For most people, financial loans are necessary to make major purchases such as an automobile or house, construction or renovation of an existing home, or to finance a college education. Companies often take out loans to set up a new business, or gain capital to expand an established business. They turn to different financial institutions such as banks, credit unions, or mortgage companies. Loan officers and counselors act as liaisons for the financial institution and the client.
Loan officers may specialize in commercial, consumer, or business loans (including loans for property and buildings, which are called mortgage loans), or, depending on the size of the lender, handle all types of loans. The loan process usually starts with an initial interview between the loan officer and client. At this time, the type and size of the loan is determined. The loan officer then gathers personal information necessary to complete the application, such as the client's educational background, work history, assets, and credit history. The credit history is important because it often gauges the client's ability to repay the loan. Loan officers can obtain a computerized credit "score" from several reliable sources. If the loan officer is working with a commercial loan, they must also gather the company's financial statements.
Once the information is gathered and verified to be true, then the loan officer meets with the loan manager and/or loan underwriter to determine if the loan should be granted or denied. Upon approval, the loan officer notifies the client, and sets up a repayment schedule, or in cases of a mortgage loan, a closing time.
Loan counselors work with clients or businesses that may have problems qualifying for a loan. They find alternate types of loans to best fit the needs of the client, and explain any restrictions or special requirements. They may also help the client set up collateral in order to qualify for the loan. For example, in order to approve a new business loan, the lender may ask the client to offer a home or other asset as collateral in case they fail to repay the loan. Upon default of the loan, the asset may be sold in order to fulfill repayment.
Frequently, loan officers and loan counselors may have many responsibilities that overlap. This is especially true in cases of smaller lending institutions. Loan officers and counselors often act as salespeople. They may make cold calls, or act on sales leads in order to attract new business. Some loan officers, especially those who specialize in consumer loans, may have established relationships with their clients, often working to secure additional loans as the business grows.
Loan officers and counselors have to keep abreast of new developments in the industry. Depending on their training and experience, they may study potential loan markets to develop loan prospects. They also have to learn new computer software used to obtain credit history, be aware of any new tax laws regarding loans, and take sales training or certification classes as required by their employer.
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