, defi INSIGHT, Remarketing, Servicing Systems

Lenders heavily rely on borrowers’ willingness and ability to repay loans in order to generate profits. To assess these factors accurately, lenders require reliable information and the ability to analyze it effectively. Without truthful data and robust analysis capabilities, lenders are left to chance when approving loans. However, by understanding and tracking loan servicing KPIs (key performance indicators), lenders can make informed decisions.

Loan servicing KPIs play a crucial role in this process. These KPIs shed light on why borrowers miss payments and can even help identify events that lead to defaults. By collecting information throughout the end-to-end lending process, lenders can swiftly respond to metrics revealed during customer interactions, ultimately improving the overall performance of their loan portfolios.

Tracking and Understanding 5 Essential Loan Servicing KPIs

Loan servicing KPIs provide crucial insights into the performance of loans during the servicing phase. By tracking and analyzing these KPIs, lenders can gain valuable information to optimize their loan portfolios and enhance profitability. Let’s explore the five essential loan servicing KPIs and how to effectively track them:

Delinquency RateThe delinquency rate measures the percentage of loans that are past due or in default. By monitoring this KPI, lenders can identify borrowers who are experiencing difficulties in making timely payments. Tracking the delinquency rate enables proactive intervention and appropriate strategies to mitigate losses.
Loss SeverityLoss severity refers to the extent of financial loss incurred when a loan defaults. This KPI helps lenders assess the impact of default on their overall loan portfolio. By analyzing loss severity, lenders can refine their risk management practices, including underwriting standards and collateral evaluation, to minimize potential losses.
Cure RateThe cure rate measures the percentage of delinquent loans that return to a current status. This KPI indicates the effectiveness of loss mitigation efforts and borrower repayment strategies. Monitoring the cure rate allows lenders to gauge the success of their loan workout programs and identify areas for improvement.
Customer SatisfactionCustomer satisfaction plays a vital role in loan servicing. This KPI assesses borrowers’ satisfaction levels with the lender’s customer service, communication, and problem resolution. By collecting feedback through surveys or other channels, lenders can identify opportunities to enhance the borrower experience and build long-term relationships.
Servicing Turnaround TimeServicing turnaround time measures the average time it takes to complete various loan servicing activities, such as payment processing, document handling, and account updates. Tracking this KPI enables lenders to identify bottlenecks and streamline their processes to provide faster and more efficient service to borrowers.

Effective Tracking Practices:

To track loan servicing KPIs accurately, consider the following best practices:

  • Leverage technology: Utilize loan servicing software to automate data collection and generate real-time insights.
  • Set clear targets: Establish specific and measurable goals for each KPI to track progress and performance effectively.
  • Regularly review and analyze: Monitor KPIs on a consistent basis and conduct regular reviews to identify trends, patterns, and areas requiring improvement.
  • Collaborate across teams: Foster collaboration between loan servicing, customer support, and other teams to ensure comprehensive tracking and analysis of KPIs.
  • Continuously improve: Adapt tracking methodologies as needed, refine processes, and implement changes based on insights gained from KPI analysis.

By focusing on these loan servicing KPIs and implementing effective tracking practices, lenders can optimize their loan portfolios, minimize risks, and deliver exceptional service to borrowers.

Leverage Technology to Meet Your Loan Servicing Needs with defi SERVICING

Loan servicing is a critical aspect of managing a lending business, and tracking key KPIs specific to loan servicing is essential for success. By utilizing advanced technology and software platforms, such as defi SERVICING, lenders can effectively monitor loan servicing KPIs to optimize their operations and drive business growth.

Our intuitive configuration, rules-based workflow routing, and scripting tools allow your customers to choose how and when to contact you, so you can deliver the kind of satisfaction that keeps them coming back.

With defi SERVICING, you can take control of your four major servicing functions:

  • Account administration for general ledger maintenance, payment posting, and account closeout and sale functions
  • Collateral management to handle titles, end-of-term lease and balloon functions, and vehicle remarketing
  • Customer care to perform consumer fulfillment, complaint capture, and welcome calling
  • Default management with rules-based queuing and automated workflow tools

If you are looking to outsource your loan servicing process, we can help too. We offer defi MANAGED SERVICING, which will reduce your budgetary expenses while improving auto loan and lease servicing, lease disposal, and leased vehicle disposition using the latest artificial intelligence and automation technology. Whether you want to manage the process yourself or hand it over to an experienced team, we’ve got you covered.

Getting Started

defi SOLUTIONS offers solutions for a lender’s complete loan or lease lifecycle, including both direct and indirect lending. Credit unions, captives, banks, and finance companies are all partnering with defi to utilize the company’s market-leading solutions that help lenders exceed borrower expectations. From digital engagement throughout the lending process, defi sets new standards for flexibility, configurability, and scalability in loan management systems, originations, servicing, and managed servicing. defi SOLUTIONS has the backing of Warburg Pincus, Bain Capital Ventures, and Fiserv. For more information on defi MANAGED SERVICING, contact us today.

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