How to create a loan product

What are loan products?

Loan products are the different loan categories that you offer to your borrowers. It specifies the type of loan it is, the range of amounts it offers, and the range of tenors that it makes available. As a Lender, you can create multiple loan products for different sections of your target market. 

The two common sections of the target market that lenders usually create loan products for are SMEs and those who are taking personal loans.

When you create different products to cater to different sections of the market, you also get to specify the scoring model for that particular product and, in essence, for that particular section of the market. This allows you to focus on that section of the market. 

Creating a loan product

An admin on the Lendsqr admin console with the right permission can create a loan product. 

How to create a loan product

1. Navigate to the “Loan Products” tab under the Product Management grouping
2. On the loan products page, you will see a “Create Loan Product“ button at the top-right corner of the page.
3. Clicking this button will redirect you to a page with different sections to create a new loan product
4. After filling out the form, click on the “Create loan product“ button, and Voila! You just created your first loan product.

The create form has nine sections, numbered in the screenshot below to match the list that follows it:

1. Loan product details: Set the product name, description, logo, minimum and maximum loan amount, and interest rate.
2. Repayment details: Set the minimum and maximum tenor and the repayment frequency.
3. Equity contribution: Optionally require a customer contribution alongside the loan.
4. Disbursement details: Choose the disbursement type, the disbursement destination (Bank, Wallet, Third party, Restricted wallet, or None), and who is allowed to disburse this loan.
5. Credit risk rules: Attach a predefined or custom credit risk rule that determines borrower eligibility. A product with no rule attached accepts every application.
6. Fees: Add one or more charges that apply to this product, such as management, penalty, or subscription fees.
7. Loan documents: Specify the KYC documents customers must provide, and add the offer letter borrowers must accept before disbursement.
8. KYC and verification: Choose whether the borrower must verify an official email, verify a government ID, or nominate a guarantor before the loan is approved.
9. Approval workflow: Optionally require sign-off before this product disburses.

Read further: How to Sell Your Loan Products