When someone applies for a personal loan, there are a lot of moving parts and key players involved. While each lending institution will have their own unique process in place, loan applicants can expect to come across a loan officer, loan processor, or an underwriter.
There’s a decent amount of overlap in these roles, so to get some more clarity on who does what, let’s take a look at a loan officer vs. loan processor vs. underwriter.
What Is a Personal Loan Officer?
A loan officer evaluates loan applications and determines whether or not to recommend them for approval. A personal loan officer is a specific type of loan officer that focuses on personal loans. Personal loan officers are generally employed by credit unions, banks, and financial institutions.
Generally, a personal loan officer takes on the following job responsibilities:
• Contact potential borrowers to see if they need a loan.
• Work with loan applicants to gather information required for the application.
• Walk applicants through the different loan types available to them and their unique terms.
• Collect, verify, and review an applicant’s financial information (e.g., credit score, income, and other factors).
• Review any loan agreements to confirm they are in compliance with all state and federal regulations.
• Approve loan applications or pass them onto management for a final decision.
A major part of a personal loan officer’s responsibilities happen during the underwriting process. This process is used to determine if an applicant qualifies for the loan they are applying for. Once a loan officer collects and verifies all of the necessary personal and financial information about an applicant and any corresponding documents, the loan officer will assess the applicant’s need for a loan and their ability to repay it on time.
A loan applicant working with a loan officer can turn to them about any questions they have about what a personal loan is or about the application process. A personal loan is a type of consumer loan and consumer loan officers may use a fully automated underwriting process using software or they may complete it themselves (which is more often the case with smaller banks and credit unions).
What Is a Personal Loan Processor?
A personal loan processor, also known as a loan interviewer or loan clerk, is responsible for interviewing applicants and other necessary parties to obtain and verify the financial and personal information required to finish the personal loan application. Once the applicant is approved for the loan, the personal loan officer will prepare any documents required for the appraisal and the closing of the personal loan.
What Does a Personal Loan Processor Do?
The personal loan processor serves as a liaison between the financial institution issuing the loan and the applicant to make sure that qualified applicants can secure a loan in a timely manner. The loan processor will also help applicants decide which loan product is the best fit for their financial needs and goals. For example, if an applicant is experiencing financial hardship, the loan processor can help them set up debt payment plans.
Review Your Application
A loan processor receives, collects, distributes, and evaluates applicant information required to complete the loan application. They can approve or deny an applicant.
Verify Your Information
Personal loan officers are tasked with interviewing applicants and other necessary parties in order to verify any financial and personal information that must be evaluated during the application process.
As a part of the verification process, they will also request and collect any necessary documents from the applicant. They are also responsible for preparing any documents required for the appraisal and closing process.
Third Party Reports
In addition to collecting documentation from the applicant, the personal loan processor will work with third parties to obtain any necessary documents and reports, such as the applicant’s credit report.
Is a Personal Loan Processor the Same as an Underwriter?
While there is some overlap between what a personal loan processor and an underwriter do, these are two different roles. A loan underwriter focuses on evaluating how creditworthy an applicant is by collecting and evaluating an applicant’s financial information. Typically, they then use loan underwriting software to make an approval or denial recommendation.
A loan processor also reviews how eligible an applicant is for a loan by collecting and verifying important information and documents, but they don’t use underwriting software to make a decision. The loan processor has the ability to approve or deny an applicant.
|Collects and verifies applicant information||Collects and verifies applicant information|
|Makes approval decision||Uses underwriting software to determine eligibility|
|Prepares documents for appraisal and closing|
Is a Loan Officer or Loan Processor Responsible for Your Personal Loan Approval?
When it comes to loan processor vs. loan officer, both loan officers and loan processors have the ability to reject or deny a loan application or at the very least make a recommendation for whether or not an applicant should receive a loan.
When Does a Personal Loan Processor or Officer Get Involved?
When someone applies for a personal loan, they’ll connect with a personal loan processor or officer when they submit their initial application. Either one can start the process of collecting personal and financial information and supporting documentation from the applicant.
What Happens During Personal Loan Processing?
During the personal loan processing stage, the applicant will work with the personal loan processor to provide them with any personal information, financial information, or documentation that the personal loan processor needs to finish their application.
Getting Approved for a Personal Loan
Getting approved for a personal loan requires going through the underwriting process which assesses how qualified a loan applicant is. Some firms use underwriting software to make a decision whereas others make the decision without the aid of software.
When comparing a loan officer vs. loan processor, it’s clear that both loan processors and loan officers play an important role in the personal loan application process. Their roles often overlap and where they work determines the exact role they take on.
Personal loan applicants who might not want to go through a long underwriting process can view their SoFi personal loan rate in just one minute. Once approved, they can receive their personal loan funds that very same day.
Is a personal loan processor the same as an underwriter?
No, a personal loan processor is not the same as an underwriter, although they share similar responsibilities. A loan underwriter determines whether or not an applicant is creditworthy. A loan processor collects and verifies any personal and financial information required to complete loan applications.
What does a personal loan processor do?
A personal loan processor works with personal loan applicants to gather the information and documents needed to complete their applications. A personal loan processor also prepares appraisal and closing documents.
When does a personal loan processor or officer get involved?
A personal loan processor or officer gets involved once a consumer starts the application process. They can help guide the applicant through that process.
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Photo credit: iStock/Delmaine Donson