Loan Officers
Loan officers facilitate the lending process by finding potential clients and helping them apply for loans. Often acting as salespeople, loan officers contact businesses and individuals and persuade them to secure loans from the institutions they work for.Once a client has decided to apply for a loan from a specific company or firm, the loan officer will obtain basic information from the applicant and explain the different types of credit terms and loans that are available to them. Loan officers will also answer any questions that their clients have regarding the lending process and the forms they need to complete. After an applicant fills out the necessary paperwork, loan officers verify and analyze this information to determine the creditworthiness of their client. Loan officers generally use computer software to access the credit scores and histories of applicants.
Loan underwriters are loan officers that specialize in evaluating the creditworthiness of clients; they compile financial analyses and risk assessments that go into an applicant's loan file. After examining this file and consulting with their managers, loan officers then decide whether or not to grant the loan in question. After a loan is granted, loan officers are responsible for arranging a repayment plan with their client.
Missed payments are sometimes a problem, and loan collection officers help clients with delinquent accounts avoid defaulting on their loans. When a situation is irremediable and no alternative payment plan can be established, loan collection officers must initiate collateral liquidation. During this process, the collateral that a client has used to secure his or her loan, such as a house or a car, is seized and sold at auction to settle the debt.
Loan officers typically specialize in commercial, consumer, or mortgage loans because each type of loan requires different training and technical knowledge. Businesses apply for commercial loans to finance new equipment and expand their operations, whereas individuals apply for consumer loans to buy cars and settle personal debts. Mortgage loans are used to purchase real estate and refinance existing mortgages. Referrals are important in all sectors of the loan industry. For example, mortgage loan officers try to build strong relationships with local real estate agencies. This increases the loan officer's chances of being recommended to buyers who are purchasing real estate and looking to secure a loan.
Loan officer positions, specifically in the mortgage and commercial sectors, sometimes require travel. Most loan officers work 40 hours a week, but their schedules vary depending on how many clients they have and the demand for loans at the time. When interest rates are low and loan applications are more common, loan officers will generally work longer hours. Most loan officer positions require a bachelor's degree in finance, economics, or another related field. Loan officers should also be adept at using computers and have strong selling and communication abilities.
In 2006, 90 percent of the nation's loan officers worked in commercial banks, savings institutions, credit unions, and related financial organizations. That same year, the median annual income for loan officers in the U.S. was $51,760. The middle 50 percent of these professionals earned between $37,590 and $73,630 a year. Compensation in this profession varies from job to job, but most loan officers receive commissions, and their salaries are based in part on how many sales they make. [Figures including job projections, reported median incomes, and salary estimates were revised to reflect data from 2006 on 2/20/08.]