Loan officer works as a middleman between customers and financial institutions. If you are good at your job, you can earn from $25,000 to $250,000 per month. Many loan officers make that much money through networking and efficient communication skills. Those who become a part of banking institutes may not earn that much, but those who join mortgage companies have more scope. With an optimal level of flexibility, this job offers more freedom. In this post, I will tell you what a loan officer does and how to become a loan officer in the USA. 

Who is a Loan Officer?

A loan officer looks into loan applications, reviews and evaluates them. If loan applications meets all the requirements and criteria, he approves it otherwise rejects it. The main responsibility is to facilitate customers who are interested in a loan and help them understand requirements and process of a loan. Besides, approving/disapproving loans in a timely manner.

A mortgage loan officer does the same task but for home loans. If a person wants to acquire a loan for his home, officers review this application and decide whether the application will be rejected or accepted. A general loan officer job doesn't have much requirement and it's an easy career path. However, one who wants to become a mortgage loan officer has to complete class room training and pass an exam for acquiring a license. 

Loan collection officers collect loan payments while a loan underwriters work for insurance companies. Other types of loan officer are consumer loan officer and commercial loan officer. Consumer officer works for the general public while a commercial loan officer can enjoy a high pay job as he needs to deal with commercial clients and big companies.

What does a loan officer do?

Here are some common responsibilities handled by an officer in the loan department.

• Reviewing a loan application to evaluate credit worthiness of an applicant.
• Processing loan application as per company's criteria.
• Setting a meeting with the applicant and conducting an interview to find out about his financial eligibility. 
• Deciding whether granting loan is feasible for a specific candidate or not
• Evaluating loan application as per specified ratios and metrics
• Communicating with client about their loan process, approval and rejection
• Setting up debt payment plants
• Drafting loan contracts and negotiate terms and conditions
• Staying yup to date with recent changes in the loan application, laws & regulations, types of loans and financial services
• Trying to customize a loan package as per client's need.
• Becoming familiar with company's loan product and addressing all questions and concerns related to them
• Collecting and verifying all the required documents
• Building a strong relationship with customers
• Offering best in class loan services to attain customr satisfaction
• Working as per lending laws and regulations
• Processing loan as per state guidelines

A typical Loan officer Job Requirements

You come across a job advertisement where a company is looking for a loan officer who can work as a liaison between company and clients. They normally search for a candidate who has strong communication skills and can approve/disapprove loan applications in a timely manner. They require proven work experience in the field. The best candidate must have a complete understanding of loan products, computer, banking applications, etc. Employers are ready to hire a candidate who possesses excellent interpersonal and communication skills. In most jobs ads, a bachelor's degree in economics, business, finance, and accounting is required. 

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Can I become a loan officer without a degree?

If you have completed your high school or have a diploma then instead of going for a bachelor's degree, you can start working in the field. People with experience in customer care and financial institutions can also become a loan officer. Many private lending enterprises hire diploma holders and offer them on-job training. Candidate must have sound understanding of business and financial terms. Besides, they should have accounting knowledge to evaluate financial statements and other documents provided by customers.

How to become a Loan Officer?

As a loan officer, you need to work closely with customers in a financial world. Therefore, you must have complete knowledge and understanding of financial terms, accounting, and financial statements. 

Education: Many people start this career after getting a bachelor's degree in finance, accounting, business, and economics. To become fully prepared for a loan officer career, you better take a degree in finance and accounting because it's how you get complete know-how of the financial world.

Experience: Some people don't get a degree but they focus solely on experience- which is another right career move. If you are a quick learner and ready to explore the world. You can take an entry into the practical world.

 You can join a community college and enroll yourself in an undergraduate certificate plan. 

However, the best option is to enroll yourself in a plan offered by the American Bankers Association American Institute of Banking. The reason for preferring this plan over any degree is because a person can become fully prepared for his work life after acquiring that certificate. Besides, this certificate is worthy in business world.

No matter what program you pick, it helps you evaluate financial statements properly and analyze a loan application. You study personal tax return, general accounting, banking, law, and ethics. This sort of knowledge helps you perform better on a loan officer job.

In case you have a plan to join the banking field, you must have more than three year experience. Question is how to get that experience? Well, you can work in the customer service and sales department. Banks always hire a loan officer with experience, so you have to work with private companies for some time before you land on such a job.

How Much Does a Loan Officer Make?

The salary of a low earner in this field is almost $32,000 while that of a high earner can earn over $132,000. In 2019, the average salary of a loan officer was $73500. You can make more money as a mortagage loan officer. Many mortgage companies will quickly hire a licensed officer as they will pay an officer only when he completes a successful mortgage loan. It’s a 100 percent commission based job. Thereby, the stress level of this job is more than other job. Only a talented officer can earn more than average salary from the field. With years of experience, you can enjoy a boost in your income. It’s more like a small business where you will deal with clients and process their loan application to earn your base income.

What are the Steps to Become a Mortgage Loan Officer?

Many people want to become a mortgage loan officer. The reason is that this particular job is featured with freedom and flexibility.  You feel like running a small business. An agent brings the client and you process his mortgage application. Working on this job is easy, but the difficult part is clearing an exam to acquire a License from NMLS. Here is a step-by-step guide to become a mortgage loan officer. Also check latest Mortgage loan rate 2021

• The first step is to register at NMLS Nationwide Multistate Licensing System & Registry official website. From this website, you can register for any State in the US and send your proper application. 
• You must be fully prepared to file an MU4 form. There are certain requirements of this form such as 
• Completing 20 hours or more of approved classroom or online education. It's the hardest part because you must have to complete this education to attain this license.
• Another requirement is a background and criminal record check. You can't have this license with criminal history.
• Next thing is your credit check. You must have a good credit rating to obtain this license. In case you have poor ratings, forget about this license. The rejection is based on the fact that how a loan officer can perform well, if he can't manage his own finances well.
• You can apply for a license in a specific state.
• Once all the requirements are met, you need to be ready for an in-personal knowledge based test. There are many MCQs that you need to select during a couple of hours. In case you fail in first-attempt, you can still re-take this exam.
• You will submit required fees of license $300 almost, alongside $350 fee for background check and criminal record verifications.
• Once all the requirements are fulfilled, you will get your license and start your career as a mortgage loan officer in the USA.

What is Working Environment of A Loan Officer?

When you are working in credit union or bank, working hours are 9 to 5. However, when you are working alongside lending solution, it won't be a typical job. You can set your own working hours. As a mortgage loan officer, you would have to work late night.

On this job, you have to deal with piles of paperwork-especially working in a bank. You need to review, analyze and evaluate lots of applications. So, attention to detail and analytical skills would be your strong mate in this specific position. 

Once you gain more work experience, it's easy to get promotion and land on a higher job position. A management position always suits a loan officer because it has high earning potential, you main job is to work with corporate clients and close sales. As your clients are from the corporate world, you often have a big cut from the sales. 

For becoming a successful loan officer, one must possess strong communication and interpersonal skills. You need to work with a variety of clients. Some clients are difficult and they need all the information before they sign up for any kind of loan. It's you who will make every loan product and process easy to understand for every client whether he belongs to the corporate or consumer world. 

Wrap up

Becoming a loan officer might require a lot of effort and investment from your side, but you can earn a big reward in the form of commission. The more experience you have in the field, the better you can earn on this specific job. Working with corporate clients should be your goal as one can make more money in the corporate world and the learning graph of this environment is high.