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Loan Officer

Overview  

Friend or foe?

Loan officers can be friend or foe - depending on whether they accept your loan application. Loan officers prepare, analyze, and verify loan applications, make decisions regarding the extension of credit, and help borrowers fill out loan applications. Loan officers are not the ogres many perceive them to be; they often help consumers with low income or a poor credit history to qualify for home mortgages, student loans, and the like.

Loan officers gather basic information about the loan request. They also keep abreast of new financial products and services so they can meet their customers' needs. And the officer acts as a supportive liaison to the borrower: customers do not always understand the terms of a loan or the jargon of the information - the loan officer can clarify these matters.

The three main areas

There are three main areas in which loan officers specialize: commercial, consumer, or mortgage loans. Commercial and business loans provide companies with capital, often to pay for expansion plans. For example, a business may take out a loan in order to open a new location, or to upgrade existing equipment. Consumer loans include college loans, automobile loans, and other personal loans. Mortgage loans are taken out to finance the purchase of property.

Got collateral?

Loan officers lower their firm's risk by receiving collateral-security pledged for the payment of a loan. For example, a person receiving a college loan may put up his house as collateral. Loans backed by collateral are also beneficial to the customer, because they generally carry a lower interest rate.

Out in the field

Loan officers do much of their work in offices, but mortgage loan officers can change offices frequently and must often visit the homes of clients pursuing a loan request. Travel is also common among commercial loan officers, especially those employed by large firms; commercial loan agreements are complex and can take time to process.

Most loan officers work standard eight-hour days, but others work longer, as they take on as many clients as they can handle at a time. They carry heavy caseloads and often cannot take on new clients until they have completed their current cases. Schedules can really get hectic when interest rates are low and there is a surge in loan applications.

Career Path  

Most loan officer positions require a bachelor's degree in finance, economics, or a related field. Some organizations, such as The American Institute of Banking, offer courses through correspondence and at some colleges and universities for both beginners and experienced loan officers.

There are also many courses and certification programs that loan officers can pursue, earning titles such as "Certified Lender in Business Banking." Completion of these courses and programs enhances one's employment and advancement opportunities.

Because loan officers spend much of their time writing reports and talking to applicants, success as a loan officer requires effective interpersonal and written communications skills. Capable loan officers advance to larger branches of a firm or to a position as manager. Beyond loan officer positions, advancement may include supervising other loan officers and clerical staff.

Compensation for loan officers varies in different companies. Some employers pay a set salary, while others use a commission based on the number of loans the officer originates. As incentive to bring in more loans, this commission usually comes in addition to a salary. Those loan officers who work on commission tend to make more money than those who are only paid a salary.

Uppers  

Good salaries;Job stability

Downers  

Long hours

Personality Match  

Analytical;Methodical;Good communicator;Detail-oriented;Self-motivated

Personality Miss  

Creative;Disorganized

Hours  

Averages about 45 per week

Salary  

General range for consumer loan officers: $28,900-$48,000;Range for residential mortgage loan officers: $30,600-$45,000;Range for commercial mortgage loan officers: $45,100-$73,100;Range for commercial lenders: $37,400-$85,000

Skills  

Bachelor's degree

Our Survey Says  

The job of a loan officer varies greatly, depending on the bank. Some officers contend that they feel "short-staffed and overworked." However, others say that although the banking industry is notorious for wearing employees down with excessive hours, the industry is "becoming more flexible" when it comes to scheduling around employees' needs.

Being a loan officer pays "very well at some banks, not as well at others," insiders say. Contacts describe working in an environment that includes "people from all walks of life" as one of the perks of the job. Loan officers feel that there is an "unwritten policy of permanent job security" but that the "stuffy and conservative" nature of the banking industry is "sometimes a source of frustration."

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