The loan officer is not a manager, nor does he or she have the responsibilities of a reviewer or workout officer. However, much of the industry is dependent upon this hard worker’s efforts. Loan officers do a great deal of the “selling” of loans, which includes helping clients to qualify, and assembling an application that will be approved. At the same time, neither a manager not an officer can waste the time of the company or the borrower. Understanding the limitations of loans, based on credit and assets, is important.
What Responsibilities Do Loan Officers Have?
Much of your time will be spent researching data from a number of sources, trying to determine whether your client—who obviously wants to be approved—is going to qualify. This is a commercial loan sector, meaning you are working with businesspersons, or entrepreneurs hoping to start a new chapter in life. The ambition is great, but not everyone is going to qualify. The manager can tell you this, but it’s your job to filter out the applications who are going to be excessive risk. Yes, this is a difficult part of the assignment, as you will want to give people a chance that the numbers simply cannot allow.
Business loans are especially complex and require more research than personal loans or even mortgage loans. You ensure that all applications are within specified limits and obtain all necessary information from the applicant through an interview process. You are not merely sizing up the applicant but are analyzing the case, seeing if there is anything you can do to push the approval through. Financial status, credit and collateral are all important factors and will decide feasibility—not your faith in the applicant.
The Work Environment
You might also have to explain additional options to your approved clients, whether they are denied the loan they initially wanted, or if they qualify for other types of loans they hadn’t considered. You as the authority must understand the different terms and make the client aware of them. A potential borrower can only give you so much information so obtaining files from other sources is part of your job. You will be running credit histories, requesting financial statements, and reviewing other non-public documents that require a special protocol.
Much of your time will be spent outside of the office, unlike the manager’s role, since you will be calling on potential businesses proactively looking for new cases. While not all jobs are commission based, some are, or include bonuses based on how many loans you can help approve. It’s common for you to make one half of the one percent figure for the total loan, which is a substantial payday.
If this career choice sounds appealing to you, then it’s time to start thinking about going back to school to educate yourself in an appropriate field, like finance, economy or business administration. Previous work experience in banking is also helpful. Lastly, prepare to become licensed as there is a new law requiring all loan officers to be licensed by the federal government, though this doesn’t invalidate individual state requirements, which may be above the federal standard.
This is rewarding career choice, and it’s not one that’s going to take half a lifetime to begin.