Money, for better or worse, makes the world go around.
Whether it be buying a house or starting a business, it’s typical that a lot of money is required.
That kind of money is usually not something that someone has just lying around in their bank account.
That’s where loan officers come in.
When you need an amount of money, substantial or not, often the deciding factor is a loan officer.
Being in the know about how to obtain funds is helpful for the community and businesses.
Is it a career worth investing in, though?
Here, we take a look at the positives and potential negatives of being a loan officer.
Table of Contents
- Pros of Being a Loan Officer
- Cons of Being a Loan Officer
- 14 Pros and Cons of Being a Loan Officer – Summary Table
- Should You Become a Loan Officer?
Pros of Being a Loan Officer
1. Knowledge is Power
A big difference between someone struggling with money and someone who isn’t is often knowledge.
Knowing what it takes to qualify for a loan and understanding things like interest rates is a big step when it comes to building personal wealth.
Even if the goal is buying a house, there are plenty of hoops to jump through to make that a reality.
Having the knowledge means you can not only elevate your own financial status in life, but you can help others.
Being able to have someone come into your office and ask for a loan takes a lot of courage.
Getting turned down for a loan can be devastating.
As a loan officer, you can take that disappointment and provide that person with the education they need to be able to qualify.
The more people who qualify and are able to see their loan through, the better everyone will be.
2. Work-Life Balance
For most loan officers, the work life is a quiet one.
You go into an office and leave at the end of the work day.
Since a majority of the work is with banks, taking work home is not part of the life.
That also means your weekends are yours.
Of course, this is the ideal situation for a loan officer, but it should not be accepted as the only one.
While most working loan officers have this kind of schedule, depending on the specific industry you work in, this might vary some.
There are loan officers with longer hours in more high-pressure environments, but that’s more an exception than the rule.
3. Upward Mobility
While there may not be a real corporate ladder when it comes to loans, there are ways to advance in the career.
For example, if you work with home loans, you can work up to mortgage broker.
There are a multitude of places you can work and ways to use the lending experience in other areas.
At some point, you may think, “Why not work for myself?”
This skill set is a really convenient one to have personally and professionally.
4. Low Starting Threshold
As the cost of living continues to skyrocket, many young people are rethinking what post-high school means.
For many, it has always been an expectation to go to college.
These days, the costs are starting to outweigh the benefits thanks to student loans.
When it comes to lending, loan officers do not need to have a degree to get started.
To be fair, you can’t just wake up one day and start approving business loans, but you also won’t need to pay for four years of college to qualify.
What you need is a license, which is accompanied by some short form of education.
Each state has its own requirements, so be sure to look into the policies.
5. Community Impact
As mentioned, having the knowledge to share with others about how to get approved for a loan can go a long way.
Many people, especially in areas plagued with unemployment and crime, are too intimidated to walk into a bank to ask for a loan.
It’s quite possible that some of those potential customers qualify right now but they have no idea.
There’s a lot that can be done for a community when knowledge is spread and citizens are able to upgrade their situation.
Small, local businesses can create such a positive impact on an area that crime is driven off and jobs are available.
As a loan officer, you can help make that happen through education and fostering the courage to apply for loans.
6. Variety of Employment Options
There is no need to be stuck in one place as a loan officer.
When you think of loans, the majority are business, mortgage, or commercial loans.
Small personal loans are also an option.
That means you can work for banks, credit unions, mortgage companies, or really any financial institution.
7. Low-Stress Workplace
Because of the nature of the work, the environment is pretty low-key.
Envision an office in an air-conditioned building where you meet one on one with customers and do paperwork.
That’s sort of the ideal scenario for many people when it comes to a career.
A workplace like this is especially expected if employed by a big bank or well-known lending service.
If you haven’t noticed, banks have nice schedules in comparison to the rest of the corporate world.
Since a lot of the work is bank related, the schedule is pretty similar.
Cons of Being a Loan Officer
1. Constant Need for Leads
Depending on the establishment, you may or may not have a lot of business coming in through the door.
A place that is well known or that regularly promotes services is more likely to see a regular influx of customers.
When there’s not, it can be tough.
The whole job depends on successfully loaning out money.
If no one is coming in and asking, that really slows things down.
Some companies are more helpful than others in regard to leads, but it can definitely be an issue.
2. Costly Mistakes
When dealing with money, mistakes can really add up.
Even if you work for a bank with a massive amount of resources, it would not be uncommon to have mistakes fall back on you.
Working with sometimes millions of dollars, companies aren’t very forgiving of human error.
It’s possible if you mess up big time, your boss will be looking at you to comb over the problem.
3. Ebbs and Flows of Industry
Any adult who has been around for a while knows all about inflation and how volatile the markets can be.
Depending on the economy, the demand for loans can be out of this world or in the toilet.
It can be tough to watch the health of the economy fluctuate so much, particularly when it impacts your pay.
4. Lack of Support
Loan officers may work in an environment with plenty of others, but the job can still be isolating.
At the end of the day, there’s a heavy weight on the shoulders of the loan officer.
They are the ones who meet with clients and sometimes break bad news.
Wiggle room is not nearly as spacious as most people think it is.
So, getting help from higher-ups is unlikely.
5. Hitting Quotas
Having no control over the economy can be especially annoying when you have a boss.
You’d think a boss in the same industry would understand that but they don’t get paid the same way.
It’s their job to push you and your job to magically invent customers.
At least, that’s how they make it seem.
Hitting specific quotas can be great some years and nearly impossible in others.
That number is even more like a dark cloud when it could mean your job.
6. Fluctuating Income
Thanks to the ebbs and flows of the industry at large, the income can look very different depending on the year.
Some loan officers make a salary that doesn’t fluctuate, while others make a base salary that is incentivized by commission.
Commission sounds very inviting until you hit a bad year in the market.
On a positive note, having a base salary means you won’t exactly be working for free when your company isn’t flush with cash.
But it does mean having to be careful.
When the money is great, be diligent about putting some away for a rainy day.
7. Unfair Negative Feedback
You can’t mention being a loan officer without talking about the worst part: angry customers.
It’s unfair because sometimes people just aren’t good candidates to loan money to.
Perhaps they didn’t understand what was needed of them or they just had high hopes.
Whatever the case, it’s not unusual to get treated poorly for something you can’t do anything about.
14 Pros and Cons of Being a Loan Officer – Summary Table
|Pros of Being a Loan Officer||Cons of Being a Loan Officer|
|1. Knowledge is Power||1. Constant Need for Leads|
|2. Work-Life Balance||2. Costly Mistakes|
|3. Upward Mobility||3. Ebbs and Flows of Industry|
|4. Low Starting Threshold||4. Lack of Support|
|5. Community Impact||5. Hitting Quotas|
|6. Variety of Employment Options||6. Fluctuating Income|
|7. Low-Stress Workplace||7. Unfair Negative Feedback|
Should You Become a Loan Officer?
Becoming a loan officer can be extremely handy.
Not only will it provide you with firsthand knowledge of how to obtain needed funds, but it will also give you the chance to empower those around you.
This can leave you with a feeling of serving the community and watching it grow.
On the other hand, it can also be challenging to deal with rejection and angry customers.
People build up their entire lives working to accomplish goals that they need money to achieve.
Having to turn people down is a part of the job that is really draining.
However, if you can get past that, there’s a bit of flexibility and reliability in a career as a loan officer.