Loan servicing
Loan servicing is the work of running a loan after the money is disbursed: collecting repayments, applying them to interest, principal and charges, keeping the schedule and balance current, answering the borrower, watching for early signs of stress, and following up on missed payments until the loan is closed.
Servicing is where a loan earns or loses its margin, because origination happens once and servicing happens every month for the life of the loan. Lokta's AI loan servicing is built for that stretch; this entry defines the category it works in. Outside India the word means the same thing, with one difference in who does it. In the United States and the United Kingdom a loan is often serviced by a specialist servicer that is not the lender, under a servicing agreement. In India the regulated lender, or a lending service provider acting for it, usually services its own book.
The work splits into routine and exception. Routine servicing is the schedule: presenting mandates, posting repayments, accruing interest, applying charges, issuing statements and certificates. Exception servicing is everything the schedule did not expect: a bounce, a hardship request, a part-prepayment, a complaint, a change of bank account, a death in the family. The routine half has long been a system's job. The exception half has been a person's, and that is the line agentic loan servicing moves.
Illustration: a lender with 40,000 live loans presents mandates on the fifth of the month. Around 37,000 clear and post without anyone looking at them. The other 3,000 become work: a reminder, a re-presentation, a call, a plan, and for a few hundred, a collections case. Servicing quality is decided in that second group, and so is the cost of running the book.