A loan origination system (LOS) helps bolster the processing and application of a loan product.
The right LOS system has software that can quickly perform actions that once were done manually. It also brings a level of efficiency to the process that can save time -- and money -- for everyone involved.
The right LOS can improve your business in several ways. It can:
- Increase the speed and accuracy of your credit assessments
- Give you more flexibility and allow for greater customization
- Promote greater collaboration
- Simplify the compliance process
- Boost your bottom line
Microservices, APIs, machine learning, artificial intelligence and other technologies in a good LOS help trim processing time and increase efficiency. They also can cut the cost of processing a loan.
Automation of processes is one of the key advantages of implementing a good LOS. Without an LOS, the loan origination process can bog down due to the extensive amount of documentation that is required. That means the origination process can stretch out to a month or more.
Because an LOS automates much of this work, loan origination times can speed up significantly. Loan origination systems automate data collection from the borrower and verify a borrower's documents digitally. The underwriting process also can be automated.
A good loan origination system might make the process of documentation easier for customers by pre-filling some of the data needed. The system also might use APIs that integrate with other apps and services, streamlining the process.
Every business has its own individual needs, so the LOS that is right for one business might not be best for another. However, there are some qualities that many of the best systems share. For example, the best loan origination systems are likely to have cloud-based infrastructure and customizable dashboards.