Loja has a variety of hotel options for visitors, from $5 per night hostels (Londres Hotel), to comfortable, elegant hotels (Casa Lojana) and everything in-between.
If you’re looking to sleep cheap, head to the old town. West of the central square, you’ll find an array of budget hostals in varying states of upkeep and cleanliness. The best of them is Hostal Las Orquideas and Londres Hotel: there are many more. The old town is a bit noisier than other areas of Loja, but if you’re on a tight budget, you’re pretty much stuck there.
Loja is still an inexpensive town, and there are several good hotel deals in the mid-range category. Quo Vadis is new, and its rates are still low for the time being. The Hostal Aguilera Internacional is a good choice and has rates which compete with some of the pricier downtown locales.
The best hotel in town is probably Casa Lojana, set in a converted home outside of town. In the Centro Histórico, the seen-better-days Hotel Libertador <//a>is a good option for families with kids, as it has a pool, restaurant, sauna, etc. and it’s also very centrally located.  
One thing to always bear in mind when selecting lodging in Loja is that prices are relatively low there: unless you're on the tightest of budgets, you may want to spend a little more. For the cost of a lower mid-range hotel in Quito, you can stay at a nice mid-range or business-class hotel in Loja.