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How To Choose A Lending Software Provider

How to choose a lending software provider? As a private lender, one thing you should always aim for is “ease” of software process. Technology has made everything easier and faster, and your business should reflect this. With loan software, your work as a private lender becomes even more efficient. In this article, we’ll discuss how to choose a lending software provider for your private lending company.

What Is Loan Software, or Lending Software Provider?

Loan software, also known as loan management or lending software, manages all loan processing activities on a single platform. Lending software automates and manages a loan’s lifecycle — from processing to the collection. Like any other technology, loan software makes work easier for the lending company and the borrower. It gets rid of paper workflow and minimizes efforts and errors.

A lending software is designed to control risk, quicken loans enhance customer service and interaction, lower operating costs, provide analytics, and create reports. All these tasks would typically be done with available human resources, which is not only slow but less reliable.

But with loan software, you can be sure of a more reliable, error-free work. Even your customers would have a better experience working with your company. Therefore, you should work towards digitalization for your private lending company.

A loan software takes care of all types of loans: conservative, production, arms, profit-making, and appearance of credit. It can also function as a complete loan servicing system, providing credit scoring, escrow accounting, management, credit reporting, reimbursement, electronic funds, and collection.

Types Of Software Development Processes For Private Lenders

To thrive well in the private lending business, you need to choose the best software provider. If you’re just starting with your search, it may not be easy to choose the right lending software for your needs. You’ll be faced with many options to choose from, and you may eventually go for one that doesn’t fit your type of business well.

While the world of software development is large, there are two main types of software development processes for all kinds of businesses. They are:

1. Outsourcing lending software provider/custom or ready-made solutions

2. In-house/custom software development

Outsourcing Software/Ready-Made Solutions

In software development outsourcing, a company or business hires a third-party service provider (an external vendor) to take care of all its development projects. It can be likened to hosting a party but letting an experienced catering service provider handle the catering side of the event.

When it comes to outsourced lending software provider, the software is already developed by the software developer, which your private lending company can use to offer customers services. Under this category, examples of software for private lenders are The Mortgage Office, Fics, DownHome Solutions, Loan Assistant, LoanServ, etc.

There are several software development services you can outsource: ranging from UX Design, consulting, software architecture, software design, etc.

We at Engenious, provide customised software, which is tailor-made to your specific needs. Book a short meeting to discuss your project: request demo.

How Can Outsourcing Companies Help With Private Loan Servicing?

There are a lot of processes involved in loan collection. It can be hard to keep up, especially when many customers need to secure loans, update their payments, check for interest, etc.

In the past, traditional lenders used to carry out all their operations in-house. However, with the advancement in technology and IT, loan providers have started outsourcing software development due to its numerous advantages.

Outsource companies can help make work easier for you and your customers. Their expertise would help increase the customer base of your private lending company by leveraging advanced loan servicing technologies to quicken loans and bring about a digital mortgage lending process.

Over the last decades, outsourcing software development has experienced huge growth. About 64% of businesses now outsource their entire software development process.

Although there’s always an element of risk and doubt, which is understandable, there are many benefits associated with this type of software. Let’s take a look at a few of them.

Pros Of Outsourcing Software

1. Reduced costs

Cost reduction is the number one reason many companies outsource their software development process. Unlike hiring a team of in-house developers — a process that involves scouting, training, and getting new hires on board — outsourcing software saves money on hiring expenses.

Bringing in developers as full-time employees is not even a question. This makes one-time collaborations possible without commitment or employment obligations.

It doesn’t matter where your developers are in the world. Even if you’re hiring from the Philippines, you’ll be able to do so at a fraction of the cost it’d take to bring them into your country.

2. Access to Global Talent

You’re not restricted to a particular location when it comes to finding qualified developers.

You have access to anybody, anywhere in the world. And that also gives you access to exceptional technology and know-how for your project.

Most software development agencies have years of experience and expertise as they’ve worked with various clients with different needs.

To always be on top of their game, they have access to top-of-the-line software development tools. Because of this, they can handle any project from their specialized niche.

3. Easy to scale

When working on a software development project, changes sometimes need to be implemented, affecting the team structure. You may need to cut down on some members or hire more.

Anyone with an in-house team would know that it’s not easy to find another team member for the required skill, especially if those skills are needed for a single project.

But you can avoid all these problems when you outsource your software development. The agency usually has enough workers to cover your needs. So you don’t need to worry about how to scale your project; the agency will handle that for you.

Cons Of Outsourcing Lending Software Provider

1. Communication Problems

When you outsource your software development service, you may have issues like language barriers and time zone differences.

For example, suppose you’re hiring a team based in a country that speaks a different language. In that case, you’d have to overcome the language barrier by trying to learn the language or getting an intermediary to facilitate communication. By the way, you can use communication tools like Slack and Jira to make things work.

2. Security risks

Working with a team you cannot see physically can be risky regarding privacy. Your algorithm or software can be stolen or replicated by a person on the team. You also risk having valuable information that has been shared with the team to be leaked or compromised.

3. Difficulty in finding the right team

Finding the right team for your project is easier said than done when it comes to outsourcing software. There are many things to consider before choosing a developer (which we’ll discuss later in this article).

Hiring the wrong team is the major reason for project failure, and it can lead to many other inconveniences.

In-House Software Development

In-house software development is also known as insourcing. Here, you develop the software using the experts or developers you have in your company. This means you’d have to do everything yourself, within your company’s capacity.

You don’t get any external help. Your company is responsible for hiring the developers and assigning projects to them. With this approach, the success and failure of your software development are all up to you.

Putting together a team of software developers can be long and tiring. But with the right knowledge, it might just work out for you. You’ll end up with loyal, committed team members who handle all your software development tasks that come up now and in the future.

Pros Of In-House Lending Software Development

1. Smooth Communication

Having an in-house team means having company workers you can see and interact with in person. These developers would work at your company’s headquarters or branches, so having direct communication will not be a problem.

You’ll have easier communication and can affect changes to projects faster. There’ll almost be no problem caused by miscommunication.

2. Full control

One advantage of this software development is that you have complete control over the project and staff. You get to train your workers from the beginning, teaching them all they need to know for a successful project.

With permanent staff, they’ll be more aware of the company’s needs and be able to adjust accordingly to move from task to task faster than an external specialist will. It will be easier for you to observe the progress of work and supervise the implementation of the project.

3. No external access to your data

Unlike when you outsource your projects, you don’t have to give out access to your company to anyone outside. All information shared within your company’s building walls stays within. So the risk of security information getting leaked is reduced.

Your projects are in the hands of a team of workers working hand-in-hand for their success.

Cons Of In-House/Custom Software Development

1. High cost of building a team

It takes more than one software developer to have a team. Most times, you may need more than one developer to start. And that costs a lot, from the hiring process, training, and keeping the team together.

An in-house team can cost three or even four times more than outsourcing. You have to be in control of their salaries and other benefits. The more members you have, the higher the cost.

2. Shortage of talent

It can be challenging to find the talents your company specifically needs in the tech world. You’re limited to candidates in your local premises or those ready to relocate, which can be hard to find. The talent pool is just limited.

If you have developers who specialize in specific parts of the project, you need extra hands for other skill sets. You’re likely to require additional technical skills that your team does not have. In this case, you’ll have to hire new employees, which can be difficult and slow down the project.

3. Employee Turnover or Attrition

This one is a general problem of in-house development. After all the hard work with the hiring and training, a team member can decide to leave the company for one reason or another.

You will then need to urgently replace them so work can go on. As a result, the cost incurred by your business to train these leaving employees and other associated expenses become wasted, and you now have to start from the beginning.

Step By Step Guide On Choosing Lending Software Provider

Despite the benefits of outsourcing your software development process, you’re still at risk if you choose the wrong developer.

So, what are the things you should look at when choosing a developer for your software:

1. Portfolio

One of the first things you should check before saying yes to a software developing company is their portfolio. The portfolio is one of the things that make potential customers notice a development company. An impressive portfolio isn’t an option; it’s essential. It’s also crucial that you know how and what to check.

A portfolio showcases the company’s skills, past experiences, previous projects, and all they have accumulated over their years of service.

Past works allow you to know if they have worked on a similar project. That way, you can be sure of how well they can do with your software.

2. Brief

If you’re looking for the service of a lending software provider, the first thing you should put together is a brief. A well-written brief allows the developers to understand your business and sells them the video for the software and how it will work.

A brief should contain the main ideas and plans for your loan lending software project and any specific functions you had in mind that make it different from others. The more details you can provide, the better for both parties.

Note: It would be better to receive a cost estimate before reaching an agreement. This will not only clarify the cost of everything but also prevent overpaying.

3. Client review

When you buy a product or a service and receive an excellent job in return, you’ll be propelled to give them a review on their website or privately. It’s only natural.

Before choosing a lending software provider, check the testimonials they’ve received from others who have once worked with them. A website without a review is a red flag. Companies love putting good reviews from customers on their main page, so flee if you don’t see any.

In some cases, you may find a company that puts fake reviews on its page. How do you check for reviews’ genuity?

Reach out to the previous customers who dropped the review and ask them to share their experience with the company. Although you may meet a few resistant ones, most of them won’t mind sharing.

Today, every respectable IT company has a profile on GoodFrim, Clutch, or Upwork. Clutch is one of the biggest IT outsourcing platforms with over 27,000 agencies. The other platforms listed are also not lacking. Check these platforms for reviews from verified customers. All reviews pass through the platform’s administration, so there’s no way the company wrote them.

4. Comunity involvement

Credible IT companies would have a form of involvement with the global tech community. The company:

  • Might have affiliations with other companies in the IT world, attend conferences, etc.
  • Could have their works published on some online spaces like Google. They should have written e-books, hosted webinars, training, and more.
  • Must have received awards and certificates for credibility and reliability.

5. Social media accounts

A lending software provider’s social media accounts should reflect their expertise. When a company updates its blog page frequently, you can ensure that they know what they’re doing and are not hesitant to provide their users with more information on what they do.

You should always check a lending software provider’s social media accounts, especially their LinkedIn profile. LinkedIn is the most popular platform for B2-B companies. You can find the company’s description, employee details, location, experience, etc.

6. Github

Developers use the GitHub platform to showcase their coding skills, store their codes, and manage their work. A developer’s GitHub profile is a goldmine of information for tech recruiters.

This resource lets you check whether they deliver easily readable and reusable codes and how often do they update their codes.

Once you’ve checked all of the above and gotten positive feedback, you can be sure of the company. Only then should you proceed to collaborate with them on your project.

Why Should You Outsource To Engenious?

Engenious is an excellent lending software provider. For more than six years, we’ve helped startups, small businesses, and large corporations to develop high-quality software and IOS/Android apps.

We pride ourselves on our workflow efficiency and ability to create software that’ll gain a competitive advantage over other businesses in your niche.

Here are a few of our qualifications:

  • Over 50 employees in 8 countries worldwide who are ready to work tirelessly to develop useful private lending software for you.
  • Over 62 satisfied customers as of today, with reviews to show for it.
  • Consultancy in web and mobile development.
  • A total of 88 completed projects.
  • Up-to-date technology tools and approach to development.

Conclusion

Choosing the right software development company may seem like a hard-to-reach feat, but it should be easier with all the information we’ve provided in this article.

Remember, you’re not only looking for experienced developers but for a credible partner that understands your vision and won’t stop until they achieve it. Once you’ve made the right choice, you can enjoy lots of benefits from the collaboration.

If you found this article resourceful, please share it with others you think might need the information.

June 4, 2022

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