If you’re interested in finance and figures, and have excellent interpersonal skills then you might like to become a loan officer.
A loan officer collects information from an individual or a company in regards to a loan, and then analyzes their financial data to determine whether the bank or financial institution they work for should give them the loan.
Many of the loans are for property, but a loan officer could also be responsible for personal loans or car loans.
Banks also lend money for new businesses or large-scale development projects, such as building shopping malls or developing new estates.
The role of a loan officer is three-fold.
First of all, they must look for new business and convince the individual or company to give their business to the bank they represent.
They must then look after the administrative side of a loan, and fill out necessary documentation.
They then move on to the financial side of their role, looking at things like interest rates and other risk factors.
Education Requirements to Become a Loan Officer
To become a loan officer the minimum educational requirement is a high school diploma or GED.
You could then be trained on the job to learn the financial and administrative skills required for the role, usually over a period of three to six months.
This would allow you to work with customers looking for home loans, or other personal loans.
If you are interested in becoming a commercial loan officer then you will need a college education.
An ideal qualification would be a four year bachelors degree with a major in finance or accounting.
You would also receive some on the job training.
Many loan officers have previous experience in banking, and they may have worked as a banker, or in customer service and then have been promoted to the role of loan officer.
Loan Officer Job Description
A loan officer takes a clients application for a loan for a bank, and then does the necessary processing to determine whether or not the bank should lend the applicant the funds.
When you become a loan officer, your role will begin with meeting with your potential clients and speaking about their requirements.
You might like to suggest potential products with them, and also explain the loan application process.
You might also talk about things like loan fees and interest rates.
You’ll the fill out some paperwork, and take personal details from your clients.
Employment information and income details, for instance.
After your meeting you’ll process the loan.
Often this involves using computer underwriting systems which will determine the amount of risk involved for the bank in lending the money.
Some, but not all, roles as a loan officer require a certain amount of salesmanship.
While some roles are simply about writing business in others are more of a sales role.
Good communication skills and confidence will prove essential in these kind of roles.
Here are some of the tasks of a loan officer:
- Scheduling appointments with clients
- Looking for new clients
- Meeting with clients
- Discussing financial requirements
- Suggesting loan products
- Completing forms and paperwork
- Analyzing risk
- Preparing loan contracts
Loan Officer Salary and Career Path
When you become a loan officer you will spend the first few months competing some on the job training.
Once you get the hang of things, you’ll be able to work independently.
In some situations you will need to find your own clients, more often than not they will come to you.
The median salary for a loan officer is $54,000 a year.
The top 10% of earners make over $106,000 a year.
Some loan officers are paid a salary, particularly in big banks.
Other work on commission, or on a bonus system, where their wage depends on the amount of business they write.
Some loan officer go on to supervise other staff or become department heads.
Other become bank managers.
Some similar roles to that of loan officer include:
If you’re interested in finance and also want to work in a role where your regularly interact with people, then you might like to become a loan officer.
There is secure employment and a good salary available, as well as the opportunity to earn a nice bonus in some roles.
Frequently Asked Questions
What does a loan officer do?
A loan officer is someone who, in most cases, works for credit unions, mortgage companies or commercial banks.
A professional knows everything about all the different types of loans and can explain to the applicants what exactly they have to do in order to qualify for a loan that they need.
A loan officer might specialize in a single type of loans – commercial, mortgage or consumer.
The typical responsibilities of a loan officer include assisting the customers with loan applications, whether it’s for college, business, car or anything else; the specialist has to evaluate the financial situation of the candidate and choose the best suitable loan plan for him; of course, a loan officer would have to determine the client’s ability to repay the loan (according to the requirements).
How much do loan officers make?
On average, loan officers can make a little more than $59.500 per year in the United States.
In case you decide to choose this career path, you can expect to earn anywhere between $30.000 and $118.000 annually.
An entry-level loan officer can earn around $14.50 per hour, while highly experienced professionals can earn $57 per hour and even more.
The salary would certainly depend on your experience, the company that you work for, and the location.
Loan officers in Connecticut, Illinois, and New York have the highest average salaries, for example.
How much does it cost to become a loan officer?
You don’t exactly need to have a bachelor’s degree in order to enter the field; however, a degree will help you apply for entry-level positions in the best companies and expect high salaries.
A year in a university will cost you anywhere between $8.000 and $30.000 (and more) depending on a variety of factors.
In case you want to specialize in mortgage loans, you would have to obtain a license.
To get a mortgage loan originator license, you would need to pay several fees (investigation, license, fingerprint, and processing); the total is about $500.
What is the demand for loan officers?
Between 2016 and 2026, the loan officer job market is expected to grow by 11.4%, which is close to the national average.
The career path will be able to provide good employment opportunities in the near future.
The candidates that possess a degree and various certifications will have higher chances of getting employed.
Bear in mind that the industry is mainly concentrated in Texas, Florida, and California.
How long does it take to become a loan officer?
In case you decide to go for a bachelor’s degree, it will take you four years to obtain one; an associate’s degree will require you to spend two years of your time.
A lot of companies are looking for candidates that already have on-job experience in the field; experience in sales, banking, and customer service is valued.
To be able to apply for your mortgage loan originator certification, you would have to complete 20 hours of pre-licensing education courses.