17 Commercial Loan Underwriter Interview Questions and Answers

Commercial loan underwriters are responsible for the financial well-being of their institution by ensuring that the loans they approve are within the institution’s risk parameters. They also work to develop and maintain good customer relationships.

In order to be successful in this role, you need to be able to think on your feet, be well-organized, and have superb attention to detail. You should also be able to work independently, as you will often be the one responsible for making decisions on loan applications.

To help you prepare for your interview, we’ve put together a list of common commercial loan underwriter interview questions and answers.

Are you familiar with the Uniform Commercial Code?

The Uniform Commercial Code (UCC) is a set of laws that govern commercial transactions. The interviewer may ask this question to see if you have experience working with the UCC and how it applies to your work as an underwriter. In your answer, try to explain what the UCC is and why it’s important for underwriters to understand it.

Example: “I am familiar with the Uniform Commercial Code because I had to learn about it in my last role. Underwriting loans involves many different types of contracts, including sales agreements, leases and promissory notes. Each type of contract has its own set of rules, which are based on the UCC. Understanding these rules helps me make sure that each loan meets all legal requirements.”

What are some of the most important factors you consider when underwriting a loan?

This question can help the interviewer determine how you prioritize your work and what skills you use to complete it. Use examples from previous experience that show you understand the importance of each factor and how you apply them in your decision-making process.

Example: “I think the most important factors when underwriting a loan are the borrower’s credit score, debt-to-income ratio and their ability to repay the loan. These three factors are essential for determining whether or not a borrower is likely to pay back their loan on time. I also consider the property value and the purpose of the loan before making my final decision.”

How do you build rapport with clients?

Interviewers may ask this question to learn more about your interpersonal skills. They want to know how you interact with clients and build trust. Use examples from previous roles where you interacted with clients or customers.

Example: “I find that the best way to build rapport is by listening carefully to what a client has to say. I make sure to understand their goals, challenges and concerns. Then, I offer solutions based on my expertise. In my last role, I worked with several small business owners who were looking for loans to expand their operations. I listened to each of them as they explained their needs and helped them find loans that met their requirements.”

What is your process for verifying the accuracy of a client’s financial statements?

This question is an opportunity to show the interviewer that you have a process for completing your work and how it benefits clients. Your answer should include steps, such as verifying information with the client or other sources and comparing financial statements from previous years.

Example: “I first verify all of the client’s personal information, including their name, address, phone number and social security number. I then compare the most recent statement to the one from last year to ensure there are no discrepancies in income or expenses. If there are any changes, I contact the client to discuss them. This helps me make sure my clients can afford the loan they are applying for.”

Provide an example of a time when you had to decline a loan application. What was the reasoning behind your decision?

When an interviewer asks you to provide an example of a time when you declined a loan application, they are trying to understand how you make decisions and what your thought process is. This question can be challenging because it requires you to talk about something negative, but try to focus on the positive aspects of the situation.

Example: “In my previous role as a commercial loan underwriter, I had to decline a loan application for a small business owner who was looking to expand their company. The reason I had to decline this loan was because the applicant did not have enough collateral to cover the amount of money they were requesting. I explained to them that we could offer other options such as a smaller loan or a line of credit.”

If a client suddenly defaulted on a loan, what would be your first course of action?

This question is an opportunity to show your problem-solving skills and ability to work under pressure. When answering this question, it can be helpful to describe a specific situation in which you had to act quickly to resolve the issue.

Example: “If a client suddenly defaulted on their loan, I would first try to contact them to find out why they haven’t made their payments. If they were unable to make their payment due to extenuating circumstances, I would see if there was anything we could do to help them get back on track with their payments. If they weren’t able to pay because of financial hardship, I would look into ways that we could modify their loan so they could afford to make their monthly payments.”

What would you do if you noticed a mistake in a client’s financial statements?

This question can help the interviewer assess your attention to detail and problem-solving skills. Use examples from previous work experience where you noticed a mistake, but also how you fixed it or communicated with the client about the error.

Example: “In my last role as a commercial loan underwriter, I noticed that one of our clients had entered their annual revenue in dollars instead of thousands. This was an easy fix because I simply changed the number to thousands and recalculated the rest of the financial statement. However, I did let the client know so they could double-check their numbers before submitting them again.”

How well do you handle stress while working?

Working as a commercial loan underwriter can be stressful at times. Employers ask this question to make sure you have the ability to handle stress and remain calm while working. In your answer, share how you manage stress in your life. Explain that you are able to stay focused on your work even when it’s challenging.

Example: “I am someone who is naturally organized and detail-oriented. This helps me keep my stress levels low while working. I also try to take breaks throughout the day to help myself relax. When I feel stressed or overwhelmed, I find ways to calm myself down so I can focus on my work again.”

Do you have any experience working with vendors?

Loan underwriters often work with vendors to ensure they have the information needed for a loan application. Employers ask this question to make sure you’re familiar with working with outside parties and can complete tasks independently. Use your answer to explain that you’ve worked with vendors in the past and provide an example of how you did so.

Example: “In my previous role, I was responsible for contacting vendors to request financial statements and other documentation we needed for loans. I would send out emails requesting these documents and then follow up if I didn’t hear back within a few days. This helped me ensure all necessary paperwork was submitted on time.”

When working with clients, what is your approach to building trust?

When working with clients, it’s important to build trust. This question helps employers understand how you’ll interact with their customers and help them feel comfortable when applying for a loan. In your answer, explain what steps you take to ensure the client feels at ease throughout the process.

Example: “I believe that building trust is an essential part of my job as a commercial loan underwriter. When I meet with a client, I make sure they know I’m here to help them through the entire application process. I also try to be transparent about any information they may not know or understand. For example, if there are any changes in interest rates or other factors that could impact the loan, I let them know right away so they can plan accordingly.”

We want to ensure that our underwriters are knowledgeable about the latest financial trends. What types of financial products and services have you underwritten in the last five years?

This question helps the interviewer determine your experience level and how you’ve grown professionally. Use examples from your resume to highlight your professional growth, including any certifications or training you’ve completed.

Example: “In my last role as a commercial loan underwriter, I worked with clients who were looking for financing on new construction projects, renovations and equipment purchases. In addition to working with traditional lenders, I also helped my clients apply for grants and tax credits that could help them finance their projects more affordably. This helped me learn about different types of financial products and services available to businesses.”

Describe your experience working with a team of financial analysts.

When working in a financial institution, it’s likely you’ll be part of a team. Employers ask this question to make sure you’re comfortable collaborating with others and that you can work well as part of a group. In your answer, explain how you’ve worked with teams in the past and what made those experiences successful.

Example: “In my previous role, I was part of a small team of commercial loan underwriters. We met once a week to discuss our progress on current loans and any challenges we were facing. This meeting helped us stay motivated throughout the week and learn from each other. It also allowed us to share ideas for new ways to streamline our processes.”

What makes you an ideal candidate for this position?

Employers ask this question to learn more about your qualifications and how you can contribute to their company. Before your interview, make a list of all the skills and experiences that make you an ideal candidate for this role. Focus on highlighting your most relevant skills and abilities.

Example: “I am passionate about helping businesses succeed. I have worked in commercial lending for five years now, and my goal is to help small business owners get loans they need to grow their companies. In my previous position, I helped many small businesses secure loans so they could purchase new equipment or hire more employees. This experience has given me valuable insight into what it takes to be successful in this industry.”

Which industries do you have the most experience working in?

This question is a great way for the interviewer to learn more about your experience and how it relates to their company. When answering this question, make sure you mention industries that are similar to the one you’re interviewing for. This shows the employer that you have relevant experience in the industry they operate in.

Example: “I’ve worked mostly with small businesses looking for commercial loans. I also have some experience working with real estate developers who need financing for large projects.”

What do you think is the most important aspect of customer service?

Customer service is an important part of working in a financial institution. Interviewers ask this question to make sure you understand the importance of customer service and how it relates to your role as a commercial loan underwriter. In your answer, explain what you think makes for good customer service and how you would apply that skill to your work as a commercial loan underwriter.

Example: “I believe the most important aspect of customer service is making sure customers feel heard. I always try to listen carefully to my clients so I can fully understand their needs. Then, I use that information to find solutions that meet those needs while also being beneficial to the bank. For example, when I was working at my previous job, I had a client who needed a large loan to open up a new store. I listened to them talk about why they wanted to expand their business and used that information to help them get the loan they needed.”

How often do you make recommendations on whether to approve or deny a loan application?

This question can help the interviewer understand how often you make decisions that affect a company’s bottom line. It can also show them whether you’re comfortable making these types of decisions and if you have any experience doing so. When answering, try to highlight your decision-making process and provide examples of when you’ve made recommendations in the past.

Example: “In my current role as a commercial loan underwriter, I review applications for loans on a daily basis. In most cases, I recommend approval because it’s better for the bank to approve a loan than deny one. However, there are times when I recommend denial based on the applicant’s financial history or other factors. For example, I recently denied a loan application from a small business owner who had a good credit score but was requesting more money than they needed. I recommended denying this loan because it would have put the company at risk.”

There is a risk that a client may default on a loan. How would you factor this into your underwriting decision?

The interviewer may ask you a question like this to evaluate your risk management skills. In your answer, explain how you would assess the likelihood of default and incorporate it into your decision-making process.

Example: “I understand that there is always some level of risk when underwriting loans. However, I am committed to thoroughly assessing all factors before making my decision. If I feel that a client has a high chance of defaulting on their loan, I will discuss this with my manager or supervisor to determine if we can find ways to mitigate the risk. For example, I might suggest offering a lower interest rate or extending the length of the loan.”