A background in accounting careers or a degree in accounting could prepare you to work as a loan officer. Loan officers typically are employees of banks or credit unions and are responsible for issuing loans to consumers.
Both individuals and businesses come to loan officers seeking loans. Individuals or families often need loans for large purchases, such as a car, a home, educational expenses, or home improvements. Businesses, especially when they are starting up, usually depend on loans to cover operating expenses, such as equipment, staff, and rent. In many cases, loan officers specialize within a given area, such as mortgages or commercial loans for businesses.
When an individual or business comes to a bank or credit union looking for a loan, a loan officer evaluates their ability to repay the loan. Loan officers examine credit scores, collateral, such as property or other assets, and employment history. In the case of a business seeking a loan, loan officers examine the business’s financial records and profit history, if the business is not brand-new. Sometimes, loan officers provide advice to individuals and businesses on how to improve their credit scores or potential to receive loans.
Loan officers prepare loan applications, but they are not responsible for accepting or rejecting potential borrowers. Loan officers send loan applications to underwriters who then evaluate the potential borrower, make a decision about whether or not to issue a loan, and determine the terms of the loan, such as interest rates and how long the loan will last.
Loan collection officers specify in working with clients who have missed some of their loan payments. Loan collection officers work with their clients to rework their loans to make it possible for them to repay. If a client default on a loan, then the client loses the assets or property pledged as collateral. Loan collection officers help ensure that this does not happen.
Loan officers essentially act as salespeople, selling loans to the individuals and businesses who need them. You will need good people skills to be a successful loan officer and will also need good communication skills to explain to your clients what kind of loans will suit them best. The many kinds of loans available vary with the current economic climate, so you will need to stay up to date on what you can present as options to your clients.
Maintaining a good professional network is essential to your success as a loan officer. For example, if you specialize in mortgages, having good relationships with real estate agents in your area can help draw in clients. Part of the job of a loan officer is to bring clients to your firm.
Because loan officers essentially sell loans, they are usually compensated with commission. Sometimes, a loan officer’s entire income is based on commission, and in other instances, a loan officer starts with a base salary and earns commission on top. Usually, larger firms offer more opportunities for advancement for loan officers than smaller firms. A bachelor’s degree is not required to work as a loan officer, but it is a great asset in getting hired and moving up in your career. Even if you do not have a bachelor’s degree, having taken classes in finance, economics, business, and accounting puts you in a good spot to pursue a career as a loan officer. Loan officers have many opportunities available for continuing education as well that will put you in a good position for the career you want.