SAP Loans Management is the SAP solution for process oriented and highly automated handling of loan transactions for banks, insurance companies and businesses. In this blog, we mention a high level overview of SAP Loans Management for Banking, Mortgage and Financial Services.
SAP Loan Management maps and supports all processes in the various lifecycles of a loan.

Product categories:
represent a classification from the point of view of financial instruments. They are cross-company code and assigned by the system that means the user cannot change them.

There are several loans in Product categories.

  • Mortgage loans: Mortgage loan is a long term loan , for which an encumbrance is entered in the register for hedging purposes. it is on established form of construction financing with a long tradition.
  • Borrower’s note loans: Borrower’s note loans are large Loans for first – class companies and public institutions with long – running terms and structural features similar to those of bonds, with which listed borrower’s notes can be issued.
  • Policy loans: A life insurance company grants policy serves as a loan security and is typically used to repay a loan.
  • Consumer Loans : A Consumer loan is a loan with a loan amount of credit to private households, which provides financing for consumer products.
  • General loans: These loans are “Personnel loans”. e.g. Employee loans.

Product types: are available to refine the product categories on user level. The user creates individual financial Transactions based on the product types, and process these. Product types are specific to the company code.

Integration with other SAP modules: Loan management have a integration with other SAP modules. E.g. FI, CRM, BP, TRM etc.

Integration with Financial accounting:Financial accounting principles such as IFRS and US- GAAP and supports bank-specific G/L accounting requirements. It has to maintain vendor masters and customer master records.

Significance of Loan management:

  1. G/L Connections for loans management.
  2. Accounts receivable accounting with relevant dunning and calculation of interest on arrears.
  3. Carrying out payment transactions.
  4. Assignment of incoming payments.

New Business in Loans Management:
SAP Business partner :Business partner component, we can centrally create and manage  business partners regardless of the scope, type and method of contract.

Business partner is designed to give users practical advantages, such as minimized  data redundancy and improved data integrity. It also places a stronger focus on managing customer relationships and new customer acquisitions.

We can create a business partner with different business partner roles and assign new roles to business relationship. We can also integrate customer – specific data without making modifications regardless of release changes.

General Loan Process flow:
Application / Offer –> Contract –> Disbursement –> Interest/Repayment Payments.

Need Help:
In case you need assistance on SAP FICO and SAP loan management, please contact us. Please send us your questions, comments or assistance request, and our team would be glad to assist you.
Please send us your questions, comments or assistance, and our team would be glad to assist you.

By Manish Agarwal. (on behalf of SAP Consulting Team)

SAP :: Streamlined

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