Should it be required, Blues could recall the 20-year-old to the St. Andrew's Trillion Trophy Stadium in January 2020 as part of the deal.
Solihull-born Lakin has made just one first team appearance for Blues so far this campaign, when he played the full game against Portsmouth earlier this month in the EFL Cup.
Having made his Blues debut as a late substitute against Huddersfield in February 2018, Lakin has gone on to rack up 13 appearances in total.
In March he was rewarded with a contract extension, which runs until June 2021.
Stevenage, who are managed by Dino Maamriahave, made a disappointing start to their 2019/20 league campaign.
They have lost three of their opening four fixtures and drawn one of them.
They are next in action on Saturday when they play host to Macclesfield at their Broadhall Way Stadium.