Loan servicing refers to the management of a loan after it has been issued. This process includes collecting monthly payments, maintaining records, and providing customer support to borrowers. Loan servicers ensure that payments are applied correctly and that borrowers are informed about their loan status. Additionally, loan servicing involves handling any changes to the loan, such as modifications or deferments. It also includes managing escrow accounts for property taxes and insurance, if applicable. Overall, effective loan servicing is crucial for both lenders and borrowers to maintain a smooth financial relationship.