How to Become a Loan Processor in 5 Steps
Research what it takes to become a loan processor. Learn about the education and training requirements, as well as job outlook and salary to find out if this is the career for you.
What Does a Loan Processor Do?
Loan processors are financial managers who assemble and prepare the paperwork necessary to process loans. This includes looking over various background and credit checks, entering data, meeting with applicants and working with professionals in the field. Meeting with applicants is important to making sure all paperwork is filled out and signed correctly before it is sent to a loan officer for review. Depending on the types of loans they work with, loan processors may also be required to work with real estate and escrow agents. When this is the case they need to have an understanding of the real estate buying processes and all the paperwork involved with it. Take a look at the following chart for an overview of how to enter this field.
|Education Required||High school diploma or GED, associate's degree recommended|
|Education Field of Study||English and math courses, computer and office courses recommended|
|Training Required||Most employers offer on-the-job training|
|Key Responsibilities||Assist applicants in filling out loan forms, calculate loan costs, advise customers on loan options|
|Job Growth (2018-2028)||9% growth (for all loan interviewers and clerks)*|
|Median Salary (2019)||$41,009 (for all loan processors)**|
Sources: *U.S. Bureau of Labor Statistics, **PayScale
What Is a Loan Processor?
A loan processor, also known as a loan clerk, is a financial manager who assembles and prepares paperwork for loans. As a loan processor, your duties are to obtain personal and financial information from loan applicants to verify the accuracy of information and assist applicants with filling out loan forms. You also must calculate interest rates, monthly payments and closing costs. Finally, you also advise customers on loan options, order property appraisals, and maintain loan application and disbursement records.
Step 1: Earn a High School Diploma
The minimum educational requirement for loan processors at many companies is a high school diploma or GED. Courses in English and math will provide you with a solid base of knowledge to work in the field. Computer and vocational courses that teach you office skills are also helpful.
Step 2: Earn a Degree
Some employers prefer to hire candidates who have an associate's degree in a relevant subject, such as banking and finance. A banking degree teaches you fundamental concepts of money management and the role of banks in safeguarding liquid assets and providing financial services. Banking law, lending practices, credit management, fraud detection and automated processing systems are among the topics you will explore in classes.
Step 3: Obtain Employment
Your potential employers include banks, credit unions and mortgage lenders. According to the U.S. Bureau of Labor Statistics (BLS), approximately 226,300 people worked as loan interviewers and clerks as of 2018 (www.bls.gov). The BLS noted in 2018 that employment opportunities for loan processors will arise from a need for workers to verify loan application accuracy due to strict lending standards and regulations. Career opportunities may be somewhat offset by ongoing implementation of loan automation systems that make processing easier. You could expect to earn a median salary of $41,009 in 2019.
Step 4: Obtain On-The-Job Training
Knowledge of specialized computer software and effective interpersonal communication can be obtained through on-the-job training. Virtually all loan decisions involve computers, recordkeeping and information processing. The share of your work that doesn't include computers will likely involve interacting with customers, which will require you to present a courteous and professional demeanor.
Step 5: Advance Your Career
You could advance your career by moving laterally into other areas of financial services. For some positions, you might have to earn a bachelor's degree or master's degree. You could also accumulate enough years of experience to become a senior loan processor; however, this again could require earning a bachelor's degree. If you've already earned an associate's degree, you should be able to find a suitable bachelor's degree transfer program.
What Are Some Related Alternative Careers?
When it comes to managing monetary transactions many bill and account collectors share some of the same clerical duties as loan processors. Loan processors are also tasked with many of the tasks completed by bookkeeping, accounting and auditing clerks. Though dealing less with money, information clerks may complete some of the same tasks loan processors do, as they are tasked with keeping records, collecting data and sending information.