For many individuals, taking out a loan is the only way to buy a house, car, or college education. For businesses, loans likewise are essential to start many companies, purchase inventory, or invest in capital equipment. Loan officers facilitate this lending by finding potential clients and helping them to apply for loans. Loan officers also gather personal information about clients and businesses to ensure an informed decision regarding their creditworthiness and the probability of repayment. Loan officers may also provide guidance to prospective borrowers who have problems qualifying for traditional loans. For example, loan officers might determine the most appropriate type of loan for a particular customer and explain specific requirements and restrictions associated with the loan.
Loan officers guide clients through the process of applying for a loan. The process begins with a meeting or telephone call with a prospective client, during which the loan officer obtains basic information about the purpose of the loan and explains the different types of loans and credit terms available to the applicant. Loan officers answer questions about the process and sometimes assist clients in filling out the application.
After a client completes the application, the loan officer begins the process of analyzing and verifying the information on the application to determine the client's creditworthiness. Often, loan officers can quickly access the client's credit history by computer and obtain a credit "score," representing a software program's assessment of the client's creditworthiness. When a credit history is not available or when unusual financial circumstances are present, the loan officer may request additional financial information from the client or, in the case of commercial loans, copies of the company's financial statements. Loan officers include such information and their written comments in a loan file, which is used to analyze whether the prospective loan meets the lending institution's requirements. Loan officers then decide, in consultation with their managers, whether to grant the loan. If the loan is approved, a repayment schedule is arranged with the client.
Loan officers usually specialize in commercial, consumer, or mortgage loans. Commercial or business loans help companies pay for new equipment or expand operations; consumer loans include home equity, automobile, and personal loans; mortgage loans are made to purchase real estate or to refinance an existing mortgage. As banks and other financial institutions begin to offer new types of loans and a growing variety of financial services, loan officers will have to learn about these new product lines.
In many instances, loan officers act as salespeople. Commercial loan officers, for example, contact firms to determine their needs for loans. If a firm is seeking new funds, the loan officer will try to persuade the company to obtain the loan from his or her institution. Similarly, mortgage loan officers develop relationships with commercial and residential real estate agencies so that, when an individual or firm buys a property, the real estate agent might recommend contacting a specific loan officer for financing.
Some loan officers, called loan underwriters, specialize in evaluating a client's creditworthiness and may conduct a financial analysis or other risk assessment.
Other loan officers, referred to as loan collection officers, contact borrowers with delinquent loan accounts to help them find a method of repayment to avoid their defaulting on the loan. If a repayment plan cannot be developed, the loan collection officer initiates collateral liquidation, in which the lender seizes the collateral used to secure the loan—a home or car, for example—and sells it to repay the loan.
Work environment. Working as a loan officer usually involves considerable travel. For example, commercial and mortgage loan officers frequently work away from their offices and rely on laptop computers, cellular telephones, and pagers to keep in contact with their employers and clients. Mortgage loan officers often work out of their home or car, visiting offices or homes of clients to complete loan applications. Commercial loan officers sometimes travel to other cities to prepare complex loan agreements. Consumer loan officers, however, are likely to spend most of their time in an office.
Most loan officers work a standard 40-hour week, but many work longer, depending on the number of clients and the demand for loans. Mortgage loan officers can work especially long hours because they are free to take on as many customers as they choose. Loan officers are especially busy when interest rates are low, causing a surge in loan applications.
| 1. | Approve loans within specified limits, and refer loan applications outside those limits to management for approval. |
| 2. | Meet with applicants to obtain information for loan applications and to answer questions about the process. |
| 3. | Analyze applicants' financial status, credit, and property evaluations to determine feasibility of granting loans. |
| 4. | Explain to customers the different types of loans and credit options that are available, as well as the terms of those services. |
| 5. | Obtain and compile copies of loan applicants' credit histories, corporate financial statements, and other financial information. |
| 6. | Review and update credit and loan files. |
| 7. | Review loan agreements to ensure that they are complete and accurate according to policy. |
| 8. | Compute payment schedules. |
| 9. | Stay abreast of new types of loans and other financial services and products to better meet customers' needs. |
| 10. | Submit applications to credit analysts for verification and recommendation. |
| 11. | Handle customer complaints and take appropriate action to resolve them. |
| 12. | Work with clients to identify their financial goals and to find ways of reaching those goals. |
| 13. | Confer with underwriters to aid in resolving mortgage application problems. |
| 14. | Negotiate payment arrangements with customers who have delinquent loans. |
| 15. | Market bank products to individuals and firms, promoting bank services that may meet customers' needs. |
| 16. | Supervise loan personnel. |
| 17. | Set credit policies, credit lines, procedures and standards in conjunction with senior managers. |
| 18. | Provide special services such as investment banking for clients with more specialized needs. |
| 19. | Analyze potential loan markets and develop referral networks to locate prospects for loans. |
| 20. | Prepare reports to send to customers whose accounts are delinquent, and forward irreconcilable accounts for collector action. |
| 21. | Arrange for maintenance and liquidation of delinquent properties. |
| 22. | Interview, hire, and train new employees. |
| 23. | Petition courts to transfer titles and deeds of collateral to banks. |
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