Activity diagram for loan management system

About this activity diagram for the loan management system

The activity diagram for the loan management system visually explains the loan application and management process. It starts with the client applying for a loan. This first phase involves getting the relevant documents, including the customer’s personal and financial information, for evaluation of the loan request.

The next step is to submit the documents necessary for the loan approval process. Before starting with the loan application, this approach ensures that all necessary documents, such as income verification, identification, and credit history, are available to assess and validate the applicant's request.

The loan approval process is a vital decision-making step during which the bank evaluates the submitted documents and the applicant's credibility. This phase determines whether a loan application will be approved or denied based on a comprehensive evaluation of the given information, risk factors, and bank loan issuing criteria.

If the loan is accepted, the applicant receives the loan amount, which begins the repayment procedure. This step consists of paying funds to the borrower and arranging the repayment plan, which includes loan repayment terms and conditions such as interest rates and due dates.

During the repayment phase, the borrower makes loan installments on the agreed-upon timetable. This continual procedure is critical to preserving a positive connection between the borrower and the bank. It demonstrates the borrower's dedication to satisfying financial responsibilities, which is critical to their credit history and future borrowing prospects.

The figure depicts a decision point in repayment: if the loan is entirely paid, the procedure is completed by closing the loan. Closing the loan entails amending the records, releasing any collateral, and ensuring that all loan terms have been met. This stage officially concludes the loan arrangement between the bank and the borrower.

If the loan is only half paid, the system will continue the payment procedure. This includes reminding the borrower of their duties, offering flexible payment choices as needed, and ensuring that all payments are completed in line with the loan conditions. This stage demonstrates the system's versatility in managing recurring loan payments.

If the loan application is not authorized, the system rejects it, bringing the process to a close. This decision is conveyed to the applicant, along with the reasons for rejection and recommended measures for future development. This fosters openness and gives candidates a clear picture of their financial situation.