SAP Loan Management process in SAP IS Banking provides complete understanding of Loan application, disbursement and payoff (Foreclosure) of loan given and loan taken from other trust. In this blog, we present a high level process overview and capability within SAP IS Banking for Loans Management and its lifecycle.
Loan management gives idea for new business as well as ongoing loans. We can change main borrower to co applicant; we can transfer capital from one account to another account and many creative actions through loan management. After completing process of loan management, FI documents get automatically created.
The Loan Management Process steps are as follows:
Types of Loan:
- Short Term Loan, which is used to finance consumer-related products for customers having small enterprises. It could also be used to finance investment goods for small enterprises.
- Mortgage Loan (Long Term Loan) is a product which is used to provide finance purpose related to real estates, i.e. building a new house or buying an apartment or office place.
- Bank and customer have agreed about the loan contract agreement,
- The loan contract creation of the loan is initiated
- The loan capital is disbursed as all preconditions, i.e. collaterals or eligibility, gets fulfilled.
- Usually, the customer repays the loan in equal monthly repayment including interest, principal, commission and insurance etc. but other repayment schemes are also possible (for example, adjustable repayment or Full payments at end of the loan term).
- To manage the repayment of loan in a manageable time frame, the customer might also ask to skip some payments or make some wind-up adjustment.
The enterprise services in the Loans Management – Business Operations ES bundle, allow banks to create loan contracts, disburse capital from a loan, offer skip payment functionality as a way of marketing their loan products and initiate the payoff of a loan.
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By Manish Agarwal. (on behalf of SAP Consulting Team)
SAP :: Streamlined
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