In the US, the federal government’s efforts to bolster the economy against the effects of the coronavirus pandemic have dominated the lending landscape since early April, with lenders pitching in to get partly-forgivable loans to small businesses reeling from the public-health crisis.
The second round of the Small Business Administration’s Paycheck Protection Program still has money to lend, and additional government-guaranteed loan programs may crop up to stimulate economic recovery. But some community bankers are looking past stimulus facilitation to seize opportunities in existing-loan modification.
Changing the terms of consumer loans to protect portfolios
In fact, mortgage modification has been in the stimulus toolkit since the pandemic was declared in mid-March, with governments around the world enacting mortgage furloughs to give consumers relief during and after the pandemic. But now other loan types, including consumer loans, are coming into view through a similar lens of accommodation.
“By modifying the original terms of existing loans agreed to by the borrower and the lender, banks can help individual consumers get by in hard times,” says Elena Ionenko, co-founder of TurnKey Lender, a leading lending-technology provider to traditional lenders, lessors, and retailers around the world. “And, by agreeing to the new terms, individual consumers help banks reduce loan-portfolio losses.”
The commonest form loan modification is debt rescheduling, which usually gives borrowers more time to repay. Other modifications include reducing the principal balance of the loan and reducing the interest rate for the duration of the loan’s life.
The ability to modify loan terms is built into TurnKey Lender’s servicing and collection system, which all of its clients use. Zilingo, an e-commerce company that last year raised $226 million to digitize Asia’s fashion supply chain, uses TurnKey Lender’s loan-modification features, as does InnoVen Capital, the largest venture-debt provider in Southeast Asia.
TurnKey Lender can further customize loan-modification terms for US community banks, enabling them to help customers through hard times while protecting their own loan portfolios from erosion brought on by widespread default. And the company can do this quickly. In 2019, business consultancy Frost & Sullivan singled out TurnKey Lender as the “fastest to market” of all lending-tech providers — a process that can, quite literally, take just a few days.
Loan modification in the context of full-service loan automation
In fact, community banks can benefit from automated loan-modification capabilities along with digital-lending features designed to help smaller lenders compete on an even footing with national banks. Here are some of the ways TurnKey Lender can help.
- TurnKey Lender has processed millions of loans. Lenders count on our loan-origination software for fast and accurate application processing and our 27/7 support for a superior customer experience. The fintech’s solution uses artificial intelligence and machine learning — sifting through 839 million alternative-scoring data points — that enable smart choices and help the businesses grow.
- TurnKey Lender supports cloud-based loan processing as well as loan processing through dedicated servers. Does your bank have the staff and the institutional knowledge to develop, maintain, and manage an advanced lending software platform on-site? If not, a cloud-based approach may be best. Flexibility is also evident in TurnKey Lender’s modular-platform model that allows clients to use — and pay for — only those parts of the platform they need.
- Lenders are turning away from multiple solutions for different stages of loan origination, and for different credit products. TurnKey Lender is at the forefront of this convergence, with the power to support loans — and modifications — of every sort.
- TurnKey Lender addresses this top concern through rigorous third-party certification, as underlined by its adherence to rigorous Open Web Application Security Project standards, as well as certifications that attest the company meets all statutory and regulatory requirements.
- For community-bank personnel that may not be wholly familiar with digital lending, TurnKey Lender is always poised to help. Believing “an informed customer is the best customer,” the tech provider views the process of getting clients and prospects deeply comfortable with our lending solutions as vital to its core mission of helping lenders succeed.
These elements all come into play where loan modification is on the menu. “Because our solution is built for the entire loan life cycle, our servicing and collection module can handle any modification a lender can conceive,” says TurnKey Lender’s Ionenko. “This translates, quite dramatically, into real-world relief for lenders and borrowers alike.” Interested in talking to our lending experts about your loan modification needs? Schedule a call today.