Loan Officers examine if a potential borrower qualifies for a loan. They are most often hired by banks, but they may also work with other types of financial institutions. A good part of their jobs is evaluating the potential risks of granting loans to applicants. A Loan Officer must be able to analyze complex data, including financial records and statistical information, regarding the applicant’s capacity to make a full repayment of the credit in question. They are in charge of determining the interest rates of a credit and the expected time for payment.
This position, also called Mortgage Officer, is easily confused with the one of Mortgage Broker. The latter is an independent party who has the possibility of seeking loans from different institutions. In this regard, Loan Officers are appointed to a single financial organization, providing direct contact with the company, while Mortgage Officers stand as an intermediary between the borrower and the lender.
Due to their intermediary labour in acquiring a loan, many Loan Officers work in exchange for origination points, which is the commission resulted from the process borrowers face when they are conferred a loan or a mortgage.
Here’s a non-exhaustive list of common tasks Loan Officers are required to complete.
- Supporting new and current clients on loan and credit products:
- Setting up meetings with clients to obtain information on their loan needs;
- meeting and interviewing credit applicants in order to determine risk factors;
- determining the most suitable loan option; and
- providing guidance on the lending process.
- Assisting the Manager, before the loan’s approval or rejection, by ensuring the client meets the requirements to obtain a loan:
- Collecting information and processing each file to the closing stage;
- contacting other financial institutions to verify the financial background of loan applicants;
- examining applicants’ assets and finances;
- analyzing the applicants’ capability to repay loans by conducting a thorough assessment on creditworthiness; and
- submitting a detailed report regarding any abnormality on the processed file.
- Ensuring the repayment of approved loans and credits:
- Ensuring that all related paperwork follows regulations and standards;
- ordering appraisals to be conducted on applicants’ properties and reviewing the title insurances;
- calculating payment schedules; and
- monitoring clients in order to guarantee their timely payment.
- Maintaining detailed records on the transactions executed daily:
- Organizing all paperwork and updating database systems; and
- keeping a thorough daily record of every activity and incidence held at the institution.
- Processing, reviewing, and completing loan and credit requests:
- Verifying the documentation contained in each application; and
- submitting the application to the manager for the credit or loan’s approval or rejection.
- Contributing to ongoing professional business development activities:
- Cooperating with the company’s endeavor of achieving a gross revenue and net operating income objectives;
- working alongside colleagues to gather marketing information, statistics, and trends; and
- building and maintaining an important customer base.
- Drafting all administrative paperwork including reminders, warnings, and updates in order to inform customers on relevant financial matters on theirs accounts and their status.
- Ensuring compliance with all internal control and established policies related to loan products in order to guarantee transparency in every application processed.
- Contacting and setting up meetings with prospective and current loan clients.
- Interviewing loan applicants in order to determine and evaluate all risk factors.
- Communicating with other financial institutions to request details on clients’ creditworthiness.
- Promoting the institution’s services and assisting clients in determining the most suitable loan to meet their financial objectives and needs.
- Submitting the processed applications to the manager with the observations found in order to approve or reject the loan.
- Keeping loan files and clients’ information up-to-date by completing credit and loan documentation, preparing detailed reports, and maintaining comprehensive computerized records.
- Providing good quality of customer service according to company policies.
- Researching, gathering, and analyzing data to make effective and profitable decisions.
- Staying up-to-date on applicable current regulations.
The average Loan Officer salary is $41,072 per year or $21 per hour. This is around 1.3 times more than the Median wage of the country. Entry level positions start at $29,000 while most experienced workers make up to $58,000. These results are based on 6 salaries extracted from job descriptions.
- Interpersonal and communication skills:
- Communicating clearly, both in writing and verbally, in order to effectively advise and interact with clients;
- acting with transparency, keeping customers informed about the status of their request;
- displaying strong customer service skills, as well as great listening skills, in order to fully understand clients’ requirements and to offer the most suitable loan option;
- establishing and maintaining supportive work relationships; and
- being able to deal with team members and customers in potentially adversarial situations using a calm, tactful, discreet, and effective approach.
- Organizational and time management skills:
- Prioritizing and planning work activities in order to manage time efficiently while handling a high volume of work; and
- multitasking; being able to work in a dynamic, fast-paced environment.
- Analytical, problem-solving, and decision-making skills:
- Effectively analyzing numerical data, drawing logical inferences, and providing reasonable recommendations;
- identifying issues and resolving problems in a timely manner; and
- being able to exercise strategical thinking and mature judgment.
- Outstanding attention to detail and high levels of thoroughness:
- Ensuring compliance with internal standards;
- conducting thorough research and financial background checks; and
- staying focused during highly repetitive tasks.
- Administrative skills:
- Being proficient in Microsoft Office Word, spreadsheets, including the ability to develop and use formulas, and to manage Banking and Accounting platforms; and
- being able to creating graphics, flow charts, and projections in order to generate statistics.
- Goal-oriented, reliable, flexible, and confident:
- Being self-motivated, highly driven, and having an entrepreneurial personality; and
- being able to work independently.
- High levels of honesty, discretion, and integrity:
- Being trustworthy enough to handle sensitive/confidential information.
Loan Officers are responsible for advising clients on the most suitable loan or credit option, attending their financial goals and needs; hence, they are required to have a vast knowledge on financial and bank loan products. Having completed a bachelor’s degree in Accounting, Finance, Business Administration, or to have obtained any other equivalent certification is the most common requirement for this position.
Since they stand as the point of contact between the financial institution and the loan or credit applicant, customer service skills are a definite asset. In order to successfully perform their duties, Loan Officers are also required to be familiar with policies, procedures, security requirements, and institutional and governmental regulations.
Most Loan Officers require a minimum of 3 years of experience working in a client-facing, accounting, or relationship-focused role. Having a basic knowledge of the sector in which the applicant wants to work is always a must.