How to Become A Loan Officer
Since the financial crisis of 2007-2008, the banking industry has implemented various measures for loan recovery, making it one of the most profitable sectors in today’s economy. Banking institutions, both private and public, play a crucial role in the fiscal development of the economy. A career in the banking sector may offer growth potential and stability. The banking sector is vast, and comprises of many sub-sectors. Consumer credit is one of the leading areas that has shown a steady increase over the years. Whether it is buying a car, paying for college, or setting up a small business, more and more people are resorting to bank loans to fund their plans.
Loan officers are the leading professionals in the credit sector who approve loans for consumers and businesses. This occupation has experienced a boost due to the increased demand for bank loans. Individuals seeking a stable and secure occupation in the growing banking industry can consider loan officer careers as a suitable choice.
Become a Loan Officer
Becoming a loan officer in today’s tough market requires exceptional skill, a college degree, and formal training. The first step to becoming a loan officer is the completion of a bachelor’s degree. Most banking institutions would hire individuals who have at least a 4-year college degree. On the other hand, individuals can further earn a master’s degree and enhance their career prospects. If you want to know how to become a loan officer, take a look at the following steps:
- Complete your bachelor-level education
- Get on-the-job training
- Fulfill the licensing requirements in your state
- Acquire a certification
What do Loan Officers Do?
These professionals typically analyze loan applications, obtain and verify financial information, meet with clients, and approve loans. Many loan officers choose to work with specific loan approval programs.
Some of the most popular types of loan officers include:
- Consumer loan officers
- Commercial loan officers
- Loan underwriters
- Mortgage loan officers
Many colleges are offering bachelor degree programs that can help students gain skills to apply for loan officer jobs. Students are advised to pursue undergraduate programs in business administration, finance or economics. The coursework of a bachelor degree in business administration would provide students with in-depth knowledge of management, finance, and marketing. Students would learn about various business and operational strategies used by lending institutes today. On the other hand, a bachelor degree in finance would emphasize on various facets of the accounting and financial management principles. Students could also opt for online bachelor degree programs. This mode of learning is suitable for those who do not have the time or funds to manage campus-based studies.
A bachelor degree in finance or business will cover a wide range of courses. These courses will allow students to develop strong concepts and skills in business. Listed below are important courses covered in the program:
This course will examine the various principles of accounting. Students will learn how to make different financial statements and apply measurement theories.
This course will introduce students to the American legal jurisprudence. Students will gain in-depth knowledge
of the foundations of business law and the federal constitution. Topics such as property rights, tort law, contract law, and commercial codes are covered in this course.
This course is designed to provide students with management skills and a thorough understanding of financial principles. The course will highlight important topics such as capital budgeting, financial decisions, and international finance.
Principles of Macroeconomics
It is important to have an overview of the economy as a whole. This course will cover the basic principles of economic systems and highlight areas such as unemployment, inflation, banking system, and taxation.
Students enrolled in this course will learn about management process and strategy making. The course will examine the process in detail and cover important planning stages.
This course focuses on the relationship between stock prices and the economy. Students learn about technical analysis methods and factors that affect decision-making.
This course will provide students with an overview of the international aspects of investment planning. Topics covered in the course include exchange-rate issues, financial decisions, currency rates, and multinationals firms.
Duration and Degree Completion Requirements
Typically, a bachelor degree takes 4 years to complete. However, this program may also be completed in less time through accelerated degree track.
To enroll in a bachelor degree, students must have a high school diploma. Some schools may only accept students who have an exceptional academic record. Other requirements may include:
- Letters of recommendation
- Minimum GPA
- Admission test
Individuals who wish to work as mortgage loan officers will have to acquire a professional license. This license is only issued to candidates who pass the licensing test and complete at least 20 hours of coursework. It is important to remember that the licensing requirements may vary from state to state.
Certification may not be mandatory for loan officers but is highly recommended. The American Bankers Association and the Mortgage Bankers Association are the two leading associations that offer certification in this field. The requirements for certification may vary. Employers may offer better job opportunities to individuals who are certified.
Over 85% of loan officers work in the credit intermediation industry. Not all officers start their career as loan officers. Typically, these professionals are required to undergo formal on-the-job training. Whether the training is sponsored or not will depend on the employer. The main purpose of the training program is to enable newly hired officers to gain hands-on experience. Individuals will learn how to use various company software programs and gain insight into company’s procedures and loan approval standards.
How Long Does it Take to Become a Loan Officer?
It can take around 4-5 years to become a loan officer. After completion of a 4-year college degree, students must undergo formal training. The duration of training programs will vary.
Loan officers earned a median annual income of $59,820 in 2012 according to the U.S. Bureau of Labor Statistics (BLS). The entry-level salary of a loan officer will be lower as compared to more experienced loan officers. Many banking and mortgage institutions hire the services of loan officers.Source: www.excite.com