What is the primary function of loan servicing?

The primary function of loan servicing revolves around the management and administration of a loan after it has been issued. This process includes various responsibilities, such as collecting monthly payments from borrowers, managing escrow accounts for taxes and insurance, and maintaining the loan records. Loan servicing ensures that all aspects of the loan are handled smoothly throughout its lifecycle, from payment collection to customer service inquiries.

The role of loan servicing is crucial for both lenders and borrowers, as it helps maintain the integrity of the loan details and facilitates communication regarding payment plans or any issues that may arise during the loan period. This function is central to the ongoing relationship between the lender and borrower, providing support and structure to the borrowing process.