Selecting The Correct Loan Origination Software: Why It's So Important

27 May 2018
 Categories: , Blog

Here in Canada, the lending laws are a little different. They are also a little different from province to province. It becomes even more difficult if you are attempting to lend money digitally (i.e., online lending). Then you need the correct loan origination software. It does not matter if you are a private lender or a banking institution in Toronto; if your software does not fit with your province's lending practices, you are in trouble with the federal government.

There are other reasons for having the correct loan origination software. Many of these are applicable to multiple provinces. (Those reasons that only apply to certain provinces will say so.)

You Are Protecting Your Institution or Personal Wealth

A big part of having the correct software for online lending is so that your loan contracts are legal and binding within your own province, as well as within the province of the borrower. In the event that the borrower fails to repay the loan, you will need these contracts to protect your institution or to protect your personal wealth (if you are a private lender). If the software does not generate contracts with terms that apply in both your province and the lender's province, pursuing repayment via a lawsuit under Canadian law may be very challenging.

No Loopholes—Just Clear and Concise Language to Make Money

Your digital lending contracts should also be clear and concise. No borrower is going to take the time to read through several pages of contract terms, and you want to make sure there are no loopholes that would legally release the borrower from repaying the loan. Your software should be able to generate a standard lending contract in compliance with your province's lending practices while simultaneously generating a second lending contract that is in compliance with other provinces' lending practices.

Both contracts should be easy to understand and quick to read. Otherwise, online borrowers will look for a simpler way to borrow money online. When that happens, you lose money you would have earned in interest on the loan.

There Is Loan Origination Software for Individual Countries and Multiple Countries

Not all digital loan origination software is cut and dry. You can buy software that is just for Canadian lenders, or software for just about any other individual country. There is also loan software for multiple countries. Make absolutely certain that the software you buy is strictly for Canadian lending purposes because lending practices in other countries likely won't follow the same rules and regulations. Additionally, the software for multiple countries is only for lenders and lending institutions who are going to make digital loans on an international scale. If that is not your intent, then do not buy that software.

Most Software Cannot Be Returned After You Purchase It

Companies and retail locations that sell software, as well as online software sellers, refuse to take software back in exchange for a refund of your money. What you buy is what you are stuck with. If you purchase the wrong software or if you purchase software that you find cannot be used in the way you intended to use it, then you are out the money you spent on the software. Then you have to find and purchase the correct software. 

If you are not absolutely certain that you have the correct software in your digital trolley, call the company that sells it. Ask some questions about the software and ask if you can get a guarantee on its return. Representatives from companies are knowledgeable enough to answer all of your questions and help you purchase the correct software. Representatives from companies like CloudBnq Inc. are knowledgeable enough to answer all of your questions and help you purchase the correct software.