For many individuals, taking out a loan may be the only way to afford 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 facilitate this lending by finding potential clients and assisting them in applying for loans. Loan officers also gather personal information about clients and businesses to ensure that an informed decision is made regarding the creditworthiness of the borrower and the probability of repayment. Loan counselors provide guidance to prospective loan applicants who have problems qualifying for traditional loans. The guidance they provide may include determining the most appropriate type of loan for a particular customer, and explaining specific requirements and restrictions associated with the loan. Some of the functions of a loan counselor also may be performed by a loan officer. Within some institutions, such as credit unions, loan counselor is an alternate title for loan officer.
Loan officers usually specialize in commercial, consumer, or mortgage loans. Commercial or business loans help companies pay for new equipment or expand operations; consumer loans include home equity, automobile, and personal loans; mortgage loans are made to purchase real estate or to refinance an existing mortgage. As banks and other financial institutions begin to offer new types of loans and a growing variety of financial services, loan officers will have to keep abreast of these new product lines so that they can meet their customers’ needs.
In many instances, loan officers act as salespeople. Commercial loan officers, for example, contact firms to determine their needs for loans. If a firm is seeking new funds, the loan officer will try to persuade the company to obtain the loan from his or her institution. Similarly, mortgage loan officers develop relationships with commercial and residential real estate agencies so that, when an individual or firm buys a property, the real estate agent might recommend contacting a specific loan officer for financing.
