Loan officers work for lenders such as financial institutions or banks as well as other agencies specializing in loans. They work to help borrowers obtain money they may need for financial ventures such as mortgaging a home, starting a new business, or buying a car. Loan officers must also work to minimize the risk to their place of employment in terms of what loans may be given and to whom.
The primary function of a loan officer is to recommend loan applicants to receive loans. They do this by reviewing a potential borrower's credit history, loan history, age, and other factors that may determine the likelihood of that borrower paying the money back. Loan officers also have a say in what interest rate a borrower must pay on loan payments. The primary work environment is in an office in a bank or similar financial institution such as a credit union. The tools used for work are regular office supplies such as a pen and paper, a telephone, and a computer. Loan officerss usually work Monday through Friday from 8 a.m. to 4 p.m. Part of the job of being a loan officer is in using his or her judgment in talking to loan applicants. If something does not seem right with the applicant, the loan officer may reject the loan application. Loan officerss cannot simply give out loans to anyone who applies, as otherwise their business would lose money. Therefore, they must be above average in reading people.
Requirements for becoming a loan officer include a bachelor's degree in finance, economics, or a related field. Certain kinds of loan officers must also hold particular licenses. For example, a loan officer dealing with mortgages must have a mortgage loan originator (MLO) license. Experience in banking, lending, or sales is also required for many loan officer positions.
While the job of a loan officer is to assist applicants in receiving money for something they need, a loan officer's primary responsibility is in protecting the financial institution he or she works for. Loan officers must be proficient at recommending loans to the right borrowers.
Loan Officer Tasks
- Track and maintain credit and loan data.
- Work directly with clients to review agreements, explain programs, and negotiate loans and terms.
- Obtain and compile financial information to evaluate loan applications and their risk.
- Generate new clients and referrals through strong relationship building.