What Is a Loan Officer?

Loan Officers Explained

Cheerful bank employee opens account for customer

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A loan officer works at a bank, credit union, mortgage company, or other financial institution to evaluate, authorize, or recommend the approval of loan applications.

Definition and Examples of a Loan Officer

In most cases, loan officers undergo the underwriting process to approve or deny you for loans. Once they receive your financial documents, they’ll determine your ability to repay the loan you applied for. They’ll look at your credit score, income, and other financial information.

Oftentimes, loan officers use special underwriting software, which looks at your finances and generates a recommendation. They typically use this software as well as their own review of your financial situation to help them come to an approval decision.

Loan officers may also assist you through the loan application process or suggest products and services that are a good option for your particular needs and wants.

For example, if you’re applying for a mortgage, you may work with a loan officer to secure your home loan. A loan officer can also be useful if you need a car loan, personal loan, student loan, or any other type of financing. 

  • Alternate names: Loan specialist, collection analysts, loan servicing officers, loan underwriters, payday loan officers, mortgage loan officers 


Loans officers may work in an office environment or meet with potential borrowers at their homes or businesses.

Loan officers often hold a bachelor’s degree in a business- or finance-related field. Those who don’t have a degree usually have work experience in banking, sales, or customer service. While each bank credit union, mortgage company, or other financial institution has its own training requirements, most of them have an in-house training program designed for new loan officers. For example, mortgage loan officers must complete courses and pass a national exam so they can obtain a mortgage loan originator (MLO) license.

How a Loan Officer Works

Loan officers can work at a variety of places and may work with different types of borrowers. They may contact you if they think you’re in need of a loan or to collect information and answer any questions you may have about the loan itself or the application process. If the application process requires a credit check or income verification, a loan officer will often take care of it.


While much of the loan application process can take place over the internet, loan officers are there to help over the phone or in person when needed.

Some loan officers specialize in a specific part of the loan process, like underwriting or payment collection. For example, if you have a secured loan and fail to make payments, a loan officer may be the one to seize the collateral to repay the loan. 

Loan officers also approve loan applications or send them to upper management so that a decision can be made. They may also review loan agreements to ensure they comply with state and federal regulations. 

Types of Loan Officers

Commercial Loan Officers

These loan officers offer business loans that help businesses cover the cost of equipment or operations. They usually collaborate with multiple banks to design a loan package that accommodates the large funding needs of many businesses. 

Consumer Loan Officers

Consumer loan officers focus on personal loans that can help everyday individuals pay for a wedding, vacation, college, or anything else. While they may not be involved with the underwriting process, because it’s often automated, these loan officers often guide potential borrowers through the application process and help answer questions. 

Mortgage Loan Officers

Mortgage loan officers focus on residential and commercial mortgages. They typically develop relationships with real estate agents and others who can refer them to prospective borrowers. They’ll likely be with the homebuyer through the entire homebuying process. 

Key Takeaways

  • Loan officers work at banks, credit unions, mortgage companies, and other financial institutions to help potential borrowers apply for loans. They’re often also involved in determining whether or not to approve applicants when that process is not automated.
  • There are several types of loan officers, including commercial loan officers, consumer loan officers, and mortgage loan officers. 
  • Most loan officers work in an office environment or travel to the homes and businesses of potential borrowers. You may also never meet in person, as they can also conduct their work over the phone.
  • If you ever plan on taking out a home loan, personal loan, auto loan, or another type of loan, you’ll likely work with a loan officer.
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  1. U.S. Bureau of Labor Statistics. "Occupational Outlook Handbook: Loan Officers." Accessed June 30, 2021.

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