TL;DR
- A loan officer evaluates, authorises or recommends approval of loans for people and businesses, in the words of the US Bureau of Labor Statistics, and advises borrowers on their financial status and payment methods, in O*NET's. The duties run from the first meeting with an applicant through gathering and verifying information, analysing creditworthiness, explaining the options, approving within limits or referring beyond them, and keeping the loan file complete.
- The BLS names five kinds: commercial loan officers on business lending, consumer loan officers on personal loans, mortgage loan officers on property, loan collection officers on accounts in arrears and loan underwriters on the credit decision itself. In the UK the equivalent titles include mortgage adviser, lending manager and relationship manager, and advising on mortgages is regulated work.
- Write the job description around the kind of lending, the lending limit and the referral route, the licence or qualification the law requires where you are, and targets that balance volume with credit quality and conduct. A degree in business or finance is usual; the BLS says relevant banking or customer service experience can substitute, and that mortgage loan officers in the United States must hold a licence.
A loan officer sits between two pressures: the applicant who wants the money and the institution that wants it back. Every duty in the loan officer job description serves one or the other, and the best officers serve both: they say yes quickly to the right applicants, no clearly to the wrong ones, and refer the ones above their limit to someone who can decide.
This article explains the job using two primary sources, the US Bureau of Labor Statistics handbook and the O*NET occupational database, sets out six duties, the five kinds of loan officer, the skills, training and licensing, the targets the role should be judged on and a job description template. The sources are American; the duties are the same in a British bank, building society or mortgage lender, though the titles and the regulation differ, and this is general information, not legal or regulatory advice.
Loan officers are judged on numbers, and volume targets alone make bad loans. See how New Dynamics Goals & OKRs keep volume, quality and conduct targets visible together, so the year is judged on all three.
What does a loan officer do?
The Bureau of Labor Statistics says loan officers “evaluate, authorize, or recommend approval of loan applications for personal and business purposes.” O*NET adds the advisory half: they “evaluate, authorize, or recommend approval of commercial, real estate, or credit loans” and “advise borrowers on financial status and payment methods”. Its sample titles include loan officer, mortgage loan officer, commercial loan officer, commercial banker and corporate banking officer.
The defining task is in O*NET's list: “Approve loans within specified limits, and refer loan applications outside those limits to management.” A loan officer holds a lending authority, decides within it and refers beyond it. The job description should state both the limit and the route.
Loan officer duties: six responsibilities
Grouped from the BLS duties and the O*NET tasks, the work has six parts.
- Meet the applicant. O*NET: “Meet with applicants to obtain information for loan applications and to answer questions”; “Work with clients to identify their financial goals and to find ways of reaching those goals.” The BLS lists contacting potential clients to assess their needs. For commercial and mortgage officers, this includes building relationships that bring applicants in.
- Gather and verify. The BLS: gather and verify financial information; O*NET: “Obtain and compile copies of loan applicants' credit histories, corporate financial statements” and other documents. Verification is where fraud and affordability problems are caught.
- Analyse creditworthiness. ONET: “Analyze applicants' financial status, credit, and property evaluations to determine feasibility”; the BLS: analyse creditworthiness using underwriting software. In many institutions the officer submits the application to credit analysts or underwriters for verification and recommendation, as ONET's tasks describe.
- Explain the options. O*NET: “Explain to customers the different types of loans and credit options that are available”; the BLS: explain loan types and terms. Where the explanation amounts to advice, it may be regulated; see below.
- Approve within limits or refer. O*NET: approve within specified limits and refer applications outside them to management. The BLS: make the final lending decision or escalate.
- Keep the file complete and compliant. ONET: “Review loan agreements to ensure that they are complete and accurate according to policy” and “Review and update credit and loan files”; the BLS: ensure compliance with federal and state regulations. ONET also lists handling complaints, keeping up with new products and marketing the institution's products.
Five kinds of loan officer
The BLS distinguishes five, and the job description should say which.
| Kind | Lending | What shapes the job |
|---|---|---|
| Commercial loan officer | Business loans for operations, expansion, equipment | Larger, more complex loans; financial statement analysis; relationships |
| Consumer loan officer | Personal loans: cars, education, unsecured credit | Higher volume; automated underwriting for simpler cases; office-based |
| Mortgage loan officer | Residential and commercial property | Referral relationships with estate agents and developers; licensing in the US |
| Loan collection officer | Accounts in arrears | Arranging payment plans; recovering secured assets; conduct and vulnerability |
| Loan underwriter | The credit decision itself | Financial analysis and underwriting software; less customer contact |
In the UK the titles differ: mortgage adviser, lending manager, business or relationship manager, and underwriter. Advising on mortgages is regulated work in the UK and requires an appropriate qualification and the firm's authorisation; check the rules where you are before writing the advert.
Skills, qualifications and licensing
Qualities. The BLS names decision-making skills for approval determinations, being detail oriented in reviewing applications, initiative in developing business and interpersonal skills for guiding customers. O*NET's essential skills are active listening, speaking, reading comprehension, critical thinking, writing, mathematics and active learning.
Education and training. The BLS says a bachelor's degree, typically in business or finance, is standard, that relevant experience in banking or customer service can substitute in some cases, and that new officers receive moderate-term on-the-job training combining formal programmes with mentoring. O*NET places the occupation in Job Zone Four: usually a degree plus several years of experience.
Licensing. In the United States, the BLS says mortgage loan officers must obtain a Mortgage Loan Originator licence through pre-licensing courses, a national exam and background checks via the Nationwide Multistate Licensing System, renewed annually. In the UK, mortgage advice is regulated and advisers need a recognised qualification. State in the advert which licence or qualification the role requires and whether you will sponsor it.
The numbers a loan officer is judged on
Targets for lending roles carry a known risk: an officer paid on volume alone writes loans that should not have been written. Balance the measures and say so in the advert. The examples are not benchmarks.
- Volume: loans originated, by number and value.
- Quality: approvals within policy, file completeness, audit findings, early arrears on the officer's book.
- Speed: time from application to decision.
- Customer: complaints, satisfaction, retention.
- Conduct and compliance: training completed, regulatory findings, fair treatment of vulnerable customers.
Our banking industry page explains how regulated lenders use balanced scorecards and rate the “how” separately from the “what”.
Loan officer job description template
Job title: Loan Officer, with the kind named: Commercial, Consumer, Mortgage
Reports to: Lending Manager, Branch Manager or Head of Credit
Scope: State the kind of lending, the typical loan sizes, the lending authority held and the referral route above it, the portfolio or branch and the territory.
Purpose: Originate sound loans within policy and authority, advise applicants clearly and fairly, and keep every loan file complete and compliant.
Responsibilities:
- Meet applicants, understand their needs and goals, and explain the loan and credit options available.
- Gather and verify financial information, credit histories and, for business lending, financial statements.
- Analyse creditworthiness and affordability; prepare applications for credit analysts or underwriters where required.
- Approve loans within the stated lending authority; refer applications above it with a clear recommendation.
- Review loan agreements for completeness and accuracy; maintain credit and loan files.
- Comply with lending policy and regulation; complete required training; treat customers fairly, including vulnerable customers.
- Develop business through referral relationships and existing customers; handle complaints and resolve them.
- Keep up to date with products, policy and regulation.
Skills and experience:
- Degree in business, finance or a related subject, or equivalent banking or customer-service experience.
- The licence or qualification the role requires where you operate; state it and whether it is sponsored.
- Financial analysis and credit judgement; attention to detail.
- Clear, honest communication with applicants; decision-making under policy.
- Initiative in developing business, within conduct rules.
Working pattern: State the hours, travel for commercial and mortgage roles, and any evening or weekend customer appointments.
Targets: Volume, quality, speed, customer and conduct measures, balanced and reviewed together.
Frequently asked questions
What does a loan officer do?
Evaluates, authorises or recommends approval of loans for people and businesses: meeting applicants, gathering and verifying financial information, analysing creditworthiness, explaining the options, approving within a lending limit or referring beyond it, and keeping the loan file complete and compliant. The US occupational database adds advising borrowers on their financial status and payment methods.
What are the main responsibilities of a loan officer?
Six groups: meeting the applicant, gathering and verifying information, analysing creditworthiness, explaining the loan and credit options, approving within limits or referring to management, and keeping files complete and compliant with policy and regulation. Business development and complaint handling sit alongside them.
What are the different types of loan officer?
The BLS names five: commercial loan officers on business lending, consumer loan officers on personal loans, mortgage loan officers on property, loan collection officers on accounts in arrears, and loan underwriters on the credit decision itself. UK titles include mortgage adviser, lending manager and underwriter.
What qualifications does a loan officer need?
The BLS says a bachelor's degree in business or finance is standard, that banking or customer-service experience can substitute in some cases, and that training is on the job. In the United States mortgage loan officers must hold a Mortgage Loan Originator licence; in the UK mortgage advice is regulated and requires a recognised qualification. Check the rules where you are.
How should a loan officer's targets be set?
Across volume, quality, speed, customer and conduct measures together, so that a strong volume result cannot hide poor lending or poor treatment of customers. Regulated lenders often use balanced scorecards for this reason.
Your next step: state the limit and the licence
- Say which kind of loan officer the role is and the typical loan sizes.
- State the lending authority and the referral route above it.
- Name the licence or qualification required where you operate.
- Set targets across volume, quality, speed, customer and conduct, and review them together.
For a way to write those targets so they can be measured, read and download our SMART goals guide. The guide is free to read, and the PDF uses our short download form.
Want loan officers' balanced targets, feedback and reviews in one place, with the conduct measures beside the volume ones? Book a New Dynamics demo and bring your current scorecard. You can also email contact@new-dynamics.com.
