The following are a few Loan Officer career and job hightlights:
Without a loan, most individuals would never be able to afford large purchases like a home, automobile, or higher education. In addition, most small business would never get off the ground without a loan. Loan officers help individuals and businesses in the loan application process. They collect client information, and assess their credit and ability to repay the loan. Loan counselors help individuals with bad credit or other problems get their life in order to improve the likelihood of loan approval. They help clients select appropriate loans and clarify loan details. Often loan counselors share many of the same duties as loan officers. In credit unions, the titles are interchangeable.
Loan Officers often focus on one area, like consumer, mortgage, or commercial lending. Business use commercial loans to purchase supplies and equipment; individuals use consumer loans to buy cars, remodel houses, and make other large consumer purchases. Mortgage loans are used for real estate purchasing and re-financing. In order to best serve clients, loan officers must stay up to date with the increasing number and variety of available loans.
Sales is a large part of the Loan officer’s day. For instance, a commercial loan officer will use information about an organizations needs to try and convince business to choose their lending firms services. Likewise, mortgage loan officers focus on building camaraderie with real estate agencies in order to obtain referrals.
As soon as the client relationship has been established, loan officers assist them in filling out the application. Usually at an office or over the phone, the loan officer gathers personal information like credit scores and work history. In addition the loan officer explains different types of loans that fit the needs of the clients and details the credit requirements and other restrictions associated with the loan. Officers field client questions and often coach customers through every step of the application process.
Once the application is filled out, the officer obtains a clients credit score from a credit reporting agency and assesses and confirms all additional client information. If credit history is unavailable, officers may gather other information that can be used to determine whether or not a client is creditworthy. For commercial loans, a business’s financial records may be requested. Once all this information has been gathered, it is sent to an underwriter whose job is to determine whether the loan application is approved. Underwriters use information provided by loan officers in the application to determine whether or not a client’s status fulfills a lending firms pre-established conditions. Underwriters then decide with their supervisors if an application is approved. If the application is accepted, the details of repayment are then laid out with the customer. If a client can has property or assets he can use to back the loan then an application can sometimes be accepted that might otherwise be rejected. For instance some lending firms require a customer to use their home as collateral on a student loan. In the case of loan default, the property is sold to pay off the debt.
Loan collection officers work solely with customers who have not been making their payments. They assist a client in creating repayment arrangements so that they don’t default on their obligation. If clients cannot make their payments then loan collection officers coordinate the sale of collateral to satisfy the loan.
In addition to a finance or economics degree, most companies want loan officers with technical and computer banking training. Sales experience is important, particularly for commercial and mortgage loan officers. individuals who have not completed college degrees must rely on industry work experience in related positions in order to climb their way up to become loan officers.
A license is not required for counselors and officers who work in banks and credit unions. Licensing qualifications are different in each state for counselors and officers who work at brokerages and mortgage banks. The qualifications may even differ depending on which you work at.
There are many schools and organizations that provide training for potential loan officers, and continued education for professionals. These courses usually make a loan officer more competitive.
Those interested in working as loan officers must be confident, driven, and have the ability to build good client relationships. In addition, loan officers should feel comfortable making public appearances for their organization.
Educated, well trained loan officers often land positions in larger firms and can move on to management while poorly trained officers are placed in less prestigious firms and rarely move up unless they improve their training and education. For those who do move up, it generally means overseeing a team of loan officers and their support staff.
In the next ten years the expected growth rate for loan counselors and officers should be similar to the average occupational growth rate in the country. Degree holding applicants with experience in sales, lending and banking will likely have the best employment opportunities. Rising populations and subsequent economic growth will help keep business good for loan officers. However technological advancements in the loan process will limit the growth by cutting back on the need for officers. In addition, the increased use of online applications and other do-it-yourself methods will also cut into demand for officers. Loan officers are busy when the market is good, and slow when it is bad, however job opportunities will also become available as current officers retire or change careers.
The development of credit scores has greatly simplified the loan application process, and in some instances may eliminate it. Credit scoring cuts application assessment time dramatically, allowing underwriters to handle greater amounts of applications in a shorter amount of time. These improvements along with the automation of the mortgage application have lead to the development of Internet loan services. An internet service can accept an application and instantly find the best loan program and interest rate available. This often eliminates the use of a broker by putting customers directly in contact with lenders. Though not yet widely used, internet loan services are projected to become much more popular in the next decade. This will put a pinch on loan officers.
Loans have always produced excellent income for banks, but the volatility of the market can make life stressful for loan officers. In an expanding economy, demand for real estate loans increase as interest rates decrease. Loan officers are flooded with business and firms tend to hire on new employees. Because most officers make their money through commissions, expanding markets mean expanding paychecks. However, when the economy slows down and interest rates raise, the real estate industry slows down and many loan officers are forced to look for different work. Commercial loan officers are subject to the same market volatility.
The 2002 average annual income for loan officers was $43,980. The middle of the pack salaries ranged from $32,360 to $62,160. The trailers earned $25,790 and the leaders made upwards of $88,450. There are extremely good loan officers who earn hundreds of thousands of dollars each year.
While loan officers are often paid on commission, some are paid a flat salary. Still other firms pay a flat salary with commission bonuses based on performance. Banks often compensate loan officers in part by providing them free or discounted bank services.
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