What does a loan officer do?

Becoming a successful loan officer requires a combination of high school and post-secondary education, on-the-job training, and ongoing career education. As financial institutions increasingly require loan officers to hold a bachelor’s degree, it can take about four years to qualify for the job.

While loan officers increasingly hold a Bachelor’s Degree in Finance, Economics, Business, or a related field, the minimum requirement to enter the occupation is a high school diploma or equivalent. Aspiring loan officers who pursue an undergraduate degree often concentrate on studying taxation, financial record auditing, accounting systems, and accounting software.

In many cases, loan officers receive considerable training on the job. It is not uncommon for banks, credit unions, and mortgage companies to operate their own training programs aimed at familiarizing new-hires with the financial products that they offer and the technologies that they use. Some financial institutions and mortgage brokers rely on a software program to manage potential leads, client information, and documents; and to underwrite loans and ensure compliance with applicable laws and regulations.

Organizations like the American Institute of Banking (AIB), overseen by the American Bankers Association (ABA), offer another educational option: diploma and certificate programs through local training providers. Consumer lending curricula commonly include courses in building customer relationships, client referrals, ethics, general accounting, the law and banking, and personal tax return analysis. Curricula for commercial lending programs focus on analyzing financial statements, evaluating and structuring corporate loans, credit and deposit products for small business, and growing small business relationships.

Licensure for consumer and commercial loan officers is not mandatory, but industry organizations such as the ABA and the Mortgage Bankers Association (MBA) offer voluntary credentials to individuals who meet specific educational and experience prerequisites and pass a certification exam.

Most U.S. states require mortgage loan officers to obtain a license as a mortgage loan originator (MLO). Required standards to become a licensed MLO vary by state; but in general, candidates must complete a minimum of 20 hours of education offered by state-approved providers. Typically, states follow the standards set by the Nationwide Multi-State Licensing System (NMLS). After fulfilling the educational criteria, prospective mortgage loan originators must pass the NMLS National Test and often both a criminal history background check and a credit check.

The answer to this question may be ‘Yes’ – if…

You are outgoing
In this line of work, you have to enjoy meeting all types of people and working directly with customers. Referrals can make or break your business, so a customer service focus, excellent communication skills, and a certain charisma and likeability are fundamental in the role.

You are a self-starter
The most successful loan officers are self-motivated. They are persistent without being annoying, and they have an entrepreneurial mentality.

You have a professional attitude
By nature of the job description, loan officers help people and manage customer relationships. They are intimately involved with enabling people to make some of the most important life purchases. Personal accountability, trustworthiness, and integrity are paramount to succeed in this career. If clients don’t trust you and respect your judgement, it will be impossible to establish a reputation of dependability and build a client base.

You are organized
Loan officers need to keep track of multiple loans in various states of progress. Organization and time management skills are key to handling this responsibility and efficiently responding to all kinds of correspondence with clients.

You like to learn
Most financial institutions offer a wide array of loan products. The parameters of these products can change and new products can be introduced. Loan officers must maintain industry knowledge and be prepared to learn relatively quickly and think critically, so that they are equipped to respond to customer queries about various loan options.

You can handle stress
Working with the public and in a service industry can be stressful. The capacity to remain calm in the face of challenges is one of the cornerstones of a potentially lucrative career as a loan officer. It will always serve a loan officer well.

So, you have determined that you have or can cultivate many or all of the above personality traits that typically describe a successful loan officer. Now, ask yourself if you are genuinely interested in the kind of work that makes up the job…

Are you interested in helping people and businesses achieve their financial goals?

Do you have business acumen?

Are you skilled at balancing the needs of clients with the needs of an organization?

Do you have strong prospecting skills and proven ability to achieve sales results?

Are you proficient with Microsoft Word, Excel, and Outlook?

Do you have a working knowledge of financial statement analysis and software programs?

Do you like preparing complex paperwork, such as loan agreements?

Are you detail-oriented and accurate when working with numbers?

Are you able to speak a second language that is common in the area of service?

Simply stated, the job of loan officer is best suited to individuals who are customer and personal service oriented, who have a penchant for economics and accounting, and who are motivated by a sales and marketing role.

According to U.S. News & World Report, a loan officer is ranked ‘above average’ in being able to have an alternative, flexible working schedule while maintaining a work-life balance. Loan officers are employed on a part-time, full-time, or contractual basis by many different types of organizations, including:

• Commercial banks (regional, national, and international)
• Credit unions
• Mortgage companies
• Private lending companies
• Government departments
• Other financial institutions
• Automobile dealerships

Based on our pool of users, loan officers tend to be predominately enterprising people. This finding is precisely in line with the primary work involved in the profession. The very word enterprising describes those who are ready to undertake projects of importance or difficulty; energetic in carrying out any undertaking. Individuals or corporations seeking to qualify for loans from banks and other financial institutions invariably rely on their loan officers to be innovative and energetic in identifying the lending product that is best suited to their client.

Loan officers rank among the least happy careers. Overall they rank in the 5th percentile of careers for satisfaction scores. Please note that this number is derived from the data we have collected from our Sokanu members only.

While we have no data to explain this exceedingly low happiness quotient in the profession, one could surmise that the severe economic downturn of 2008, which exerted a significant negative impact on the industry, continues to have lingering effects.