In this article, we will explore the power of the loan origination system and how it transforms the lending landscape from paper to digital.

1. From Paper to Paperless: The Power of
Loan Origination Software
Overview
In a world that is rapidly moving towards digital
transformation, the financial industry is no exception. The
traditional paper-based loan origination process is being
replaced by an automated and streamlined software solution.
Loan origination software is becoming increasingly popular
among financial institutions, as it not only speeds up the
lending process but also provides enhanced accuracy and
security. In this blog, we will explore the power of the loan
origination system and how it is transforming the lending
landscape from paper to digital.
Introduction
Lending is an essential part of a financial economy, and the
process of loan origination is critical to any lending business.
Traditionally, loan origination has been a paper-based process
that is often slow, cumbersome and prone to errors. However,
with the advent of loan origination software, the process has
become faster, more efficient and more accurate.
A loan origination system is THE tool that streamlines the
entire loan origination process, from application to

2. disbursement. An end-to-end solution to enhance the
customer experience, simplify the lending workflow and
reduce the time and cost of origination. We are here to look at
the nitty-gritty of LOS and how it is changing your business
and taking it to the next level!
For you to understand how powerful the LOS tool can be for
you and your customers, let us take you through a journey of a
comparative study between paper-based and paperless loan
origination processes in each stage.
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solves challenges of banks & NBFCs
Paper-based Loan Origination Process v
Paperless Loan Origination Process
Imagine you are a borrower and need a personal loan
(unsecured). The above paragraphs clearly specify that you
can go two ways. But which way is better? We are going to
dive into each stage of the loan origination process in two
scenarios to analyse which way is faster, superior, user-friendly
and, most importantly, beneficial for lenders and borrowers.

3. ● You are taking a personal loan from a traditional financial
institution, and
● You are taking a personal loan using our loan origination
software, Cloudbankin.
Let’s go!
1. Enquiry, Checklist & Preparation of Documents
Traditional Cloudbankin
You visit a financial
institution (FI) to get a
personal loan.
You download the app from Google Play Store.
You wait for a loan
officer.
You click on “Apply Loan”. Different products like
personal loan, business loan, home loan,
education loan, etc., are displayed with their
features.

4. You state their loan
needs.
You choose the most suitable product according
to your loan needs.
You enquire about your
doubts and then
collect the checklist.
The app guides you to provide all information &
complete all requirements in each step to go
next.
You go back and
prepare all your
documents.
Your loan application is ready for submission.
Time Taken For This
Stage = 24 hours
Time Taken For This Stage = 3 minutes

5. 2. Submission of the Application
Traditional Cloudbankin
You return to the FI and submit
your documents like proof of
identity (POI), proof of address
(POA), bank statements, photos,
etc.
You submit documents as & when
needed. Only basic information is taken,
and data is verified against the
government portal. No scan & no
uploads are needed.
Time Taken For This Stage = 24
hours
Time Taken For This Stage = 2 minutes
Total Time Taken = 48 hours Total Time Taken = 5 minutes

6. 3. Verification of the Application
Traditional Cloudbankin
The physical documents are verified
against the originals produced.
You are verified via face-match
and video verification as and when
data is collected. Your
geographical position is also
located.
If the documents don’t match, you are
needed to revisit the FI with the
required documents, or FI sends
someone to your place for document
collection.
The process happens at every
stage. If you are not qualified here,
you are rejected then and there.
Time Taken For This Stage = 24
hours
Time Taken For This Stage = 2
minutes

7. Total Time Taken = 72 hours Total Time Taken = 7 minutes
4. Acceptance
Traditional Cloudbankin
The FI asks you to submit additional
documents if required. And when the
documentation is complete, the
acceptance is given to proceed further.
Verification & acceptance go
hand in hand. The rejection
happens immediately if there is
a deviation at any stage.
Time Taken For This Stage = 24 hours Time Taken For This Stage = 2
minutes
Total Time Taken = 96 hours Total Time Taken = 10 minutes

8. The result after this analysis? When you take a sneak peek at
the traditional process, it not only takes 4 days, but also you
have to leave every work behind to visit the organization again
and again for each stage and whenever they call you. They
even have to visit your place to verify you physically. It is really
bothersome and tiresome.
But, wow! Look at that! It took only 10 MINUTES for you to get
your loan using a digital LOS! You didn’t even have to move
from your place, and you completed the process totally online!
It was such a hassle-free process! Isn’t that amazing?
Hands down, in this case, a digital loan origination system
wins!
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the loan in 10 mins
Hence, you now realise how beneficial a LOS is from a
borrower’s point of view. But what about a lender’s
perspective? What would the scenario look like from a loan
officer’s point of view? Let’s recreate the same from a loan
officer’s perspective for each stage of the loan origination
process in traditional and Cloudbankin environments.

9. Let’s go!
5. Credit Appraisal
Traditional Cloudbankin
Here, the underwriting
team appraises in the
following steps.
1) Pull data from credit
bureaus’ reports and
analyse any discrepancies.
1. All 500+ data points are collected upfront
from CKYC, credit bureaus, bank statements,
alternate data like SMS Analyser, etc.
2. They are then fed into Cloudbankin’s rule
engine for instant eligibility decision and
generating loan offers.

10. 2) Validate the bank
statements, and arrive at a
disposable income.
3) Arrive at an eligibility
decision.
4) If yes, define how much
the loan amount is.
The team can also ask for
additional documents at
any step if required.

11. Time Taken For This Stage
= 24 hours
Time Taken For This Stage = 60 seconds
6. Loan Sanction & Post-Sanction Preparation
Traditional Cloudbankin
The sanction letter is issued
for approval.
Loan offer is issued right away after approval.
The list of documents
collected is shared.
It is done online. The app takes the borrower
through the journey.
Time Taken For This Stage
= 24 hours
Time Taken For This Stage = 3 minutes

12. Total Time Taken = 48
hours
Total Time Taken = 5 minutes
7. Agreement/Mandate Registration/Collection
Traditional Cloudbankin
The loan mandate is
physically filled.
The mandate is registered online.
The loan agreement is
physically signed and
submitted.
The agreement is e-signed and can be
downloaded from the application at any
point in time.

13. Loan repayment is also
done physically.
Loan repayment is automated here through
mandate collection.
Time Taken For This Stage
= 24 hours
Time Taken For This Stage = 3 minutes
Total Time Taken = 72
hours
Total Time Taken = 8 minutes
8. Loan Disbursement
Traditional Cloudbankin

14. Post-sanction checklist is verified &
approved by the concerned authority
of the FI.
The app’s automated workflow
handles the post-sanction
checklist.
Borrower’s account is set up &
disbursement is done physically.
Borrower is guided through the
process & disbursement is done
online.
Time Taken For This Stage = 24 hours Time Taken For This Stage = 3
minutes
Total Time Taken = 96 hours Total Time Taken = 10 minutes
The result? Here, the loan officer in the traditional loan
origination process has to go through each stage in a paper
documentation manner sitting from a physical branch. They
also have to ask the borrower to visit the branch of the FI for
documentation, including agreement and NACH signing. And
here also, to complete everything, it takes 4 days.

15. But for a digital LOS, all the stages are completed within the
app, which results in taking all documentation online. Even
the e-Mandate and agreement signing is done digitally.
Ultimately reducing the time to just 10 MINUTES!
All-in-all, in this case also, the digital LOS wins.
Hence, let’s collaborate on the overall analysis and see below
points on how the digital loan origination system triumphs
over the traditional loan origination process.
Benefits of Using a Digital Loan
Origination System
1. Processes 90% more applications than the traditional
process.
2. 70% decrease in cost per loan application from the
traditional process.
3. Able to disburse loans in just 10 minutes, which is a 99%
decrease from the traditional process.
4. Reduces human effort by 85%.
5. Reduces operational costs by 75% from the traditional
process.
6. Expanding geographically without creating any physical
branches.
7. Borrowers can avail of loans at any time from anywhere.
Hopefully, now you are able to grasp how powerful a digital
loan origination system is. Let’s expand that understanding

16. more by looking at the current trends and advancements in
its technology.
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loan origination system
Current Trends and Advancements in
Loan Origination Technology
LOS has come a long way since its inception. Here are some of
the most notable trends and advancements
● Complete cloud-based systems as they are cost-effective,
scalable and seamlessly integrated with other systems
and applications.
● Mobile-first solutions such as LOS are being designed to
optimize for mobile devices, with responsive designs,
simplified user interfaces and features like e-sign and
mobile document capture.
● AI is being used in a number of ways, from automating
underwriting processes to identifying potential fraud and
risk factors via face-match and video-match verifications.
It also helps lenders make informed decisions by
reviewing vast amounts of data and identifying patterns
and trends.
● Automation and digitization are moving lenders away
from paper-based processes and towards e-sign,
document capture, and other digital solutions.

17. ● Integration of 3rd-party data sources such as credit
bureaus, bank statements, government databases and
other FIs. It allows lenders access to a wider range of
real-time data.
● Increased focus on customer experience with features
like pre-qualification, instant approvals, and personalized
loan offers. This helps lenders attract and retain
borrowers while improving customer satisfaction and
loyalty.
Conclusion
In conclusion, the loan origination system has revolutionized
the lending industry by streamlining and automating loan
application processes, reducing potential errors, and
increasing operational efficiency. Using a cloud-based loan
origination software like Cloudbankin allows faster loan
processing times, increases transparency, reduces the cost per
loan application, reduces operational costs and enhances risk
management. Moreover, a LOS has the potential to change
the industry even more in the future with greater access to
credit and promoting responsible lending practices. Overall,
loan origination software is invaluable for any lender looking
to stay competitive and provide the best possible service to
their customers.