Loan brokers connect potential borrowers with lenders, prepare loan applications, and handle documentation requirements. Licensing requirements vary by location, and training programs and certification exams are available. Loan brokers can work for others or start their own businesses with a solid marketing plan.
A loan broker is a person who helps potential buyers apply for and obtain loans. Basically, credit brokers connect potential borrowers with lenders who might be willing to offer them loans. In addition to bringing the borrower and lender together, a loan broker can prepare the loan application and handle the documentation requirements for the borrower.
In many places, there are no strict regulations for becoming a loan broker and licensing may not be required. However, laws vary depending on where a potential loan broker lives. As such, it is best to contact a local licensing agency to determine the requirements for becoming a broker in that specific location.
In locations that require a loan broker to be licensed, there may be an application fee to pay. For example, in Indiana, a person must obtain a license to become a loan broker. An application is submitted through the National Mortgage Licensing System (NMLS), and the potential loan broker must pay a fee and obtain a bond. In addition, he must provide fingerprints and submit to a criminal background check. There are also other requirements to be fulfilled in this particular state.
When dealing with loans and other financial instruments, it’s a good idea to have finance experience. For example, a person who wants to become a loan broker might attend college and major in a finance-related field. However, this is not necessary to become a broker. It can be helpful for customers to trust the new loan broker’s knowledge and credibility.
Whether or not licensing is required, a person can receive training to become a loan broker. While this is not always necessary, loan broker training programs can help a person develop the kind of knowledge and skills needed to match borrowers with lenders and help close loans. There are many training options that help a person become a loan broker, including traditional schools and online programs.
An individual may decide to become certified in loan brokerage. This is another option that is not required but can help a person succeed in their business. Many venues offer a loan brokerage exam that leads to certification. To obtain certification, an individual needs to pass with at least 75% of the answers correct.
After training or licensing, a person needs to figure out how to start making a living in loan intermediation. Some people choose to work for other loan brokers or brokerage firms. Others may decide to start their own businesses, which requires a solid marketing plan. Many choose to advertise in newspapers and trade directories, in addition to establishing an Internet presence.
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