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How can I become a Loan Officer very Fast? Training, Licenses, Salary & Cost

  • March 22, 2023

A loan officer helps determine the appropriate loans for customers and inform them of the requirements and stipulations. They assist applicants who wish to borrow money and evaluate, approve, or reject loan applications.

They assist individuals and businesses to facilitate the lending process for cars, college tuition, homes, and businesses.

They determine whether or not individuals and corporations qualify for loans from banks and other financial institutions.

They are an essential cog in the everyday economy and are consequently in high demand. However, becoming one requires good financial judgment coming from education and on-the-job training.

Continue reading as this article contains the information about this and the requirements for becoming one.

Table of Contents

Is Loan Officer a Good Career Path?

When an individual or business needs a loan, they talk to a loan officer at a financial institution like a bank, credit union, or lending company – this is who helps them apply and gathers information that determines whether the loan can likely be repaid.

As you can presume, they are an essential cog in the everyday economy and are in high demand.

An individual interested in a finance career may choose to take up this career.

Furthermore, as a loan officer, you’ll be a liaison between the client and the bank.

You have to gather information to determine the likelihood that the individual or business will have the capacity to refund the loan. Thus, they typically specialize in commercial, consumer, or mortgage loans.

Commercial loans help companies buy new equipment or expand operations. Consumer loans include home equity, automobile, and personal loans.

Mortgage loans are those made to purchase or refinance real estate. However, as a loan officer, you will guide the client through applying for the loan.

This process begins with the client contacting the bank and ends with the loan’s approval. Specifically, Most of them work in commercial banks, savings institutions, and credit unions. With the right education, you’re qualified to be successful in this career.

What Is A Loan Officer?

A loan officer represents a bank, credit union, or other financial institution which assists borrowers in the application process.

They are often called mortgage loan officers since that is the most complex and costly type of loan consumers encounter.

However, most of them assist consumers and small business owners with various secured and unsecured loans.

Loan officers must have a comprehensive knowledge of lending products, banking industry rules, and regulations, and the required documentation for obtaining a loan.

What Is A Loan Officer’s Job Description

They direct contact for most borrowers applying for a loan from a financial institution. The entire process can be handled over the internet, but most consumers probably still prefer a well-informed human on the other side of what is, after all, a costly and complex transaction.

In fact, one reason why banks continue to have so many branch offices is that they need to bring loan officers to face to face with potential borrowers.

Core Duties

  • They assist consumers and business people choose a loan product and apply for it.
  • This person is the main contact with the financial institution through the loan closing.
  • Most loans require a pile of paperwork, and mortgages are the worst.
  • They are knowledgeable about the various types of loans offered by the financial institutions they represent and can advise borrowers on the best options for their needs.

They also can advise the potential borrower about what type of loan he or she might be eligible to get.

They are responsible for the initial screening process and is unlikely to proceed with an application from someone who does not meet the lender’s qualifications.

Loan Officer Salaries

Their average yearly salary in 2019 was $73,650 per year, according to the jobs website Indeed.

According to the Bureau of Labor Statistics, the lowest 10% of wage earners in this field earn a yearly salary of just under $32,820, but earners in the top 10% earn an average salary of over $132,290.

Wages vary based on the employer as well as job performance. Some are paid a flat salary or an hourly rate, but others earn commission on top of their regular compensation.

Commissions are based on the number of loans these professionals originate or how their loans are repaid.

Loan Officers Licensure

They assist customers in obtaining not just consumer loans but also mortgage loans. However, before the individual can work as a mortgage loan officer, he or she must have a Mortgage Loan Originator license.

To be eligible for the license, the candidate must complete at least 20 hours of related courses, pass an examination and meet all additional eligibility requirements.

States differ in licensing requirements, but most states require the license to be renewed annually.

An individual who wants to become one should check with the state in which he or she wishes to work as one.

Certification is not required to become an officer, but certification is a way to demonstrate knowledge and commitment to the field.

There are many schools, organizations, and banking associations that offer not just certifications but training programs as well.

Mortgage Bankers Association and American Bankers Association both offer certification for loan officers.

What are the Job Prospects?

The Bureau of Labor Statistics projects that the employment of loan officers will grow 8 percent between 2012 and 2020, about as fast as the average for all occupations.

The BLS expects that lending by banks and other financial institutions will increase as the economy improves, enhancing job prospects for loan officers.

Increasing usage of underwriting software, however, may mean that fewer loan officers will be needed to process applications and evaluate clients’ finances.

What are the long-term career prospects for loan officers?

With experience, they may be promoted to positions with greater responsibility for closing sales and working directly with bigger clients.

Promotions to these positions can lead to higher commissions from sales. They may also be promoted to management positions where they oversee the activities of a group of loan officers.

Mortgage loan officers may eventually become independent brokers who match clients with the best lender for their needs.

Successful mortgage brokers may hire loan officers to take care of some of their business, and these brokers act as managers as well.

Types of Loan Officers

Once an individual decides to become a loan officer, he or she can decide what type of loan officer is most appealing. There are different types of loan officers.

  • Commercial Loan Officers – They work with customers buying businesses.
  • Mortgage Loan Officers – They work with mortgage loans to help people buy homes.
  • Consumer Loan Officers – They work with loans like personal loans, auto loans, or student loans.
  • Loan Collection Officers – They contact borrowers who are in default on their loans and work out payment plans.
  • Loan Underwriters – They review a customer’s financial information to determine if he or she is at a good credit risk.

Where Can I Get a Loan Officer’s Certification?

#1. LendingTree Certification Program

LendingTree offers an ethics-based loan officer certification program for officers in the LendingTree network.

The program provides two levels of certification for loan officers: certified gold leaf and certified president’s club.

To become a certified gold leaf loan officer, trainees must complete skills testing within 60 days of training, pay a $199 annual certification fee, and complete a one-day, on-site training seminar.

Once trainees have passed the gold leaf certification and met select performance criteria, they can be upgraded to the president’s club for no extra charge.

#2, American Bankers Association Certification

The American Bankers Association Institute of Certified Bankers (ICB) offers a certification program called the certified lender business banker for loan officers.

To be eligible for the certification, you must have either five years’ experience in commercial lending, three years of experience and a bachelor’s degree, or two years of experience and have completed an ICB-approved training program.

There is a $295 fee for the application and exam and a $199 annual membership fee.

Mortgage Bankers Association Certification

The Mortgage Bankers Association offers various training and certification programs under CampusMBA, a training center for real estate lending professionals.

These courses include certifications to become a commercially certified mortgage servicer, residential certified mortgage servicer, certified residential underwriter, and accredited mortgage professional.

The programs consist of three levels: an achievement certificate, a professional certificate, and then a specialist designation. Each level consists of about 50 hours of coursework followed by an exam.

Loan Officer School

LoanOfficerSchool.com offers various online classes and training courses to help loan officers boost their professional credentials.

The program’s loan officer certification programs are offered in online webinars hosted by an instructor and DVD self-taught course.

Their training online self-study course consists of seven hours of video training and can be accessed at any time.

This program costs $149 to download. Meanwhile, the mortgage loan officer self-study course is available on DVD for $295.

How to Become a Loan Officer: 

Most employers require you to have a bachelor’s degree in finance, economics, business, or another related field, but the minimum requirement is simply a high school diploma or it’s equivalent.

Licensure is required for mortgage loan officers, and there are certification options, but they are voluntary.

The required experience varies, but two to five years of experience is often preferred.

You’ll also need good communication, interpersonal, and decision-making skills and knowledge of mortgage, loan, and financial institution policies and procedures.

Here are five steps that detail the traditional path to become a loan officer:

#Step 1: Aquire a Bachelor’s Degree

Although they need at least a high school diploma, advanced positions such as commercial loan officers will require a bachelor’s degree in business, economics, finance, or other related fields.

Pursuing a degree in one of these fields can prepare a commercial loan officer to analyze a business’s finances, read financial statements, and understand the principles of business accounting.

Importantly, Coursework for these programs typically includes accounting, mathematics, finance, economic statistics, and business statistics.

Since they must be able to clearly answer customers’ questions and guide them through the loan application process, excellent interpersonal and communication skills are needed to succeed in this position.

While in school, you can take advantage of communications, public speaking, and psychology courses.

#Step 2: Gain the Essential Work Experience

For many employers, previous experience is highly preferred. This is especially true for individuals who do not have a bachelor’s degree and are seeking employment out of high school.

Aspiring officers can establish themselves in the field by seeking employment in various settings, including customer service, banking, and sales.

#Step 3: Complete On-The-Job-Training

Participating in on-the-job training is a requirement, regardless of what degree someone in this career has.

The type of training received can vary depending on the work setting and may include a combination of informal training and company-sponsored training.

Some training with specific software may be included as well, particularly for those involved in mortgage underwriting.

#Step 4: Obtain a Mortgage Loan Officer License

All mortgage loan officers must be licensed as mortgage loan originators (MLO).

This process involves completing 20 hours of required coursework, passing an exam, and a credit and background check.

The MLO exam contains a national component and a unique state component for each state.

Completing continuing education credits is needed to maintain an MLO license, which must be renewed yearly.

This typically requires the completion of eight hours of continuing education courses each year. Other requirements may vary by state.

#Step 5: Become Certified

Although certification is not a requirement for this career path, obtaining certification may improve employment prospects.

The Mortgage Bankers Association (MBA) and the American Bankers Association (ABA) offer opportunities for becoming certified. A few certifications offered by the ABA include:

  • A Certified Financial Marketing Professional (CFMP)
  • Certified Lender Business Banker (CLBB)
  • The Certified Trust and Financial Advisor (CTFA)

The MBA offers a variety of certification options for mortgage bankers, including commercial, residential, executive, and master.

These credentials require a minimum amount of work experience, successful completion of an examination, and the completion of continuing education courses.

Certifications offered by the ABA are usually renewed every three years.

The renewal process will vary and may include completing continuing education credits, paying an annual fee, and adhering to the Institute of Certified Bankers’ Professional Code of Ethics. CMB designations offered by the MBA must be renewed every two years.

Earning five points of continuing education activities is required to maintain certification.

However, This can be accomplished by completing coursework offered by the MBA, participating on committees, or attending conferences and conventions.

Loan Officers FAQs

What is the requirements to become a loan officer?

Some employers will require you to have a bachelor’s degree in finance, economics, business, or another related field, but the minimum requirement is simply a high school diploma or equivalent. Licensure is required for mortgage loan officers, and there are certification options, but they are voluntary.

Can I get job as a loan officer with no experience?

A loan officer with no experience can work in an entry-level position in a financial services company, bank, or other lending institution. In this career, you typically receive on-the-job training if you lack previous experience in assessing the creditworthiness of loan and mortgage applicants.

How do I become a loan officer?

You must complete your courses through a National Mortgage Licensing System-approved provider. Take the state licensing exam to become a loan officer. The exam consists of a written test you must pass before obtaining your license. Get fingerprinted and receive a background check.

What is the salary scale for a loan officer?

Mortgage loan officers typically get paid 1% of the total loan amount. We explore the reasons why loan officer commission is bad for consumers. … In return for this service, the typical loan officer is paid 1% of the loan amount in commission. On a $500,000 loan, that’s a commission of $5,000.

What is the educational requirement to become a loan officer?

Some banks and mortgage companies require loan officers to hold a bachelor’s degree, so it can take about four years to qualify for these jobs. It can take several weeks or months to meet the prelicensing education requirements and pass the examination to become a licensed mortgage loan originator.

Conclusion

In conclusion, Loan officers are responsible for reviewing and recommending the approval of loans for individuals and businesses.

There are several types of loan officers: Commercial loan officers specialize in business loans, consumer loan officers deal exclusively with individual loans, and mortgage loan officers only deal with real estate-related lending.

However, while certification isn’t necessary to become one, it can be a good way to improve your job prospects.

Reference

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