What is Loan Origination?
In finance, origination is the process of a borrower applying for a loan or mortgage and the lender approving it. The procedure entails the borrower submitting a loan application and appropriate financial papers, the lender reviewing the application, and acceptance or rejection of the application. It is done with loan origination software.
A lender processes a borrower’s application for a new loan during the origination process. Origination comprises all stages, from accepting a loan application to disbursing funds.
Loan Origination is a credit assessment for pricing and lending decisions. It is different from underwriting, a risk assessment used by Insurance. There are four stages of the loan origination process, i.e., prequalification, application, credit appraisal, and funding.
What are the business benefits of Loan Origination?
Loan origination automation optimizes the process for a lender of lending a financial loan by automated disbursement of the loan.
It enhances customer experience with the digitization process of loan approval and disbursement within a specified timeframe, i.e., improved efficiency.
It streamlines the lending process of a loan by providing transparency and proper compliance with government rules and regulations at different stages.