How lenders use it
The LOS is the lender's record of each application. It tracks the stage, who owns the file, which documents are in and which approvals are done. It applies the lender's workflow and approval limits so that every file follows the same route.
Most systems also generate documents, run credit bureau and register checks, store notes and keep an audit trail. Some include pricing rules and decision rules the lender sets. The lender, not the software, owns the credit policy.
After funding, the loan moves to a loan management system, sometimes called a servicing system. It handles the schedule, payments, arrears and collections. Many vendors sell the two together as one platform. Others sell them as separate products.
Small and mid-size lenders often find that the work before the LOS, such as chasing documents and keying data, is where time is lost. An intake agent can complete the file first and pass it to the LOS. The intake and LOS roles differ, so lenders compare them on their own terms.
Common confusions
An LOS is not an LMS. The LOS covers application to funding. The LMS covers the life of the loan after funding. Searches for LMS in loans mean loan management system.
An LOS is not a CRM. A CRM tracks contacts and sales leads. An LOS tracks credit applications, documents, checks and approvals.
An LOS is not a core banking system. Core banking holds accounts and balances for a bank. Non-bank lenders often have no core banking system and use an LOS plus an LMS.
Questions lenders ask
What is loan origination software?
Software that runs the process from application to funding. It stores the application and documents, runs checks, routes approvals and produces the offer and agreement for the lender's staff.
What is LMS in loans?
LMS stands for loan management system. It runs a loan after funding, including the repayment schedule, payments, arrears and collections. Some products combine an LOS and an LMS.
What are some examples of loan origination systems?
Vendors range from large bank platforms to systems built for non-bank and small business lenders. The business loan origination software guide compares the main kinds and names the platforms buyers weigh.
How is an intake agent different from an LOS?
An intake agent completes the application file by reading documents, checking facts and asking the applicant for what is missing. The LOS manages the loan process and holds the record. The agent can pass its file to the LOS.
Related terms
- AI intake agent: Software that completes the file before credit review
- Alternative lender: A lender that is not a high street bank
- Human in the loop: A person reviews and can change the result
- Credit memo: The lender's written case for a credit decision
Related pages
- Business loan origination software compared
- Business loan application intake for lenders
- Klarefi for independent business lenders
- All glossary terms
This page is general information for lenders. It is not legal, tax or credit advice.