Steps on How to Become a Loan Officer

In a world of consumerism and free open market, commercial banks are diving into offering easy EMIs, freebies and other attractive discounts to prospective customers. Loan Officers in such scenarios can play a pivotal role in recommending and approving loans for consumers as well as businesses. 

Following steps may be followed by candidates aspiring to become a Loan Officer.

• Make Your Mind: Before opting for Loan Officer as a career option, it is essential to do some groundwork. Extensive research is to be done to choose relevant subjects to study at 12th, UG and PG level. This should be coupled with the possibility of job prospects in various sectors along with pay scale availability. 
• Choose the Correct Subjects: Though a high school diploma or equivalent is sufficient to start a career as Loan Officer, most employers prefer candidates having UG or PG degree in business fields. Since the job of loan officer involves interacting with customers from varied domains, they are expected to have interpersonal and communication skills which can be acquired by courses on communications, public speaking, and psychology at school level. 
• Prepare for the Entrance Exam: As it is mandatory for all mortgage loan officers to complete a mortgage loan originator (MLO) license which involves completing 20 hours of required coursework, passing an exam. Along with that the MLO has a national component and a state component unique for each state which needs extensive preparation to crack such exams. 
• Having the knowledge and understanding of the syllabus can help the candidates to prepare well for the entrance examinations. Basic knowledge of Mathematics, English and current affairs is sufficient to crack such entrance examinations.
• Selecting a good college is a cumbersome process as there are many colleges that offer the same courses but selecting a good college requires more than just courses. A good college is one which has a good placement record, alumni network, good regular faculties as well as visiting faculties, infrastructure, library facility at campus, etc. 
• After qualifying particular management entrance exams candidates are called for Group Discussion and Personal Interview in premier B-schools. Group Discussion and Interview hold some weightage which is set by call and varies from college to college. Scoring well in GD and PI along with scores in Entrance exams paves way for entry in that particular college.

Types of Loan Officer

Scope of work of a loan officer covers a wide range of roles based on their areas of interest, some of which are listed below:

Commercial Loan Officers

These are officers involved in recommending and approving loans for businesses who require such loans to buy supplies and upgrade or expand operations. Loan application of businesses is so huge that such loan officers have to devise ways to put together a package of loans from multiple banks. Average starting salary of a commercial loan officer is INR 3.0 LPA and this can shoot upto INR 25 LPA depending upon experience and expertise.

Consumer Loan Officers

These are officers involved in recommending and approving loans to people who require loans for a variety of reasons like home building purpose, buying a car, student loan for pursuing higher education etc. In such situations loan officers are required to guide loan applicants about the loan application process and repayment of loans. Such tasks are completed by these consumer loan officers with the aid of automated underwriter softwares. Average starting salary of a consumer loan officer is INR 3.0 LPA and this can shoot upto INR 10.0 LPA depending upon experience and expertise.

Mortgage Loan Officers

These are officers who are licensed as a mortgage loan originator (MLO) offering recommendation and approval of loans for both residential and commercial properties. They are specialized in offering loans used to buy real estate (property and buildings) which is popularly called mortgage loans. They are also involved in the process of gathering clients' financial information (e.g. taxes, debts) to review their eligibility for granting mortgage loans. Average starting salary of a mortgage loan officer is INR 3.5 LPA and this can shoot upto INR 7.0 LPA depending upon experience and expertise.

How to Become a Loan Officer in India

With the boom in the real estate industry and growing complexity in disbursing and repayment of loan, companies are preferring candidates with MBA degrees. Many management institutes offer admission based on scores in entrance examinations conducted by local government bodies or admission tests conducted by the institute itself.

School Level 

The profession of Loan Officer demands a high school diploma or equivalent to join any commercial bank. But it is advisable to complete various certifications on banking or diploma courses. It is best to have commerce and mathematics as compulsory subjects during your 12th examination as the job of a loan officer involves analyzing numerical data and recommending loans based on such results. Preference is given to candidates having mathematics as a compulsory subject in 10+2 examination.

How to become a Loan Officer After 12th?

UG Level Preparation

Candidates willing to pursue BBA program must have attained 50% or above as aggregate marks in 10+2 examination. Some of the popular BBA entrance examinations are NPAT , IPMAT , UGAT , BHU UET. Admission into this course is based on marks secured in entrance examination followed by group discussion and personal interview. A Mortgage Loan Originator (MLO) license requires completion of at least 20 hours of coursework, followed by passing an examination and finally background and credit checks by competent authority.

PG Level Preparation

Top institutes like IIM Ahmedabad, Bangalore, FMS Delhi offer 2 year PGDiploma in Management (PGDM) or PG Program in Management (PGP) which is a two year full time course offering insights of business management in various domains. Admission in most of the institutes is based on CAT/ MAT entrance scores. Candidates need to prepare for such an exam a few months before the exam date.

Courses to become a Loan Officer in India

BCom Economics

BCom Economics is a 3 year full time UG program aimed at offering knowledge on operational, cost accounting and business aspects to aspiring candidates.

BCom Economics: Admission Process

Admission in BCom Economics in most of the Indian colleges is offered through either performance of candidates in entrance examination or based on merit.

Merit Based Selection Process:

• Willing candidates have to apply directly through the institute’s website or visit the institute in person, fill the application form and submit the application either online or manually by paying requisite application fee.
• It is advisable to maintain a good score in class 12 exam for getting selected for such courses as selection is done based on marks obtained in the last qualifying examination.
• Candidates are advised to visit the institute website frequently to view cutoff lists as declared by the respective institute
• Shortlisted candidates will be candidates for interview and document verification
• Successfully verified candidates would be offered admission

Entranced Based Selection Process:

• Willing candidates must apply to their preferred institute either online or in person.
• Register online for the entrance exam conducted by the institute to qualify to seek admission to the desired college.
• Candidates are advised to visit the institute website frequently to view cutoff lists as declared by the respective institute after completion of such entrance examination
• Shortlisted candidates will be candidates for interview and document verification
• Successfully verified candidates would be offered admission

BCom Economics: Eligibility Criteria

• All applicants must have completed 10+2 in any discipline from a recognized board or council.
• A minimum aggregate score of 50% (45% for SC and ST) is required while some premier institutes look for candidates with a minimum of 60% in 10+2
• Candidates must have Mathematics as a compulsory subject in class 12th.

BBA

BBA is a 3 year UG business management course that imparts managerial and entrepreneurial skills to students through BBA Subjects like General Management, Managerial Economics. 

BBA: Admission Process

• Take a national level entrance exam or state level entrance examination or you can apply for direct admission in some colleges
• Register in the institute’s official website for admission in the desired course.
• Create a profile and login to apply.
• Fill up the application form.
• Submit entrance examination score along with relevant personal and academic documents.
• Make payment of application fee and submit the application.
• Shortlisted candidates will be candidates for interview and document verification
• Successfully verified candidates would be offered admission.

BBA: Eligibility Criteria

• All applicants must have completed 10+2 in any discipline from a recognized board or council.
• A minimum aggregate score of 50% (45% for SC and ST) is required while some premier institutes look for candidates with a minimum of 60% in 10+2
• Candidates must have attained the age of 17 to 22 years for general category and 17 to 24 years for reserved categories.

PGDM

PGDM is a 2 year full time diploma program in management imparting practical knowledge on business management through rigorous case studies and seminars. It studies the intricacies of different aspects of management and business industry.

PGDM: Admission Process

• Take a national level entrance exam or state level management entrance examination or apply for the institute admission test.
• Register in the institute’s official website for admission in the desired course.
• Create a profile and login to apply.
• Fill up the application form.
• Submit entrance examination score along with relevant personal and academic documents.
• Make payment of application fee and submit the application.
• Shortlisted candidates will be candidates for interview and document verification
• Successfully verified candidates would be offered admission

PGDM: Eligibility Criteria

• All applicants must have graduation in any discipline from a recognized university
• A minimum aggregate score of 50% (45% for SC and ST) is required. Elite institutes like IIM look for candidates having 60% aggregate marks in graduation.
• There is no age limit for application for such a course.

How to become Loan Officer Abroad

Sales managers in countries outside India are mostly graduates in finance or economics or finance are BBA with a minimum of 2-5 years experience in loan management. Most companies in countries outside India prefer candidates having a mortgage loan originator (MLO) license for applying for the position of Mortgage Loan Officer. 

USA

• In the USA, both UG and PG programs are available in finance and accounting namely BA Economics, BSc Finance, BBA Accounting etc which are suitable for pursuing a career as Loan Officer.
• More than 448 colleges in USA offer BA in Economics or BSc Finance or 2 year MBA program
• Most US universities prefer TOEFL score as a standard for English proficiency test for International candidates
• Duration of a bachelors course is usually 4 viz. BA Economics years while masters courses are of 2 years duration.
• The course fee is between INR 20.0 lakhs to INR 2.0 crores.
• In USA, the profession of Loan Officer is ranked #8 among top career choices with various positions offered by commercial banks, insurance companies and other financial institutions with salaries ranging from $31,870 to $63,040 depending upon experience and expertise.

Top Colleges

UK

• In the UK, employers generally look for candidates having graduation in finance or business or economics and having 2-5 years of relevant experience. 
• Many candidates willing to pursue a career in loan disbursement go for Certified Lender Business Banker or Certified Trust and Financial Advisor certifications offered by Mortgage Bankers Association (MBA) to have an edge over others. 
• UK offers MSc in Economics or BA in Economics or Bachelor of Accounting (Accountancy & Finance) in around 300 different institutes.
• In UK, Loan Officers are one of the top most paying jobs and is projected to grow by 3% by 2029.Various job profiles available for such candidates are Commercial Loan Officer, Mortgage Loan Originator, Loan Consultant etc with median salary offered to a loan officer is $63,960 per year. 

Colleges in UK

Canada

• Some 200 institutes in Canada offer bachelor programs in Accounting, Economics and BBA courses which suit the minimum eligibility criteria for starting a career as Loan Officer.
• Canada is ranked #3 among the top countries offering higher education to international students with a total of 642,000 international students registered with various education programs in Canada in the year 2019. 
• Canadian commercial banks, insurance companies and other financial institutions prefer candidates having graduation in business or accounting or economics or similar discipline for pursuing a career as Loan Officer. 
• Firms prefer candidates having relevant licenses or certificates for candidates looking for a career in mortgage loan.
• Various job profiles available in Canada concerning this profession are Policy Analyst, Housing Program officers, Funding Officers with average salary of a loan officer being $66,616 per year and can vary from $60,000- $85,000 per year depending upon job profile and location.

Colleges in Canada

Australia

• Some 50 colleges in Canada offer BCom in economics or BA in Accounting and BBA program which are relevant courses for starting a career as Loan Officer.
• Australia is ranked #1 for having the highest number of international students pursuing higher studies in the year 2019. 
• A high school diploma or equivalent is just fine to start a career as a loan officer in Australia but a vocational qualification in credit or financial management such as a Certificate IV in Credit Management is what most employers prefer.
• Australian firms offer tremendous growth opportunities for loan officers who are hard working and have at least 3 years loans administration experience. 
• Loan Settlement Officer, Loan Administration Officer, Loan Support Officer etc are the various job profiles usually prevalent in Australia with an average salary offered to a loan Officer being AUS$60,000 per year.

Colleges in Australia

Benefits of Career as a Loan Officer

The world of real estate is fast booming and thus the demand for mortgage loan officers is on the rise for handling matters related to loan application to disbursal of loans. Similar is the situation in the FMCG sector where consumers are on the lookout of availing easy EMI options to satisfy their personal needs. 

Compared to the hard work and dedication, reading people’s mind and influencing them and ever changing demand of clients can be intimidating in the initial phase. Years of experience in this field can bring reputation and lucrative income with the salary. In addition, if you have the right passion for managing your job and supervising your juniors in the right direction, you can complete your MBA in Finance/ Accounting.

Job Satisfaction

It always brings peace of mind when a loan manager is applying to offer the right loan scheme and help them satisfy their respective monetary needs. In addition, it is really satisfying to assess the credit worthiness of a prospective client to offer a loan and afterwards finding the loan being repaid back on time.

Fun and Creative

Since a career as loan manager is dynamic and invites applicants having an inclination of negotiation skills, influencing prospective clients from different strata of the society. The job of a loan manager is not only influencing clients, but learning the credit worthiness of clients by interacting with them either physically or virtually. 

Meeting New and Different People

The primary job of a loan manager is to meet prospective clients from different strata of the society who have varied requirements. Exposures to such clients give more opportunity for exposure to different people, know their needs and create a form of art as per their choice. This helps in the long run to excel as a successful management professional to take the right decision for prosperity of the business. 

Skills Required to be a Loan Officer

• Good Communication Skills
• Decision making skills 
• Attention to Detail 
• Analytical Skills
• Initiative 

Loan Officer Salary in India

A Junior Loan Officer gets compensation of approximately INR 3,00,000- 3,50,000 per annum while a professional with 7-10 years of experience can draw a salary upto INR 15,00,000 per annum.

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Experience wise

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