4 Basic Duties of Loan Officers that You Need to Know!
People often go to banks, credit unions, and other financial institutions for loans. In this case, the borrowers often need assistance during the process of applying for loans. The people who are capable of helping the customers during this process are the loan officers.
What exactly are their duties, and what are the roles of the loan officers in banking and financing industries? Read this article to the end to explore more about the job of a loan officer!
What are Loan Officers?
Loan officers are people who are responsible for evaluating and authorizing loan applications. Not only that, their job also includes giving approval recommendations of loans. They represent banks, credit unions, mortgage companies, and other financial institutions to help the customers with their loan paperwork.
Sometimes, a loan officer is also known as a mortgage officer. This is because mortgages are a type of loan which many consumers are often dealing with.
Duties of a loan officer
They work directly with the customers. Their job is mainly dealing with evaluating the loan applications. The duties of a loan officer may differ from one include:
Providing technical information for the customers who apply for the loans
A loan officer is responsible for providing the necessary information for the applicants about the loan application process. A loan officer also needs to collect the information about the applicant.
Collecting the necessary documents needed for the loan applications
A loan officer must also gather all documentations needed for the loan application and to increase the probability and speed of the approval.
Analyzing the financial situation of the applicants
A loan officer must also examine the financial condition of the applicants to determine the creditworthiness of the applicants. They also offer loan programs that are suitable for each applicant.
Assisting the customers to get the best way to close their loans
Loan officers will help the applicants track their milestones and deadlines to make sure that they will be able to close their loans.
What a good loan officer needs to master
Because loan officers act as representatives of the financial institutions they are working for, their communications skills are essential to shape the image of their institutions. In addition, their communication skills also play an important role in closing the loans.
Understanding accounting and being able to comprehend financial data.
Because loan officers must examine the financial situation of their customers, being highly-skilled in accountancy is very much required.
Aptitude in using relevant softwares and websites
Because banks are all computerized these days, being loan officers also requires some levels of technological savvy, including the ability to operate software and websites that are relevant to their jobs.
Building interpersonal connections
Having excellent customer relation skills is also paramount for loan officers. Once the customers have liked and trusted a certain loan officer, the more likely they will work with him/her.
Loan officer’s role in sharia financing
In sharia financial institutions, a loan officer also has an important role in helping applicants obtain a loan. The difference is that the contracts that are in effect must not transgress the boundaries set up by the sharia i.e. not based on interests.
Typically, the loans that are offered are those based on the contract of murabahah or cost-plus financing. This type of transaction typically applies in income-generating projects, not consumer products.
Because the Quran prohibits taking profits from loans, the murabahah contract is not exactly a loan in the form of money. Rather, the financing is given by obtaining the products desired by the applicants, and then the applicants must reimburse it plus the margin that has been agreed in the contract.
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