Becoming a Loan Officer

Loan officers most frequently work in financial institutions such as banks and lending institutions. Their primary task is to determine whether or not loan applicants are eligible for loans by evaluating their financial backgrounds. A loan officer might specialize in a certain type of loan—commercial, consumer, or mortgage, for example. Once a loan officer is satisfied that the applicant is a good risk, he submits for the loan for final approval.

Education, Training & Degrees for Loan Officers

Although some entry-level loan officer positions can be obtained with just a high school diploma or an associate's degree, the standard requirement is usually a bachelor's degree. This degree can be in finance or in business administration with a specialization in finance. Many loan officers and mortgage officers have master of business administration (MBA) degrees. This is considered an added advantage, as many larger businesses prefer employees with advanced qualifications, particularly large banking concerns and private lending institutions. Many employers also prefer to employ loan officers who possess a background in property law, as the position of mortgage loan officer involves mortgaging property.

There are a number of colleges, both ground campuses and online, that offer degrees which can initiate a career as a loan officer or mortgage officer. Online courses are also available for established loan officers who wish to continue their education by specializing in a particular field.

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Job Responsibilities and Desired Skills for Loan Officers

The loan officer works with his client, explaining different types of mortgages, for instance, seeking out the best loan for the applicant, calculating mortgage rates, discussing the various options offered by banks and lending institutions, assisting them in organizing their home loan requirements and documents, and generally guiding the prospective borrowers through the complicated loan process.

In addition to these client consultations, the duties of a loan officer typically involve interviewing applicants, reviewing their applications, and determining the value of mortgages or other assets the applicants wish to use to secure the loan. In some cases, a loan officer may also consult with an underwriter concerning the loan. Once a loan officer is satisfied with the details, the next step is to hand off the application to a credit analyst.

The occupation of loan officer can prove complicated and challenging. Beyond the intellectual skills, education and training in the discipline, the loan officer needs to be capable of developing good working relationships with a number of other people. Loan officers should be knowledgeable and confident. They should possess excellent communication skills and a good degree of patience, as they will often be required to explain complex principles to loan applicants who have little or no experience in the process. Knowledge of computers is virtually indispensable, due to the volume of documentation involved in the loan process.

Loan Officer Salary Range and Employment Outlook

The U.S. Department of Labor predicts that employment prospects for loan officers will grow more slowly than the average for all jobs at least through 2014. This slower than average growth is caused in part by an increasing level of automation that handles aspects of the lending processes traditionally performed by loan officers, and in part by the increasing use of the Internet to search, apply for and obtain loans. Individuals in possession of a bachelor's degree, and those with banking, lending, or sales experience are considered to have the best prospects for employment as loan officers.

Figures released by the U.S. Bureau of Labor Statistics indicate that the median annual salary for loan officers was $48,830 in 2004. Even in the face of decreased employment in this occupation, this median salary is expected to rise by as much as ten percent over the coming few years, as the tasks assumed by loan officers become more complex and require a higher level of education and training.