CHOOSING A CAREER / OCT. 08, 2014
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How to Become a Loan Counselor in the US

Loan counselors help credit applicants understand what they are getting into. They explain the terms and conditions of each loan to help applicants make sound financial decisions. Counselors also work with individuals who are experiencing difficulty repaying their loans. If you have an academic background in finance and excellent communication and interpersonal skills, loan counseling could be the job for you.

What Do Loan Counselors Do?

Loan counselors work with a variety of clients, ranging from students applying for tuition loans to adults dealing with mortgages. While others work as in-house employees in lending institutions, others work in independent financial consulting firms.

Regardless of the workplace, their duties include:

  • Interviewing clients to gather personal and financial information
  • Analyzing the clients’ financial status and credit worthiness
  • Researching on various types of loans and interests charged by lenders
  • Determining the most suitable loan for the client
  • Acquiring application forms for clients
  • Helping clients fill out the application forms correctly
  • Acting as an intermediary between loan applicants and lending institutions
  • Keeping client records for future reference
  • Writing loan reports to present to loan committees
  • Training newly qualified loan counsellors

Work Environment

Loan counselors work for about 40 hours a week, Monday to Friday. Although they mainly work from their offices, they often travel to meet clients in their homes or places of work.

Self-employed counselors with several clients may work overtime.

Salary

The following table shows average annual salaries for all loan officers in the US:

Job

Annual mean wage

Beginning counselors

$32,600

Experienced counselors

$59,820

Managers

$119,710

Source: Bureau of Labor Statistics

Entry Requirements

To become a loan counselor, you should have a bachelor’s degree in any of the following fields:

  • Accounting
  • Economics
  • Finance

If you have in associate degree in any of these fields, don’t give up yet! Some employers often consider associate degree holders, as long as they possess vast finance or accounting experience.

If you wish to counsel mortgage buyers, you must obtain a Mortgage Loan Originator (MLO) license.     

Important Skills and Abilities

To become a competent loan counselor, you should have the following skills and abilities:

  • A good understanding of financial laws and regulations, as well as professional ethics
  • Vast knowledge of the banking industry
  • Good math and computer skills
  • Strong interpersonal and communication skills
  • The ability to make good judgments and decisions
  • Good record keeping skills
  • Good problem-solving skills to help people with difficulties repaying loans.

Career Development

Newly-hired loan counsellors typically undergo on-the-job training to enhance their knowledge of the employer’s loan products and services.

Your training should not end here though. You should work toward certification by the American Bankers Association and the Mortgage Bankers Association. This will enhance your credibility and increase your chances of finding work or attracting many clients.

You can also pursue a master’s degree in finance or economics to enhance your career progression prospects.

Job Opportunities

Loan counselors are employed in the following areas:

  • Mortgage firms
  • Commercial and investment banks
  • Credit unions
  • Colleges and universities
  • Financial consulting companies.

After gaining vast job experience, you could be promoted to loan manager. If you wish to venture into private practice, you can establish a financial consulting company.

Finally, the BLS estimates an 8 percent job growth for all loan officers between 2012 and 2022. As the U.S economy recovers, the need for personal and commercial loans will increase. Hence, lending institutions will need more loan counselors to give customers proper advice. So this is a promising profession.

 

Photo Credits: Getty Images

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