These are some of the main steps of the loan life cycle:

Customer Registration and Loan Origination

When Customer details are first entered into the System and a Customer Profile is created - this is the Customer Registration.

Customer Registration, in particular, can happen during the Origination. Origination is what happens when the loan application is created. This can be done by the customer or by a Lender’s representative (permitted to use the Origination workplace) following their contact with the customer. As a result, both customer details and loan application data are recorded in the system.

Loan Check and Evaluations

Before the loan application gets to the Underwriter who will make the final decision about its approval or rejection, it can go through several other verifications/evaluations

Originator’s Decision: If the loan is initiated by a Lender’s representative (either in-store or by a back-office employee), they must submit the loan application for approval.
Automatic Processing: This stage is not seen in the back-office, as TurnKey Lender’s dedicated decision engine evaluates the loan application validity on the background, based on the rules defined for the company and information about the loan/customer. For example, automatic processing may request information about the potential customer from a credit bureau. It is usually performed immediately after the application has been submitted.
Additional verifications: Subject to the settings of the credit product, the loan application may require additional verifications, such as bank account validation that can be performed after the loan origination or at the later stages (subject to the company processes and corresponding integration settings). The results of such verifications will be visible to users at the following stages.
Collateral Evaluation: According to the product requirements, the collateral manager enters information about the collateral used to secure the loan, assesses this information, makes a decision on the validity of this collateral and the possibility of the loan approval, as well as sets dates of the next collateral check (if required).
Risk Evaluation: The risk manager runs additional checks based on all the currently available information and results of the automatic processing and makes a decision on the validity of this collateral and the possibility of loan approval.

Final Approval/Rejection of the Loan Application (Underwriting)

Once the Loan Application has successfully passed all the required preliminary evaluations, the system will suggest a decision. If any step requires manual review, the loan is forwarded to the Underwriter for final approval or rejection.

If all checks are successfully completed, the loan can be automatically approved. However, to ensure manual oversight, a two-level approval process can be enabled at the credit product level.

When the loan is approved (by the Underwriter or automatically), the system generates the Loan Offer and/or Agreement. The customer reviews and signs the necessary documents to proceed.

Gathering Investments

In certain cases, a loan may require additional investment gathering before final disbursement. This process occurs after the Underwriter's initial approval. Such loan becomes available at the Investor’s portal.

Loan Servicing

Once the Loan Agreement has been signed, the loan servicing stage starts:

Reimbursement and initial loan schedule update: The loan is reimbursed to the customer and the repayment schedule is adjusted (subject to the customer’s request or company procedures)
Loan payments: If everything is OK, the loan is paid in compliance with the schedule monitored by the Loan Manager
Handling payment issues: If issues arise with loan repayment, the Loan Manager contacts the customer and applies all the possible effort to find mutually beneficial solutions
Loan closure: Subject to the flow of the loan repayment and decisions made in the process of its servicing the loan may be repaid, restructured, or written off. Any external investments related to the loan are handled correspondingly.

Debt Collection

Should there be any payment issues that cannot be handled by the Loan Manager, Collectors may be involved to force the loan collection process.

Sale Cancellation

In cases when the Customer returns the goods or refuses the service in accordance with the Law on Consumer Protection or its equivalent, it is possible to close the transaction and collect the money back from the business partner or the plaintiff.

Loan Archive

Any rejected, canceled or closed loan is archived. Users with specific permissions can change the status of an archived loan.

Main Phases of the Loan Life-Cycle