Loan approval and underwriting are some of the most important processes for a lender. By having an efficient and consistent way of handling it can minimize risk while maximizing the value of every loan, lease, or credit line that a lender offers. As a result, painstaking effort goes into deciding which loans will be approved and the terms that will be offered. An automated loan approval system serves as a modern way to simplify the process.
Although, an automated loan approval system is about more than just making things easy for lenders. It certainly serves this purpose well, but it can also increase conversion rates for lenders looking to grow their book of business.
Automated loan approval systems do this by achieving the following:
- Faster response times
- Easier pre-approvals
- Less friction for the applicant
Let’s find out how each of these can lead to an increase in conversion rates.
Automated Loan Approval System Means Faster Response Times
One of the issues with manual underwriting is that it is often a slow, laborious process. Traditional methods typically involve manual paper records or spreadsheets that an underwriter then looks over to decide what offer should be available for an applicant. This leads to hours or even days between the application and the offer.
These long response times make each individual deal take longer and give consumers more time to back away from a deal and opt for an offer from a lender that was able to respond to them faster.
An automated loan approval process solves this problem by allowing lenders to input their underwriting guidelines and let a software platform run each application against those guidelines almost instantaneously. This means that most applicants receive an offer mere moments after submitting their information, making it more likely that the lender can catch them while they are actively shopping.
As a result of this more streamlined process, pre-approvals get easier as well. By having an automated system, customer data can be easily plugged in for pre-approval opportunities. This is especially true for existing customers that have already submitted their credit information for other offers.
Pre-approvals are a powerful marketing tool, and they do a great job of opening consumers’ eyes to the kind of buying power they can obtain with a quality lender. The automation of the underwriting process makes it that much simpler to reach out periodically and turn more leads into customers.
Less Friction For the Applicant
Credit applications can be an aggravating process for consumers at times. There are several different ways that traditional loan approval processes can involve friction that may put customers off, such as:
- Multiple documents to fill out that are often redundant.
- Repeat data input due to lack of retention on the lender’s side.
- Higher likelihood of incorrect inputs as a result of the extra forms.
- Delays in response time as underwriters review.
All of these can make the credit application process more cumbersome for applicants, which makes getting financing feel like a hassle. As a result, consumers may hesitate to go through the process a second time, or accept pre-approval offers, since their initial experience left a bad taste in their mouth.
An Automated Loan Approval System With Skeps
Skeps offers the only end-to-end POS financing platform that can help lenders automate any step of their lending process. We partner with banks and lenders to connect them to consumers with cutting-edge fintech software. Our platform can serve consumers no matter how or where they interact with their lender. Our top-of-the-line data security and analytics ensure that data is retained and protected to create the best possible experience for both new and repeat clientele.