10 Most Important Criteria for Choosing the Best Loan Origination System

Lending businesses today operate in intricate environments where they must adhere to evolving industry policies, strict scoring methods, and regulatory demands.

In such circumstances, surviving without digital transformation is challenging, as staff in a lending company often grapple with extensive paperwork related to loan applications, approvals, and documents.

By embracing an advanced and intelligent loan origination system (LOS), your business can advance to the next level of automating the loan portfolio cycle. A modern LOS, such as BankPoint, provides comprehensive control over data and enables efficient use of resources throughout the entire audit trail.

Wondering how to choose an affordable loan origination system that caters to all your business needs? Here’s a complete overview of LOS systems and a breakdown of essential selection criteria.

What is a LOS? 

A LOS is a software tool designed to automate lending processes and handle document management in lending companies.

It should provide a centralized, automated technology solution that aligns with regulatory standards to simplify and speed up loan application, approval, and issuance procedures.

Modern financial technology products for lending firms come with practical features like managing data across various channels, real-time monitoring, tools for underwriting and rating, credit analysis, and loan servicing. These features aim to enhance business performance while minimizing compliance risks.

Additional LOS features include:

  • Managing processes
  • Handling screens
  • Managing printouts
  • Integrating different aspects
  • Managing users
  • Storing documents
  • Using a scoring engine
  • Conducting financial spreading
  • Configuring business settings
  • Incorporating covenant modules
  • Utilizing company relations modules
  • Implementing collateral modules.

How to choose a Loan Origination System?

Every business owner desires the best loan origination system for its promise of comprehensive automation across channels, product consolidation within a single platform, and improved management of the loan portfolio cycle.

However, with numerous options in the market, selecting the ideal product for your particular firm can be daunting. We suggest assessing whether the vendors of loan origination systems provide the following:

  • User-friendly data entry
  • Easy underwriting
  • Customizable decision-making
  • Simple user verification

These serve as the foundational criteria for selecting a Loan Origination System that will work in your favor, simplifying loan management processes for both clients and staff.

10 most important criteria for choosing a LOS

When seeking fair lending software, it’s essential to consider these 10 criteria carefully.

These parameters of a LOS play a pivotal role in determining the quality of your user experience and the practical automation benefits you’ll gain from integrating the LOS software.

1. Vendor’s domain experience

Numerous software vendors operate in the FinTech sector, each showcasing talents and skills in diverse niches. To ensure the best fit, seek a company with a robust track record specifically within the lending domain, as it involves unique nuances and characteristics distinct from other financial sectors.

Selecting a vendor well-versed in the intricacies of the lending business, understanding the fundamentals and stages of loan origination, and possessing expertise in the technical aspects of loan automation is crucial.

2. Easy to use

The goal of any automation initiative is to minimize the time spent on system usage and onboarding. A crucial quality factor for a LOS is the simplicity of its implementation and integration into your company’s software infrastructure.

Tip: Opt for a LOS that enhances and expedites lending processes for all stakeholders, offering a pleasant interaction experience with its excellent UX/UI.

3. Easy to learn

Effective user onboarding is essential for successful integration of new technology. The selected LOS system should offer simplicity and intuitiveness for both staff and clients, providing a comprehensive understanding of useful features and real-time loan tracking tools.

Employees should easily grasp all software nuances and become proficient in handling the entire loan process seamlessly, without confusion or errors.

Tip: Explore the vendor’s onboarding materials or on-site training options.

4. Easy business logic customization

Top-tier LOS systems offer extensive configurability, allowing you to make changes and adjustments to all settings and parameters, aligning the system with your specific business requirements.

Gone are the days of requiring extensive coding, as a modern LOS should allow easy adjustments with just a few clicks, even for those without coding experience.

Tip: Verify whether the LOS software enables swift customization of scoring models, workflows, and queues.

5. Strict security controls

The privacy and security of user data pose significant challenges to the digitalization of lending businesses. Concerns from both regulators and clients revolve around the effectiveness of security measures that lending businesses can assure for safeguarding sensitive client data.

Tip: Evaluate the essential security measures implemented by your LOS system vendor in their software solution. Focus on security controls, as they dictate access to user details and the processes for granting, managing, and revoking access rights.

6. Robust workflow and integrations

Ensure your LOS facilitates swift, user-friendly, and sturdy workflows throughout the loan origination and management cycle.

Authorized staff members should effortlessly access documents, status updates, and process management tools on a single, intuitive platform. Additionally, automation and convenience should be inherent in application processing, underwriting, loan closing, and follow-up tools.

The support for API integrations is noteworthy. Given the interconnected nature of the digital world, businesses benefit from linking their lending software to third-party services via APIs, avoiding the need to build additional services from scratch and incurring unnecessary costs.

Tip: Take a strategic approach and opt for loan origination software that boasts extensive support for API integrations.

7. Future-proof technology

The rapid evolution of present-day technology means that your digital transformation endeavors could swiftly become obsolete.

Strategically, it’s crucial to opt for LOS software design that is scalable and flexible, ideally incorporating microservices architecture. This architecture is highly adaptable, allowing for numerous adjustments without causing downtime or disruptions in the loan origination cycle.

Tip: Examine the platform’s architecture to confirm whether it utilizes a microservices approach.

8. Cloud-based vs. on-premise

Many businesses find it imperative to migrate their lending operations to the cloud. Cloud-based software facilitates faster operations, leveraging the substantial technical capacity of cloud providers, and provides global access to the lending platform from any device, location, or browser.

Cloud solutions offer easier integration and come at a lower cost compared to the demanding and resource-intensive nature of on-premise software. Nevertheless, on-premise solutions are considered more secure and less susceptible to data breaches.

Tip: Choose the most suitable option based on your business requirements.

9. Omnichannel support and device-agnostic

A primary objective for any lending business is to ensure the accessibility of its services to diverse populations. While advancing in digital transformation, it’s crucial to keep alternative avenues open for clients who may not be as digitally proficient.

Make your loan offerings accessible through online applications, local loan agents, and sales teams, recognizing that some clients may have limited access to technology.

Tip: When introducing a loan origination system, avoid confining it to specific devices and operating systems. Ensure flexibility to accommodate all the populations you serve.

10. Efficient and friendly for employees and borrowers

Remember, it’s your staff who will be utilizing the integrated advanced LOS. It’s crucial to verify that the system is intuitively designed, allowing all staff members to navigate the entire loan cycle seamlessly, minimizing friction and errors.

Tip: Assess whether the vendor offers staff training or provides comprehensive onboarding videos and tutorials.


Today, lending software has evolved significantly, and various vendors provide consumer credit, car loan, and mortgage loan origination system solutions to clients. With a plethora of options available, business owners face a choice that requires thorough market research and feature evaluation.

We’ve discussed the critical aspects that a lending business should consider when implementing an LOS system. Now, it’s your turn to explore the available alternatives and select one that aligns with your budget, technical infrastructure requirements, and desired functionalities.