A loan broker is a person who helps potential buyers with applying for and securing loans. Basically, loan brokers connect potential borrowers with lenders who may be willing to offer them loans. Besides bringing the borrower and lender together, a loan broker may prepare the loan application and handle 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 in order to determine the requirements for becoming a broker in that particular locale.
In the places that do 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 surety bond. Additionally, he must provide fingerprints and submit to a criminal background check. There are also other requirements to meet in this particular state.
When dealing with loans and other financial instruments, it's a good idea to have a background in finance. For example, a person who wants to become a loan broker may attend college and get a degree in a finance-related field. However, this is not necessary for becoming a broker. It may just be helpful in getting clients to trust the new loan broker's expertise and credibility.
Whether or not licensing is required, a person may undergo training to become a loan broker. Though this is not always necessary, loan broker training programs can assist a person in developing the kind of knowledge and skills he needs to be successful in matching borrowers with lenders and helping to close loans. There are many training options that help a person to become a loan broker, including brick-and-mortar schools and online programs.
An individual may decide to become certified in loan brokering. This is another option that is not required, but that may help a person to be successful in his business. Many locations offer a loan brokerage exam that leads to certification. In order to get certified, an individual needs to pass with at least 75 percent of the answers correct.
After training or licensing, a person has to figure out how to start making a living at loan brokering. Some people choose to go to work for other loan brokers or brokerage companies. Others may decide to start their own businesses, which requires a sound marketing plan. Many choose to advertise in newspapers and business directories in addition to establishing Internet presences.