A loan officer is someone who examines applications and determines if an applicant deserves a loan. They work with all types of loans, including mortgage loans, small business loans and even private student loans. Officers must use statistics and research to determine the risk that an individual or a business poses and whether a financial institution will get its money back. Those thinking of a career as an officer should look at what officers do every day, where they work and other factors.
What Do They Do?
Officers generally act as a representative of a bank or financial institution, but they also work closely with those applying for loans. They typically meet with applicants to talk about why they want a loan and to get information needed to process the application. After receiving that information, they pull the individual’s credit report and perform a thorough background check to ensure the information is valid. This also lets them determine if an individual or business is a potential risk or if the applicant will likely pay back the money later. Officers then pass along their recommendations to the financial institutions and notify applicants.
Requirements for the Job
The minimum requirement for working as a loan officer is a bachelor’s degree. Employers generally favor those who obtained a degree in economics or finance, but those who majored in business and minored in a financial subject are also good candidates. Most employers also look for applicants who have good customer service skills and strong sales skills. Depending on the field, applicants may also need a Mortgage Loan Originator License. The requirements for obtaining that license vary between states. An MLO license is mandatory for those working in the mortgage field. Applicants may also need a commercial license when working with business loans.
Where Do They Work?
Officers typically work for financial institutions, which can include banks and credit unions. Some work for specific mortgage companies. Those companies specialize in offering home and business loans and ask that applicants come directly to them. The companies may offer the money directly to clients or guarantee the loan through another institution. A loan officer generally works on a full time basis and works scheduled hours Monday through Friday. When not meeting with clients, they are responsible for going over loan documents, performing background checks on applicants and creating financial reports for their supervisors.
How Much Do Officers Make?
According to the Bureau of Labor Statistics, an officer makes a median wage of $59,820 a year, which equates to more than $28 an hour. Officers usually receive benefits from employers too, in the form of paid time off, health insurance and life insurance. The BLS also estimates that the rate of growth in this sector in the future will hit eight percent, which means that the loan field will add more than 22,000 new jobs. Those new jobs include positions working for independent loan and mortgage companies and jobs working for banks and credit unions.
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Mortgage officers and those specializing in other types of loans have an important role. They are the ones responsible for determining which companies and individuals are the lowest risks in regards to borrowing money. A loan officer does a thorough and extensive check on an applicant and determines if that applicant is worth the risk.
