Simply put, loan officers advise and help people and companies through the lending process. There are many types of loans available for purchasing a car, home, opening a business, or for a college education. A lot of loan officers specialize in a certain field and have to know all of the nuances, details, and idiosyncrasies of the process. Loan officers are usually also salespeople and are responsible for securing a certain amount of new loan applicants. They may work on commission or receive both salary and commission.
The financial industry is going strong and according to the Bureau of Labor Services (BLS), loan officer positions are no exception. The average salary is $56,490 per year or $27.16 per hour. There is usually no degree required for this position, though that may vary by employer. Due to the relatively minimal education requirements, this can be a very lucrative career for those who do not pursue a degree program. As of 2010 there were 289,400 loan officers in the US and the expected growth rate is 14% by 2020.
Types of Loan Officers
The BLS lists three different types of loan officers: commercial loan officers, mortgage loan officers, and consumer loan officers. Commercial loan officers work with businesses and corporations to secure loans for a variety of reasons including capital investment, a new venture startup, purchasing expensive office equipment, or company vehicle purchases. Mortgage loan officers work solely with people looking to finance or refinance a home. Consumer loan officers work with individuals who need auto loans, home equity loans, and personal loans.
The Work Environment
Some people may think this is a 9-5 office job, but the reality is that many loan officers work nights and weekends. It is sometimes necessary for loan officers to travel long distances to manage complicated loans. Mortgage loan officers might have to meet clients in prospective or new homes in order to finalize paperwork. However, consumer loan officers often work from an office or bank in a more traditional work environment.
Educational requirements vary by employer, but according to BLS there is no degree requirement for this position. However, holding a degree in a related field can increase someone’s chances of securing a position, improve job stability, and lead to promotions. Related degrees include Accounting, Business, Economics, Finance, Mathematics, and even Computer Science, since the lending process heavily depends on technology (BLS).
Loan officers are salespeople so an outgoing demeanor, the ability to make a sale, and a welcoming personality are all very important. Some loan officers are provided with leads, but others may be required to cold call potential customers. Some people have natural sales and marketing skill-sets and they have seemingly endless earning opportunities in this field. This may not be the right financial career path for those who are uncomfortable in a sales-driven environment. Strong attention to detail, a knack for numbers, and the ability to translate complicated industry jargon into layman’s terms are also necessary traits.
Becoming a loan officer can be a very fulfilling, well-paying career especially considering that a college degree isn’t required in order to succeed. While some of these positions require irregular hours, it is overall a more stable career than other sales positions. It can also serve as a stepping stone to other careers in the finance industry, such as a financial analyst or planner. Individuals should consider their innate talents, career aspirations, and skill-sets to decide whether a career as a loan officer is the right choice.