How to Build a Lending Platform: Technical Architecture Guide

Building a lending platform is one of the most complex fintech projects you can undertake. It requires handling sensitive financial data, integrating with multiple third-party services, implementing sophisticated underwriting logic, and ensuring compliance with federal and state regulations.

In this guide, we'll walk through the technical architecture of a modern lending platform, covering everything from the application workflow to payment processing and security requirements.

Core Components of a Lending Platform

1. Application Management System

The application management system is the entry point for borrowers. It collects personal information, business details, financial data, and supporting documents.

2. Underwriting Engine

The underwriting engine evaluates loan applications using rules-based logic, credit scoring models, and machine learning algorithms. It's the brain of your lending platform.

3. Payment Processing System

The payment processing system handles loan disbursements, repayments, and collections. It integrates with ACH networks, payment gateways, and banking APIs.

Technical Architecture

Database Design

A lending platform requires a robust database schema to handle applications, borrowers, loans, payments, and documents. We recommend PostgreSQL for its ACID compliance, JSON support, and strong ecosystem.

-- Core tables
CREATE TABLE borrowers (
  id UUID PRIMARY KEY,
  email VARCHAR(255) UNIQUE NOT NULL,
  first_name VARCHAR(100),
  last_name VARCHAR(100),
  ssn_encrypted TEXT,
  created_at TIMESTAMP DEFAULT NOW()
);

CREATE TABLE applications (
  id UUID PRIMARY KEY,
  borrower_id UUID REFERENCES borrowers(id),
  status VARCHAR(50), -- pending, approved, denied
  loan_amount DECIMAL(12,2),
  loan_purpose TEXT,
  submitted_at TIMESTAMP,
  decision_at TIMESTAMP
);

CREATE TABLE loans (
  id UUID PRIMARY KEY,
  application_id UUID REFERENCES applications(id),
  principal DECIMAL(12,2),
  interest_rate DECIMAL(5,4),
  term_months INTEGER,
  disbursed_at TIMESTAMP,
  status VARCHAR(50) -- active, paid_off, defaulted
);

CREATE TABLE payments (
  id UUID PRIMARY KEY,
  loan_id UUID REFERENCES loans(id),
  amount DECIMAL(12,2),
  payment_date DATE,
  status VARCHAR(50), -- scheduled, completed, failed
  ach_transaction_id VARCHAR(255)
);

API Architecture

Build a RESTful API using Node.js (Express) or Python (FastAPI). Structure your endpoints around resources and use proper HTTP methods.

Security Requirements

Security is paramount in lending platforms. You must protect sensitive financial data and comply with regulations like GLBA, FCRA, and state lending laws.

Third-Party Integrations

Credit Bureau Integration

Integrate with credit bureaus (Experian, Equifax, TransUnion) to pull credit reports and scores. Most lenders use a service like Credit Plus or Credco that aggregates all three bureaus.

Bank Account Verification

Use Plaid or Yodlee to verify bank account ownership, check balances, and analyze transaction history. This is critical for underwriting and fraud prevention.

Payment Processing

Integrate with Stripe, Dwolla, or a direct ACH processor for loan disbursements and repayments. Implement webhook handlers for real-time payment notifications.