Commercial Loan Officer Career Facts

Commercial loan officers work as approvals officers for providers of goods, finance or services on credit. They guide, explain and assist clients regarding their credit needs. They also approve or decline loans for their employers.

The Work Environment

A loans officer may work in a consumer, finance or other commercial environment. Loan officers often also work as sales staff, combining the roles. 

A loan approval involves a series of stages, some of which are required by law. Other parts of the loans approval process relate to the loan provider's internal policies regarding loans. 

The stages of loan approval are:

  1. Client inquiry regarding purchase or application for credit.
  2. Loans officer quantifies amount of loan required, advises clients of rates of payment. Also advises client regarding necessary steps for approval and any privacy and/or policy issues related to information obtained from the client by the credit provider.
  3. Client makes formal application for loan.
  4. Loans officer checks documentation, which includes identification.
  5. Loans officer checks client's credit rating, and any issues related to the credit provider's loans policies. 
  6. Loan is approved or declined.

At this stage the loans officer, acting as a sales person, may also advise what levels of credit may be obtained. The loans officer may also suggest alternative arrangements for purchase, or other options for the client.

The basic loans function is sometimes complex. Loans officers don't have any scope for discretion in terms of approvals. They're bound by provider policies and law, and must justify their decisions, which are subject to audit. Additional financial information may be required to make a decision, in many cases. 

Specialist Loan Officers

Loan underwriters: These are financial analysts whose function is to evaluate risk in loans. Their work is of a higher degree of difficulty than basic loans, assessing the viability of a loan and investigating related financial data for the credit provider.

Loans collection officers: Loans collections officers specialize in delinquent accounts. Their primary role is to ensure repayments and recovery of loans. This is similar to debt collection, but the loans officer is also required to maximize returns to the credit provider.

A loans collection officer may arrange a better repayment schedule to assist the borrower to achieve that result. This outcome is considerably better for both client and credit provider than the common image of seizure and sale of assets to recover money. Rescheduling a loan guarantees a return for the lender, whereas sale of assets may not recover even a significant percentage of the original loan. The rescheduled loan also prevents damage to the client's credit rating.

Salaries: The salary bandwidth is very wide, from $30,000 at entry level to over $100,000. Graduate salaries are considerably higher at entry level. May also make commission on loans.

Hours: Usually standard hours, unless otherwise required.

The Career Environment

The primary source of income is based on both the loan officer's industry and loan values. A lending officer dealing with high value loans may make much more on commissions alone than in a lending environment with lower value loans but a higher salary.

This is also a profession with a clear career path. Loans officers may progress up the corporate ladder to senior management levels, based on experience, qualifications, and specializations.