Understanding the terms used by financial institutions is difficult for a layperson. Very often terms are also used interchangeably even though they may mean completely different things. This mistake usually happens because not all of us are educated about financial institutions and not all of us are regular visitors of banks.

There are two financial roles we found that are often used interchangeably, although they mean completely different things. These two terms are loan officers and underwriters. Loan officers and underwriters are two terms that are directly involved in financial institutions like banks. However, they both have different roles.

This article will break down the meaning and roles of Loan officers and Underwriters and will help you understand how the two are different from each other.

Who are Bank officers and Underwriters?

Loan officers and Underwriters have one thing in common, they work in departments that deal in loans and the process of acquiring them. While one plays a part in the former stage, the other plays a part in the latter stage.


Who are the people we often interact with?

Although both Bank Officers and Underwriters are vital in the process of getting loans, you may never interact or get to see underwriters.

This is because loan officers are the ones who talk to you, understand your needs, and help you with the formal process of acquiring a loan. The loan officer is thus, the one who helps you navigate through the entire process of getting a loan and the paperwork that comes with it.

On the other hand, Underwriters are the ones who review your documents, analyze them and then determine whether you are eligible or not for a loan. Underwriters are thus, vital for banks and other financial institutions as they minimize the risks of people being unable to pay back their loans. Without the function of underwriters, banks may end up loaning out money to people with a higher risk of losses.

It is probably for the same reason that underwriters do not really meet their clients, as they can take an objective decision of loaning out money to the right people, and do not get emotionally swayed.

What are some of the major duties of a loan officer and an underwriter?

Loan officer:

  • Understands the nature of the bank and the loans it provides and accordingly recommend or connect people to the loans that are eligible for them.
  • They also are responsible for collecting all the required data and documents of clients that will be used later by underwriters.
  • Once loans are approved, Loan officers have to curate payment schedules for their clients and accordingly keep track of the same.


  • Underwriters must be aware and stay up to date with all guidelines, rules and regulations for financial institutions set by the government
  • They must review, analyze and approve loan requests of clients
  • Underwiters are also required to know the financial situations of the bank, the upcoming trends in the markets and accordingly recommend changes to the authorities.


As we have read from the above, loan officers and underwriters have different roles with different job descriptions. Just like you may have done this time to clear your doubts about both the roles, always look up things if you have a doubt about it.

Are you someone interested in becoming a loan officer? HERE is a must-read article for you that explains how you can become one without a degree. Click HERE to learn about the education and career roadmap of a loan officer.

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