loan-servicing

Vocabulary Word

Definition

Loan servicing is a term used to talk about managing all the tasks after a loan is given. This includes tracking and documenting loan payments, sending out payment reminders, handling missed payments, and dealing with loan defaults.

Examples in Different Contexts

For the mortgage industry, 'loan servicing' refers to the administration of a mortgage loan, including collecting monthly mortgage payments, escrow management, and ensuring insurance and taxes are paid. A mortgage servicer might note, 'Our loan servicing department ensures that your mortgage payments are applied correctly to your principal and interest, as well as your escrow account for taxes and insurance.'

Practice Scenarios

Business

Scenario:

The recent increase in late payments is impacting our revenue. Perhaps we should explore third-party alternatives to improve our loan handling.

Response:

I agree. Enhancing our loan servicing system could greatly improve customer satisfaction and payment efficiency.

Tech

Scenario:

With the advent of advanced technologies, automation in financial services is increasingly relevant. Let's brainstorm ways we could enhance our loan management software capabilities.

Response:

There are several Fintech startups that offer intelligent loan servicing software solutions. We could evaluate their products.