Loan officers and counselors

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About the work	Training qualifications	Job outlook	Earnings	Related links

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Loan officers facilitate commercial, consumer or mortgage lending by seeking potential clients and helping them apply for loans. Loan officers gather information about clients and businesses to ensure the quality of the loan and the probability of repayment.

Commercial or business loans help companies pay for new equipment or expand operations; consumer loans include home equity, automobile and personal loans; mortgage loans help purchase real estate or refinance an existing mortgage.

Loan officers guide clients through the process of applying for a loan. After a client completes the application, the loan officer analyzes and verifies the client's creditworthiness. Often, loan officers can quickly access the client's credit history by computer and obtain a credit "score." Loan officers who specialize in evaluating a client's creditworthiness — often called loan underwriters — may conduct a financial analysis or other risk assessment. Loan officers include this 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 counselors, also called 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 counselor initiates collateral liquidation, in which the collateral used to secure the loan — a home or car, for example — is seized by the lender and sold to repay the loan.

Working as a loan officer usually involves considerable travel. Most loan officers and counselors work a standard 40-hour week, but many work longer, depending on the number of clients and the demand for loans. Loan officers are especially busy when interest rates are low.

Training and qualifications

Loan officer positions generally require a bachelor's degree in finance, economics or a related field. Most employers prefer applicants who are familiar with computers and their applications in banking. For commercial or mortgage loan officer jobs, training or experience in sales is highly valued by potential employers. Loan officers without college degrees usually have reached their positions by advancing through the ranks of an organization and acquiring several years of work experience in various other occupations, such as teller or customer service representative.

The American Institute of Banking, which is affiliated with the American Bankers Association, offers correspondence courses and college and university classes for students interested in lending, as well as for experienced loan officers who want to keep their skills current. The Mortgage Bankers Association's School of Mortgage Banking also offers classes, both classroom and Internet-based, for people involved in real estate lending. Completion of these courses and programs enhances one's employment and advancement opportunities.

Persons planning a career as a loan officer or counselor should be capable of developing effective working relationships with others, confident in their abilities and highly motivated. For public relations purposes, loan officers must be willing to attend community events as representatives of their employer.

Job outlook

Automation of many financial services and the growing use of online mortgage brokers are expected to have a significant impact on the demand for lending professionals. But population growth and the increasing variety of loans and other financial services that loan officers promote will ensure modest employment increases for these professionals. Employment of loan officers is projected to increase more slowly than the average for all occupations through 2010. In contrast, loan counselors are expected to grow about as fast as the average for all occupations through 2010 as requirements for filing for bankruptcy tighten, forcing many to seek counseling to manage their debt. As in the past, college graduates and those with banking, lending, or sales experience should have the best job prospects.

Earnings

Loan officers and counselors held about 265,000 jobs in 2000. Nearly half were employed by commercial banks, savings institutions and credit unions. Most loan officers are paid a commission that is based on the number of loans they originate.

Median annual earnings of loan counselors were $32,160 in 2000. Median annual earnings of loan officers were $41,420 in 2000. The middle 50 percent earned between $30,610 and $57,250. Median annual earnings in the industries employing the largest numbers of loan officers in 2000 were:

Commercial banks $43,370
Savings institutions 42,760
Mortgage bankers and brokers 42,100
Personal credit institutions 35,040
Credit unions 29,700