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A loan officer is a banking professional who evaluates consumer financial information for the purpose of approving individuals and businesses for loans. They look at the credit history, work history, and income of applicants for mortgage, business, personal, and other types of loans and make a recommendation to approve or deny the loan (and set a loan amount) based on this information. Read on to learn more about becoming a loan officer.
Required Education
To become a loan officer, you typically need a bachelor’s degree in finance, business, mathematics, or a related field. Understanding of the basics of business and finance is necessary to perform the functions of this job: for example, reading credit reports and analyzing financial statements. In some cases, those who have banking experience may ascend into this role without earning a bachelor’s degree. In addition to formal education, loan officers undergo some on the job training on the software systems, policies, and procedures of the institution for which they work.
Licensing and Certification
While it’s not necessary to be licensed or certified to become a loan officer, earning these designations can make you more attractive to potential employers. The American Bankers Association offers training programs in a variety of areas; learn more on their website.In addition, mortgage loan officers must undergo specialized training as a Mortgage Loan Originator. This requires 20 hours of training, yearly continuing education, and passing an exam. Learn more online at the Mortgage Bankers Association website.
Roles and Responsibilities
The role of a loan officer is a combination of business, sales, and customer service. He or she may be responsible for following leads of those who might be interested in applying for a loan. Loan officers also explain different loan products to consumers and make recommendations based on their personal needs. Depending on the type of business, loan officers may specialize in individual consumer loans, commercial and business loans, mortgage loans, loan underwriting, or loan collections. Because of the variety of duties, loan officers should have both strong interpersonal and sales skills and keen analytic and decision-making skills.
Salary and Job Outlook
According to the U.S. Bureau of Labor Statistics, the median annual salary for loan officers is $59,820. However, there is an incredibly wide range within this position, with the lowest paid ten percent earning less than $32,000 and the highest paid ten percent earning more than $110,000. This discrepancy is due to the fact that some officers get paid a straight salary, while others earn commission based on how many loans they sell to consumers. This field is expected to see average growth of 8 percent over the next 10 years, resulting in about 22,900 new jobs.
Related Resource: Specialize an MBA in Finance
If you want to consider a career as a loan officer, you may want to obtain a job at a bank while you are completing your bachelor’s degree. If you excel in an entry-level role, it’s likely that you will be able to be promoted into a loan officer position.
