Key Factors to Consider When Selecting a  Loan Origination System 

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Loan orgination system
los loan origination system

Loan origination is the process in which a borrower applies for a loan, and a lender distributes the loan or discards the application. The loan origination process includes every step from application to funding payout or dismissal of the loan application. The loan origination process is typically cumbrous and needs a lot of documentation. To avoid this, a loan origination system is required for every lender.  

A loan origination software that helps financial institutions generate loan documentation in a way that complies with regulatory and internal requirements. Loan origination software enables financial institutions to automate and manage the workflow of different steps of the lending process.

The steps in the process include loan application, underwriting, credit approval, documentation, pricing, funding, and disbursement or rejection of the application. The software is typically used by financial institutions to manage activities related to consumer, commercial, retail, SME, SBA, or mortgage lending in one centralized place. Nowadays, the loan origination system has become an integral part of every financial institution. 

How to choose a Loan Origination System?  

There are some key factors to consider when choosing a loan origination system for your organization. The loan origination system that you are opting for should integrate with other front-end and back-end applications of lenders to exchange data and communications for a seamless digital lending experience. Also, it should adhere to industry compliance and regulation standards to eliminate security breaches and protect customer data. 

Significant Features of a Loan Origination System 

Now, let’s see the important features a loan origination system should have. 

Customer Management  

In any decision-making of a financial institution, gathering exact customer data is very important. This will be a very tedious task for the lenders. Customer data collection involves a a lot of paperwork. Due to this manual work, there is a chance of adding incorrect data to the system.

An automated loan origination system can help you in this regard. Automated loan origination systems will have web-based interfaces in which customers can fill in their data on their own, which will reduce errors. This makes the lender’s task easier and customers also will feel that the system is customer friendly leading to more customer satisfaction. 

Assistance in Loan Management 

Loan origination software simplifies loan management by automating data collection, verifying documents, automating underwriting and workflows, and enabling third-party integrations. The loan origination system can also integrate with other customer relationship management software in the organization to maintain the borrower profile and track them until the final repayment. 

Workflow automation 

Loan origination software helps with sales task automation. Loan origination software can define and automate the workflow for loan distribution to call centre agents and in-house teams. This system can take care of scheduling customer-agent interactions or meetings. From there, it can take over the application and analysis process.

In the next stages, it can help in the underwriting and decision processes. Finally, based on the decision, the organization can fund the loan. All these make it an end-to-end solution for managing the workflow of the loan origination process.

Robust workflow and integration  

The loan origination system should allow quick, intuitive, and robust workflows across the loan origination and management cycle. Every authorized staff member of your company should be able to access documents, status updates, and process management tools on a single, intuitive platform. Besides, all application processing, underwriting, loan closing, and follow-up tools should be automated and convenient.  

Easy to use 

The purpose of every automation effort is to reduce the time spent on system use and onboarding. An important quality parameter of a LOS is the ease of its implementation and use in your company’s software infrastructure. You should choose a loan origination system that streamlines and speeds up the lending processes for all involved stakeholders and is pleasant to interact with due to a great UX/UI. 

One system for all loan types 

Often, financial institutions rely on separate loan origination systems to originate the different types of loans - consumer loans, mortgages, trade loans, SMEs and corporate loans. By having one system for all loan types, the institution can benefit from significant cost savings in terms of total cost of ownership.  

Also, a centralized system allows customer 360 relationships which helps up-sell and cross-sell opportunities and drives customer satisfaction and retention. 

Excellent Customer Service 

One of the most important things to consider when choosing a loan origination system for your organization is the customer support and service level commitments that the company is offering.

Having enhanced Loan Origination Support will help you to overcome a lot of troubles going forward because the responsiveness of the loan origination system provider’s support team will essentially determine the level of service you can offer your clients.  


The loan origination system which you are opting for your company should be scalable. Present-day technology evolves fast today, so your digital transformation efforts may quickly become outdated. So, it is very important to choose a scalable and flexible loan origination system for your company. The software should be highly adaptable and can be pinched in many ways without downtime or loan origination cycle disruptions. 

Easy to learn interface 

It is very important for every software system that it should be easy to use for the organization as well as the clients. User onboarding is very important when it comes to new technology integration. The same is the case for the loan origination system.

The chosen loan origination system should be simple and innate for both staff and clients, giving them a full overview of handy functions and real-time loan tracking tools. Your employees should be able to learn all the software easily and study its functionality to handle the entire loan process from start to finish without confusion or mistakes.  


The best loan origination system is the one that can meet all your customer needs and аt the same time, fuel your growth with robust end-to-end capabilities like origination, advanced portfolio management, financial statement analysis, underwriting, and executive reporting.

The loan origination system designed by Toolyt can cater to all your organizational requirements starting from the loan application to the final repayment of the loan. Toolyt will definitely help you to bring a smile to your customer’s face. 

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