How To Become A Loan Officer

A loan officer helps people find a way to buy a new home, car and fund other high-end purchases. They could assist individuals with starting a new business and provide financial products to consumer and commercial clients to help improve their lives and businesses. If you like to work in finance, enjoy sales, and have a desire to help people in the process, you could find a rewarding career in being a loan officer.

Why Become A Loan Officer

Loan officers assess, verify, and evaluate loan applications. Their job is to provide loan services to consumers and businesses, which includes disseminating information regarding loan types and terms; acquiring personal and financial data; verifying applicant information; ensuring loan agreements meet legal requirements; and approving, referring, or denying applications.

Through the underwriting process, loan officers will collect and evaluate all financial and personal data that is pertinent to an application. From there, they will determine whether to approve an application or not based on the applicant’s ability to repay and other financial history.

Many types of loan officers exist:

The objective of a loan officer is to sell lending products to consumers and businesses. Loan officers want to provide loans to individuals and businesses on behalf of their employer, the lending institution. For this reason, they may have to help market and sell products to increase customer borrowing. They must be knowledgeable and helpful to customers during the application process. Loan officers must also exhibit the following traits and qualities:

Loan Officer Work Environment

Loan officers work in an office environment, at mortgage lending institutions, credit unions, banks, and other financial companies. Consumer loan officers will typically work in the institution itself, where the consumer will seek out their assistance. For mortgage or commercial loan officers, their work may take them to their clients, either at home or at their place of business. Loan officers will most likely work fulltime, during normal business hours.

Loan Officer Salary

In 2014, the median annual salary for a loan officer was $62,620, with all salaries ranging from $33,050 to $128,390. Since lending institutions vary in their business models and capabilities, pay for loan officers vary extensively. Some places of employment offer a single salary for their officers, while other institutions will pay based on commission. For more prominent companies, loan officers may earn commission in addition to a salary, with the occasional bonus.

Average Loan Officer Annual Salary


The average annual salary for loan officers is $77,920 a year. Salaries start at $32,670 a year and go up to $135,590 a year.

Average Loan Officer Hourly Wage


The average hourly wage for a loan officer is $37.46. Hourly wages are between $15.71 and $65.19 an hour.

Stats were based out of 307,240 employed loan officers in the United States.

Highest Paying States For Loan Officers

Top Paying Cities For Loan Officers

Data provided by the Bureau of Labor Statistics (BLS).

Loan Officer Career Outlook

Job growth for this occupation is supposed to increase 8 percent. This growth is about average when compared to all other occupations. A number of reasons exist to explain this slow and steady growth. After the recent economic recession, lending institutions ceased lending. Consumers and businesses chose not to borrow and decreased their spending. As the economy has continued to recover, more businesses and private consumers are looking to make capital and home improvements, make necessary repairs, and purchase goods.

Also, in the wake of the most recent economic crisis, many consumer financial protections were put into place by the United States government, and more loan officers are required to ensure lending is in line with all legal requirements. Unfortunately, this need will be tempered through the use of more technological advances, such as underwriting software.

Loan Officer Degree

All loan officers should have at least a bachelor’s degree in a related field. Mortgage loan officers can acquire a certificate to practice, but they must be licensed.

Step 1: Obtain educational credentials. Loan officers should obtain a bachelor’s degree in finance or business. Commercial loan officers should have an understanding of business accounting. Individuals should make sure to take courses that will train them to read financial statements and how to make prudent decisions for both customers and institutions. Essential courses should provide students with skills in economics, statistics, computers, banking, critical thinking, business writing, strategic management, and communication.

Loan officers who wish to provide mortgages to individuals and businesses can obtain a certificate rather than a bachelor’s degree. This certificate is offered through many educational institutions, including community colleges. Such a program prepares students to work with consumers directly in this field, providing consultations and education, assisting with the application, and finalizing documentation. Students will learn about current laws and practices, as well as consumer protections and rights.

Step 2: Obtain a license (for mortgage loan officers). To work as a mortgage loan officer, individuals must obtain a Mortgage Loan Originator (MLO) license. This license must be renewed every year and requires the following:

Step 3: Get certified (optional). Although not required, loan officers can obtain certification, which can help them to advance in their careers. The American Banker Association, the Mortgage Bankers Association, and other institutions offer certifications through courses, seminars, and other training opportunities.

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