For most people, the only way they can buy a high-priced item like a college education, house, or car is by taking out a loan. Loans are also essential for people who want to start their own business, as they need to purchase inventory, building supplies, and equipment. Loan officers get the ball rolling on loans by helping these people apply for loans. First, the loan officer gathers the borrowers’ personal information regarding their trustworthiness and the likelihood that they will repay the loan. The loan officer provides guidance to borrowers who have a hard time qualifying for traditional loans. Usually this means figuring out the most appropriate type of loan for the borrower and explaining the specific restrictions and requirements associated with that particular loan, so that the borrower makes an informed decision.
The process of guiding a prospective borrower through the process of acquiring a loan starts with a telephone call or a face-to-face meeting. During this interaction, the loan officer ascertains the purpose of the loan and goes over the credit terms and different types of loans available to the borrower. The loan officer will also answer any questions the borrower has about the process and may also assist him with the filling of the application form and any other paperwork.
After the borrower fills in the application, the loan officer analyzes and verifies the information in the application to determine the prospective borrower’s creditworthiness. Usually the loan officer can quickly access the borrower’s credit history and get their credit score, which essentially represents the borrower’s creditworthiness. If the credit history is for some reason not available or if there are extraordinary financial circumstances, the loan officer may ask for more financial information from the borrower. He may also ask for the copies of the business’ financial statements if the application is for a Commercial loan. The loan officer incorporates all these information along with his comments in the loan file. This loan file is used to determine whether the loan meets the lender’s conditions. The loan officer then consults with his or her Manager and decides whether or not they will grant the loan. If the loan is actually approved, a repayment schedule is set up with the borrower.
Most loan officers specialize in mortgage, commercial, or consumer loans. Mortgage loans are taken out to buy real estate or to refinance a pre-existing mortgage. Commercial loans, also known as business loans, help businesses expand operations or pay for new equipment. Consumer loans include personal, home equity, and automobile loans. As banks and other financial institutions roll out new types of loans and other financial services, the loan officers have to learn about these new products.
Quite often, loan officers are called upon to act as salesmen. For example, commercial loan officers will often contact firms to see if they need any loans. If the firm is seeking a loan, the loan officer will try to convince the firm to take out the loan from the bank or financial institution that they represent. Likewise, mortgage loan officers build relationships with residential and commercial real estate agencies in the hope that their agents will recommend a specific loan officer to the property buyers if they happen to require a loan.
Loan officers who specialize in determining a borrower’s creditworthiness by conducting a financial analysis and risk assessments are loan underwriters. Loan collection officers are loan officers responsible for contacting clients who are delinquent with their loan payments. The loan collection officers help them to find a way to repay so that they do not default on their loan.
Education
Most loan officers have a bachelor’s degree in economics, finance, or a similar degree. However, some loan officers do not have a college degree. Such loan officers start as a customer service representative or a teller and work their way up through the company. To be a loan officer you need to be good with people, highly motivated, confident of your abilities, and willing to attend community events as a representative of your employer. Good communication skills, sales ability, a strong drive to succeed, and a familiarity with computers are also important qualities to have if you want to be a loan officer.
Salary
As with any other job, the salary of a loan officer can vary widely depending on where you live and the level of your ability. Many financial institutions have very good incentives in place for loan officers who can get good clients to sign up for loans. The average salary for loan officers in May of 2006 was $51,760. This is only the median, however, and many loan officers’ salaries goes into six figures.
Conclusion
If you are a right-brained, math-oriented individual with an eye for detail, a career as a loan officer can be very rewarding for you. Many business- minded people do very well as loan officers. . Loan officers are required to be friendly with good interactive skills who can at the same time be firm if the need be. A lucrative career awaits those having these skill sets.