Loan officer

Definition

A loan officer is a financial professional who evaluates, authorizes, or recommends approval of loan applications for individuals and businesses. They work in various financial institutions including banks, credit unions, and mortgage companies.

5 Must Know Facts For Your Next Test

1. Loan officers assess the creditworthiness of applicants using financial data and credit reports.
2. They must understand different types of loans such as personal, business, mortgage, and auto loans.
3. Loan officers often use software to process applications and manage loan portfolios.
4. Communication skills are essential as they interact with clients to explain loan terms and conditions.
5. Regulatory knowledge is crucial because they must comply with federal and state lending laws.

Review Questions

• What role does a loan officer play in evaluating loan applications?
• Why is it important for a loan officer to understand different types of loans?
• How do regulatory requirements impact the job of a loan officer?

Related terms

Credit Analyst: A professional who assesses the creditworthiness of individuals or companies by analyzing their financial history.

Underwriter: A person who evaluates the risk involved in insuring people or assets and establishes premium pricing for accepted insurable risks.

Mortgage Broker: A middleman who connects borrowers with lenders but does not use their own funds to originate mortgages.