Loan Management in Financial Service Industry

Loan Management and Financial Services are the economic services which are provided by the finance industry which covers a broad range of businesses that manages money including credit unions, banks, credit card companies, insurance companies, accountancy companies, stock brokerages, investment companies including government-sponsored enterprises.

Financial Services include the following:

• Banking– In this type of services an individual can deposit his or her money and can get return in the form of interest & also borrowers can get loan by paying interest to the bank periodically
• Insurance– This type of financial services enables an individual or company to purchase insurance policies like life insurance, fire, marine, health and general insurance which ensures that person in the event of an accident it can claim the amount of loss from the insurance company.
• Stock Market– One can invest his or her funds into stock market also where one gets dividends and also capital appreciation if one makes right investment decision than a return from equity markets are much greater than that of fixed deposits kept in banks.
• Treasury or Debt instruments– Under this one can invest his or her money into government bonds and also debt instruments of private and public firms.
• Wealth Management – There are many firms where one can just keep their money and then these companies invest money across different assets classes like commodity, derivatives, money market, currency etc… in order to generate superior returns for their clients.
• Mutual Funds– These funds track asset class and generate returns accordingly so a debt fund will track returns of debt and money market, an equity mutual fund would give returns according to a performance of the stock market and so on.
• Tax consultants and audit firms– These organizations help people in determining their tax liability, advising their clients on how to save tax and also filing their tax returns on time.
• Loan management: Loan management services are mostly provided by the financial institutions as per the customer’s requirement. It includes Home Loan, vehicle loan, business loan, personal etc.

Loan Management

Loan Management is a common business requirement in today’s competitive world. Loan management helps to design a loan and manage the day to day operations related to it. Loan management can also be used by companies which deal in the products which are most expensive.

• Benefits of Loan Management:

  • Offer flexible payment schedules to customer
  • Create loans with amortization schedule with the breakup of principal, interest, tax, due date etc.
  • Manage bad debt provision for each loan
  • Receive loan payment partially or in full
  • Refinance a loan by selling the loan to an external institute

• Purpose:

The Loans Management module permits you to manage both merely structured loans such as consumer loans, and complex loans, such as mortgage loans.

• Integration:

Loans Management is fully integrated which allows measuring the effects of loan activities on your liquidity or interest rate risk directly. Cross-application functions, such as the Information System provider provides you with a comprehensive overview of the business plan relationships maintained with your loan partner.

• Products Offered:

The following product categories are available in the system for representing the various loan forms:

• Mortgage loans
• Borrower’s note loans
• Policy loans
• General loan (for managing any other loans)
• Consumer loans
• Installment loans

• Positions Management:

It offers functions for processing existing contracts such as changes in contract, business operations like charges, payoffs, changes in product category, deferral and capitalization of overdue items, automated generation of roll over for mortgage loans

• Integrated Financial Accounting:

The accounting processes for loans are maintained within Loans Management. There are manual and automatic functions for generating debit items, and functions for transfer postings and position valuation. The relevant posting information is transferred to Financial Accounting via an interface. Payments system are enabled to assign to an appropriate customer account are posted to rejection accounts, while advance payments and overpayments are posted to a customer account. You can then process these payments manually using the payment post-processing function.

• Reporting:

The information system allows you to monitor deadlines and evaluates positions and revenues. It gives you the detailed overview of your partner’s loan commitment. You can use the drill-down reporting approach to make use of predefined standard reports and to generate and edit your own reports.