How to become a Loan Officer

Loan officers are essentially representatives of a bank, a credit union or other financial agencies that evaluate, authorize and recommend approval of loan applications for individuals and businesses. A loan officer acts as the liaison between borrowers/applicants and the bank, credit union or other financial agency. Loan officers seek out the parties that wish to borrow money, guide them throughout the lending process, gather all the financial information, educate the applicants about the different options, fill out the necessary paperwork and approve the loan or forward the application to the management. Loan officers are generally employed by mortgage companies, commercial banks, credit unions, and other financial agencies. There are different types of specialized loan officers such as Mortgage loan officers, Consumer loan officers, Commercial loan officers, Loan Underwriters, Loan collection officers and so on. When it comes to a loan officer salary, some officers are paid a flat salary while others have a base salary plus commission for every loan they originate. Some loan officers also receive extra bonus or commission based on their performance. 

A loan officer assists customers with loan applications for cars, college tuition, and homes. They help determine the appropriate loans for customers and make them aware of the requirements and stipulations. These professionals can specialize in consumer, mortgage, or commercial loans and often work for banks, mortgage companies, or credit unions. Some loan officers travel to meet with clients in their businesses or homes.
Loan officers determine whether or not individuals and corporations qualify for loans from banks and other financial institutions. They examine the financial records of loan applicants and apply underwriting principles and formulas to determine their ability to repay a loan. Loan officers may look at applicants’ income, job stability, debt-to-income ratio, and liquid assets to evaluate the risk of lending to them.

A large part of a loan officer’s job is sales and customer service. Some types of loan officers, like mortgage originators, must find their own clients, and loan officers who work for banks and credit unions are expected to generate new business for their employer. Once they have a client to work with, loan officers must communicate with them to determine their needs and answer any questions they may have.

The roles and responsibilities of a loan officer are: 

• Seek out and contact companies or individuals to ask they require a loan

• Promote and sell the products and services of the lending institution

• Correspond and meet with loan applicants to understand and enquire about their profile and why they need the loan

• Evaluate the applicant’s needs and explain the different types of loans and all the related details and terms

• Verify financial, and personal information of the applicant

• Decide if the applicant should be granted the loan by analyzing the applicant’s finances

• Approve loans or forward the case to the management for a decision 

• Solicit new business by attracting potential clients

Computer proficiency: Job candidates for loan officer positions should be familiar with computers and software applications related to banking.
Analytical skills and perception: You'll be required to accurately assess clients' financial statements to ensure their creditworthiness.
Attention to detail: A successful loan involves many interlocking and sometimes minuscule details, and you can't overlook any of them.
Salesmanship: The bottom line is that you're selling a product. You might have to persuade clients, as well as superior finance personnel to go along with your recommendations.