Loan Officers

On the Job

Overview

Loan officers evaluate applicants' financial backgrounds. They decide whether applicants will receive loans.


Nearly every business relies on loaned money to operate. Loans are especially important when businesses plan to expand. They may need to borrow money to buy more goods or to build new buildings. The loans may be for a few thousand dollars, or even millions of dollars. Without loans, many businesses would not be able to grow and create new jobs. The money usually comes from banks, but may come from other financial institutions as well. The people at the center of these transactions are loan officers, and they stay very busy processing applications.Loan officers interview applicants and review their applications with them. When they find information is missing, they ask applicants about it. Loan officers also review applications after the interview to make sure they are complete. In addition, they analyze the applicants' financial status. They determine the value of property that is offered to secure the loan. They also check the value of the item, such as a car or house, that the loan is for. Next, they send applications to credit analysts and read the reports they receive. They may contact applicants and ask them additional questions based on concerns raised by the credit analysts. Officers may re-calculate the loan payment schedule based on new information from applicants. They may also talk to underwriters about some loans.

Once loan officers are satisfied they have enough information, they submit the loan to a loan committee for approval. Based on the committee's recommendation, loan officers approve or deny the loan request. They may also approve a smaller loan than the applicant asked for. Finally, loan officers fill out the final paperwork with applicants. They explain the completed loan papers, payment schedule, and terms to the borrowers.

Many loan officers examine the market for the possibility of new loan business. They make sales calls to potential borrowers. Some negotiate sales of groups of loans to investors. They often help advertise the services of their bank.

Some loan officers collect past due loans. First they try to set up a new payment plan with borrowers. If that does not work, loan officers prepare legal documents asking for the property the loan was for. They then arrange for the care and sale of the property.

Loan officers often specialize in certain types of loans, such as commercial, installment, agricultural, or real estate. They use computers to process data, track loans, and organize their work. They often supervise clerks in the preparation of loan documents.

Work Activities

The following list of occupational tasks is specific to this career.

• Interview loan applicants and request information needed for the application.
• Analyze the applicants' financial status. Determine the value of property offered to secure the loan.
• Ensure loan papers are complete and accurate.
• Submit loan applications to credit analysts. Read the analysts' reports.
• Contact applicants to resolve questions about loan applications.
• Confer with underwriters to resolve application problems.
• Compute the loan payment schedule.
• Refer the loan to a loan committee for approval.
• Approve or deny loans. Set credit policies, credit lines, and procedures for borrowers to access funds.
• Explain the completed loan papers, payment schedule, and terms to borrowers.
• Supervise the work of loan clerks.
• Analyze loan markets to develop new business.
• Come to an agreement on repayment with customers who are behind on their loans.
• Petition the court to transfer titles and deeds of property to the lender.
• Arrange for the care and sale of property that secures unpaid loans.
• Market bank products and promote bank services.

People in this career perform the following list of tasks, but the tasks are common to many occupations.

• Get information needed to do the job.
• Establish and maintain relationships.
• Make decisions and solve problems.
• Use computers.
• Process information.
• Organize, plan, and prioritize work.
• Work with the public.
• Update and use job-related knowledge.
• Communicate with people from outside the organization.
• Resolve conflicts and negotiate with others.
• Communicate with supervisors, peers, or subordinates.
• Convince others to buy goods or change their minds or actions.
• Perform administrative tasks.
• Evaluate information against standards.
• Analyze data or information.
• Provide advice and consultation to others.
• Explain the meaning of information to others.
• Schedule work and activities.
• Document and record information.
• Identify objects, actions, and events.

Working Conditions

In a typical work setting, people in this career:

Interpersonal Relationships

• Have a high level of social contact. They talk to customers, but also spend time alone reviewing applications.
• Communicate by telephone, e-mail, and in person on a daily basis. They also write letters and memos.
• Are moderately responsible for the work done by the loan clerks they supervise.
• May on occasion be placed in conflict situations where customer might be rude or angry.
• Often work as part of a team.

Physical Work Conditions

• Work indoors, except when visiting customers or inspecting properties.
• May work close to others, such as when sharing office space.

Work Performance

• Must be very exact in their work and be sure all details are done. Errors on loan applications or in analyses could cause the bank to make bad loans.
• Make decisions on a daily and weekly basis that greatly impact customers and their company's reputation.
• Make most decisions without consulting another first.
• Set nearly all their daily tasks and goals without consulting a supervisor first.
• Work in a competitive atmosphere where strict daily and weekly deadlines must be met.
• Repeat the same physical and mental activities.

Hours/Travel

• Usually work at least 40 hours per week.
• May work a lot of overtime during periods when home sales and refinancing are heavy. This applies mainly to mortgage loan officers.
• May travel around town to visit customers, inspect properties, and conduct loan negotiations.
• May travel to other cities or states to set up complex loan agreements. This applies mainly to commercial loan officers.
• Generally work a set schedule.

Physical Demands

In a typical work setting, people in this career:

People in this career frequently:

• Sit for long periods of time.

It is important for people in this career to be able to:

• Speak clearly so listeners can understand.
• Understand the speech of another person.
• See details of objects that are less than a few feet away.

It is not as important, but still necessary, for people in this career to be able to:

• Use fingers while operating computers and completing paper work.
• Focus on one source of sound and ignore others.

Source: Minnesota Department of Education.