The use of loan origination system (LOS) software is changing how brokers, lenders, and institutions process loan applications.
These software platforms help you streamline workflows, increase cost-efficiency, improve communications, reduce operating cost, and minimize errors.
Understanding the pricing structure of these LOS solutions can help you choose one that works for your business model and budget.
There are various expenses associated with implementing a LOS solution and you should understand how the technologies affect your costs:
If you choose to have an on-premise solution installed on your own local servers or hard drives, you have to pay a substantial amount upfront for software licensing and implementation. You'd also likely have to purchase additional hardware and hire a team to configure the software.
On the other hand, the upfront investment is often minimal when you use a cloud-based solution. There's no licensing fee and all you need are the devices your employees can use to access the Internet.
When you use an on-premise solution, you're responsible for the ongoing maintenance. You also have to allocate additional budget to purchase upgrades periodically. Vendors rarely offer extensive customer care and you'll need to account for the added cost of hiring an IT team with various expertise for ongoing support.
When you use a cloud-based LOS solution, the vendor will take care of all the ongoing maintenance, provide regular upgrades, and offer 24/7 customer support so you can reduce the overhead associated with IT resources and personnel.
If a server needs to be replaced or a software upgrade is required for an on-premise solution, you could incur a sizable unplanned cost that impacts your budget and cash flow.
Meanwhile, the subscription fee for cloud applications covers all the maintenance and upgrades so you don't have to worry about unexpected expenses. You'll also have more stability and predictability to better control your budget.
It's becoming increasingly costly to implement the many cyber-security protocols and stay compliant with strict industry regulations. When you use an on-premise solution, you're responsible for the cost associated with security and compliant, which is becoming prohibitive for many businesses.
Meanwhile, a cloud provider has a team of security experts to help ensure that the platform stays compliant at all times so you can eliminate the costs associated with IT security and avoid hefty penalties.
Most cloud vendors offer monthly, quarterly, or annual payment plans to suit the needs of your organization. For example, monthly payment allows you to distribute expenses throughout the fiscal year while an annual plan often costs less.
In addition, some vendors offer different pricing models, such as user-based, usage-based, and success-based:
To increase profitability, you need to manage the costs associated with running your business.
LendingPad offers LOS solutions with various pricing structures that work with your budget and suit the needs of your organization. See what's included in the Broker Edition, Lender Edition, and Institution Edition here.
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