Lending Lifecycle State Machine

System diagram

Architectural overview

A loan moves through defined states: application → decision → disbursement → active → repayment → closed (or default). Model as a state machine; emit events on transitions for downstream systems and reporting.

Tradeoffs

• Strict state machine prevents invalid transitions but requires explicit handling of edge cases (e.g. cancellation).

Scaling considerations

Partition by loan id or tenant. Event stream enables async consumers (collections, accounting). Use idempotent event handling.

Common pitfalls

• Allowing transitions without validating previous state.
• Not emitting events, so downstream systems are out of sync.