By Marilee Floener, Revolving Loan Servicing Software Director
1. Incorrect loan terms entered in the software. Data entry mistakes, such as interest rate, daily vs. amortized interest computation, late fees and other fees to be collected from your client’s payments, can have a serious impact on repayment calculations.
2. Remiss in entering activity on a timely basis. If loans and their subsequent activity are not entered as they occur, this can affect accuracy of reports submitted to funding sources and Board of Directors, loan balance when a payoff is requested, any fees to be withheld from payments, and credit ratings.
2. Remiss in entering activity on a timely basis. If loans and their subsequent activity are not entered as they occur, this can affect accuracy of reports submitted to funding sources and Board of Directors, loan balance when a payoff is requested, any fees to be withheld from payments, and credit ratings.
3. Negligence in monitoring loans for delinquency. Staying abreast of your client’s payment progress is essential to successful loan payoff. If they become too delinquent, they may feel hopeless in trying to catch up. With frequent review of their loan, you can perhaps renegotiate terms to help them through a difficult time, thus saving the loan.
4. Failure to report their loan history to a credit bureau. Reporting your client’s payment history to one or more of the credit bureaus can be a win/win for both of you. Your client wins because they are now establishing a credit history for future loans. You win because it encourages them to make timely payments to you.
5. Not providing periodic loan history to clients. At least annually, provide your clients with a copy of the history of their loan. This allows them to see how all payments have been distributed between principal, interest, fees, etc. They can also compare this report with their records in case any payments have not been applied or have been incorrectly applied, allowing any errors to be corrected in a timely manner.
4. Failure to report their loan history to a credit bureau. Reporting your client’s payment history to one or more of the credit bureaus can be a win/win for both of you. Your client wins because they are now establishing a credit history for future loans. You win because it encourages them to make timely payments to you.
5. Not providing periodic loan history to clients. At least annually, provide your clients with a copy of the history of their loan. This allows them to see how all payments have been distributed between principal, interest, fees, etc. They can also compare this report with their records in case any payments have not been applied or have been incorrectly applied, allowing any errors to be corrected in a timely manner.
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