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 assist prospective clients in applying for loans and in determining the type and amount of loan that is most suitable for their needs. Loan officers also assess the creditworthiness of loan applicants, judging their suitability as borrowers and the precise terms (interest rate, repayment schedule, etc.) on which credit may be granted to them. Depending on the position, a loan officer may be expected to actively seek out clients, rather than passively wait for applicants to approach his or her financial institution (bank, credit union, etc.) for credit.
Loan officers tend to specialize in one of three major types of lending: commercial, consumer or mortgage. Commercial lending is the extension of credit to businesses. Consumer lending includes personal loans, education loans, home equity loans and auto loans, among others. Mortgage lending includes loans for the purchase of real estate by individuals (businesses normally would be served by commercial loan officers, even for real estate purchases) or the refinancing of existing mortgages.
A loan officer education guides clients through the process of applying for student 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 officer education answers questions about the process and sometimes assists clients in filling out the application.
After a client completes the application, the loan officer education begins the process of analyzing and verifying the information on the application to determine the client’s creditworthiness. Often, loan officer education 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 officer education includes 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 officer education then decides, in consultation with their managers, whether to grant the loan. If the loan is approved, a repayment schedule is arranged with the client.