- Buy a car
- Get your first home
- Grow your own business
- Pay off and consolidate other debt
No matter what the reason, when you need to borrow money, credit union staff works together to help you from start to finish.Let's say you're buying your first vehicle. You go to your credit union to apply for a loan. You might talk with a loan processor who helps you complete your application. That application is then sent to a loan officer who approves it and decides the terms. Then the loan is sent back to the processor who works with you to get the money sent to the auto dealer.
If the loan isn't approved, the loan processor tells you why the loan was denied.
Because they are constantly talking to members, loan processors need to have strong communication skills and be able to translate information between the members, loan officers, and any other team members.
Ami on the job
Ami P., a senior loan processor at A+ Federal Credit Union in Austin, Texas, says, "My favorite parts of my job are serving others, helping members with their loans, guiding them through their first purchase or refinances, and answering any of their loan questions."
Ami helps motivate and coach the other loan processors. "The challenging part of my job is keeping my team motivated. I try to set an example to my team by staying positive and by finding different options to find a solution to an issue when there's a problem or when we need to stay together," she added.
The loan officer makes the decision
When your loan application is complete, a loan officer reviews it and looks at your financial situation to determine whether or not to approve the loan.
A loan officer uses a lot of information to determine whether or not you are likely to pay the loan back: how long you've been a member, your history with other products and services you have with the credit union, and at your credit history.
The loan officer looks at payment history (in your credit report ) to see if you have made on time payments in the past. The officer will also look at:
- How much you currently owe (debt) to see if you can afford to take on more debt
- How long you have been borrowing money
- What types of credit you already have
- How often you've applied for more credit
All of that information paints a picture for the loan officer of how risky it would be to lend you money. Lending is about risk and making sure the credit union gets paid back.
The loan officer also looks at what you are planning to use the money for and whether or not there's collateral for the loan. Collateral is an asset, like a car, that can be taken and sold if you don't pay the loan back.
Collateral typically helps reduce the interest rate on a loan. A loan without collateral is called an unsecured loan and typically has a higher interest rate because it's considered riskier debt.
The loan officer makes decisions all day and uses all the information available to them to make sure those decisions are smart risks for the credit union...