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How to Become a Loan Manager

Career News September 24, 2013

Beginning a career as a loan manager generally begins with becoming a loan officer. Some banks are willing to hire a loan officer with a high school degree, then train them to a loan officer’s capacity. However, higher education is preferable and will open more doors.

Acquire a BA in banking, finance or economics. As a growing number of financial institutions are using underwriting software, it is desirable to be proficient with computers and financial software.

Specializing in Types and Meeting Licensing Requirements

Choose a specific type of lending to go into, such as consumer, mortgage or commercial loans. Maintain a portfolio as this will be crucial for continuing your goal of becoming a loan manager. Consumer loans are given to the individual for specifics such as automobile, personal or home equity loans. Mortgage lenders build their portfolios through building or real estate loans. Commercial loans create the strongest portfolio as they are used for businesses that wish to expand or buy new equipment and inventory.

Your state may require licensing or certification for your particular field of lending. The federal government requires licensing for mortgage loan officers. You must complete twenty hours of course work, pass an exam and submit a background check.

The field is highly competitive with most loan officer jobs paid completely in commissions. The demand is highly dependent on the economy. The job demands good customer service skills, and an ability to appraise solid investments. Risk management assessment is a crucial part of your overall portfolio.

Loan management requires portfolio objectives and risk tolerance limits, sound underwriting, comprehensive financial analysis, satisfactory appraisal techniques and documented loan practices, and sound internal controls.

A certain amount of risk is involved with all bank lending practices. A loan manager determines whether the risks involved with the banks’ lending activities are accurately identified and reported to the senior loan manager and the board of directors.

Banks that are engaged in international lending face risks that domestic lending systems do not. Out-of-country risks may be influenced by the nation’s economic strength, as well as social and political conditions. These may affect the abilities of the foreign borrower to make payments of debt.

Loan Manager Experience and Knowledge are Essential

A loan manager is an upper level banking position that requires a great deal of experience within the banking industry. After creating a successful portfolio, as a loan officer, the bank may require that you secure a bachelor’s or master’s degree in business, finance, or a related field to assure them that you have the knowledgeable background and experience for managing and supervising other employees.

Tasks may include preparing and filing tax returns or preparing financial statements for outside accounts, preparing business activity reports, creating an annual budget, or filing reports for regulatory agencies.

The job entails the supervision of employees performing financial reporting, accounting, billing, payroll, and collections duties. The loan manager must maintain current knowledge of the organizational policies and procedures as well as the federal and state policies and their directives. The manager will be expected to coordinate audits of the company’s accounts and its financial transactions to remain in compliance with federal requirements and statutes.

A loans manager position requires critical thinking and strong skills in risk assessment. As a loans officer, your success is dependent on your interpersonal skills as a salesperson and building a good network within your community.

Your pay rate may vary from $30,000 to $70,000 a year, depending on your commission. The diligence and hard work pays off, however, if you achieve your goal of a loans manager position. The national median pay is $117,000 a year.

As the United States struggles out of its economic slump, the future of business is looking bright. New businesses are being created, with older, more established businesses expanding their industry.

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