A loan broker is a person who assists potential buyers with loan applications and approvals. Loan brokers, in essence, connect potential borrowers with lenders who may be willing to lend to them. A loan broker may prepare the loan application and handle the borrower’s documentation requirements in addition to bringing the borrower and lender together.
In many places, there are no specific requirements for becoming a loan broker, and no license is required. Laws, on the other hand, differ depending on where a potential loan broker lives. As a result, it’s best to get in touch with a local licensing agency to find out what it takes to become a broker in that area.
There may be an application fee to pay in places that do require a loan broker to be licensed. To become a loan broker in Indiana, for example, one must first obtain a license. A potential loan broker must submit an application to the National Mortgage Licensing System (NMLS), pay a fee, and obtain a surety bond. He must also submit fingerprints and undergo a criminal background check. In this state, there are also additional requirements to meet.
It helps to have a background in finance when dealing with loans and other financial instruments. A person who wants to work as a loan broker, for example, could go to college and get a degree in finance. However, this isn’t required to work as a broker. It could be beneficial in gaining clients’ trust in the new loan broker’s knowledge and credibility.
A person can train to become a loan broker whether or not licensing is required. Loan broker training programs can help a person develop the knowledge and skills he needs to be successful in matching borrowers with lenders and assisting with loan closings, though this is not always necessary. A person can become a loan broker through a variety of training options, including brick-and-mortar schools and online programs.
A person may decide to pursue loan brokering certification. This is an additional option that is not required but may aid a person’s business success. A loan brokerage exam that leads to certification is available at many locations. A person must pass the exam with at least 75% of the answers correct in order to be certified.
After receiving training or licensure, a person must figure out how to make a living as a loan broker. Some individuals choose to work for other loan brokers or brokerage firms. Others may choose to start their own businesses, which necessitates a well-thought-out marketing strategy. In addition to establishing online presences, many people choose to advertise in newspapers and business directories.