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How to become a loan officer (Education, job types, duties and salary)

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What is a loan officer?

A loan officer is a financial professional who helps individuals and/or businesses apply for a loan. Loan officers may specialize in mortgages, auto loans, business loans and more. A loan officer works for a single institution, like a bank or car dealership. They develop a deep understanding of the loan products that their employer offers, and they work to help customers identify and apply for funding that's a good match for their needs and credit.

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What does a loan officer do?

Wayne Bechtol, a Certified Finance Professional from Austin, Texas, is a board advisor at Fiona Financial. Bechtol explains that a loan officer's responsibilities start with determining if a borrower is appropriate for the lender. "Interviewing the applicant is crucial to get a fair idea of the applicant's desired activity," he explains. "It helps to ensure that the loan is utilized for the purpose for which it is granted."

Loan officers educate borrowers about different available products and help them to determine which option is best for their needs.

Loan officers educate borrowers about different available products and help them to determine which option is best for their needs. Officers also review and verify information like the applicant's income and credit score to ensure the applicant will qualify for the funding. They carefully review loan applications to make sure that there aren't any omissions or inconsistencies, and may request and collect documents to help support an application.

Many of a loan officer's responsibilities involve engaging with potential borrowers. Loan officers may answer many questions. They may provide recommendations to help maximize an applicant's chances of being approved. They may also provide borrowers with information on application deadlines and funding timelines.

Loan officers also need to ensure that loan agreements comply with federal and state regulations, and they evaluate lending risks. "A loan officer must know the market trends well," says Bechtol. When a loan officer has a strong understanding of lending risks and market trends, they can better help their employer to avoid high-risk funding agreements.

How to become a loan officer in five steps

Choose a program and earn your degree.

business student holds books in classroom with classmates

Most loan officers earn a bachelor's degree in a field like finance, accounting or business administration. "A commerce degree with a management specialization helps [a loan officer] understand financial statements better," says Bechtol. He also encourages anyone interested in becoming a loan officer to pursue an education program that provides information on risk management.

Some employers may be willing to consider applicants who don't necessarily have a finance degree, but who have relevant experience working in a bank or other financial institution.

Consider certifications and licenses.

business student looks over masters thesis

To work as a loan officer, you will need to earn a mortgage loan originator license. Specific license requirements vary depending on your state, so it's best to review your state's requirements before deciding on a degree program. States may specify types of courses that you will need to take. Be prepared to also pass a background check and a credit check.

To become a mortgage loan officer, you will also need to take and pass the Nationwide Multistate Licensing System (NMLS) Secure and Fair Enforcement Mortgage Loan Originator (SAFE MLO) exam. Candidates must complete at least 20 hours of pre-licensure education, and in some cases, passing the SAFE MLO test may satisfy your state's license requirements. The test takes 190 minutes to complete, and preparation courses and study guides are available.

Look into an internship.

business student works with internship supervisor

Completing an internship can give you firsthand experience to help prepare you for your career. Bechtol encourages anyone interested in becoming a loan officer to look for internship opportunities in banks, credit unions and other financial institutions.

An ideal internship will allow you to help handle loan applications from the very first step in the process. You might assist a loan officer or manager in processing loan applications, marketing to new clients and more. Such an internship can give you a better understanding of the financial markets and the process of filling out application forms.

Find a job as a loan officer.

loan officer shakes hands with couple securing loan

Loan officer jobs are frequently advertised through online job boards and by financial institutions, insurance agencies and automotive dealerships. The connections you made through your college and your internships may also help you to find job opportunities.

Pursue a master's degree.

banker speaks with clients in hallway

While most loan officer positions don't require a master's degree, earning a master's degree in finance or business administration (an MBA) can help you to build on your knowledge and further develop your skills. Pursuing this degree demonstrates your dedication to your career and may help to make your resume stand out when you apply for jobs.

Loan officer salary and job outlook

The U.S. Bureau of Labor Statistics (BLS) reports that as of 2022, loan offers earned a median annual wage of $65,740. Loan offers who work in automobile dealerships earn a median of $86,270. Compensation can vary depending on the employer, with some loan officers receiving a flat salary while others are paid on commission.

Loan Officers

National data

Median Salary: $65,740

Projected job growth: 2.9%

10th Percentile: $34,920

25th Percentile: $47,890

75th Percentile: $99,200

90th Percentile: $138,580

Projected job growth: 2.9%

State data

State Median Salary Bottom 10% Top 10%
Alabama $60,210 $36,450 $130,290
Alaska $61,220 $28,910 $138,260
Arizona $60,190 $28,140 $105,840
Arkansas $71,560 $37,280 $128,660
California $63,250 $31,200 $158,400
Colorado $73,980 $30,620 $131,000
Connecticut $65,450 $45,580 $133,500
Delaware $77,230 $38,790 $153,820
District of Columbia $93,430 $35,730 N/A
Florida $59,530 $32,610 $125,580
Georgia $67,770 $38,200 $158,520
Hawaii $66,370 $33,190 $157,420
Idaho $58,400 $34,910 $107,090
Illinois $75,990 $36,210 $151,350
Indiana $64,930 $36,070 $146,700
Iowa $78,100 $48,920 $130,110
Kansas $77,180 $38,390 $141,120
Kentucky $63,330 $40,290 $104,850
Louisiana $58,700 $30,070 $114,420
Maine $66,100 $47,040 $138,380
Maryland $68,960 $32,580 $185,080
Massachusetts $80,400 $45,420 $167,320
Michigan $79,000 $24,940 N/A
Minnesota $78,850 $37,870 $149,360
Mississippi $47,650 $29,710 $107,130
Missouri $71,130 $33,960 $152,130
Montana $60,890 $40,100 $126,130
Nebraska $77,230 $46,850 $132,030
Nevada $65,880 $30,410 $212,470
New Hampshire $69,400 $37,740 $198,030
New Jersey $80,790 $36,790 $152,090
New Mexico $60,540 $35,460 $106,230
New York $81,610 $46,180 $207,070
North Carolina $75,530 $37,080 $132,000
North Dakota $79,110 $46,290 $124,810
Ohio $62,300 $31,570 $127,230
Oklahoma $62,070 $37,570 $129,750
Oregon $76,270 $35,420 $162,410
Pennsylvania $74,910 $39,550 $129,700
Rhode Island N/A N/A N/A
South Carolina $60,550 $35,880 $128,050
South Dakota $70,640 $49,470 $107,050
Tennessee $63,250 $38,910 $132,830
Texas $66,290 $31,200 $128,920
Utah $49,980 $32,090 $119,910
Vermont $64,690 $38,010 $129,190
Virginia $77,910 $39,760 $168,280
Washington $63,950 $35,240 $136,430
West Virginia $50,810 $37,060 $112,060
Wisconsin $76,030 $42,320 $128,550
Wyoming $63,120 $37,670 $120,790

Source: U.S. Bureau of Labor Statistics (BLS) 2022 median salary; projected job growth through 2032. Actual salaries vary depending on location, level of education, years of experience, work environment, and other factors. Salaries may differ even more for those who are self-employed or work part time.

According to the BLS, loan officer employment should grow by approximately 2.9% through 2032, which is about as fast as the average job growth rate for all occupations. Employment for loan officers is projected to increase as businesses and individuals apply for credit to finance investments and spending. Additional loan officers will also be needed to replace workers who move into different occupations or retire. 

How to advance as a loan officer

Bechtol highlights the fact that since financial markets are continuously evolving, it's important for loan officers to also continue to update their knowledge. That includes keeping abreast of the latest technological advancements.

An advanced degree, like a master's degree in finance or business administration, can also give a loan officer a competitive advantage, helping them to advance within their field. Earning certifications can also demonstrate your expertise and prepare you for more specialized roles.

Education requirements

There is no specific degree required to become a loan officer, but a bachelor's degree in finance, business administration, or a related field will give you skills and knowledge to help you within your career. Many companies will require applicants have at least a bachelor's degree. Plan to start with an internship or entry-level position. Most companies offer extensive in-house training, which will further prepare you for your career.

Applicant requirements will vary depending on the employer. It can be helpful to start researching available loan officer positions and their requirements while you are still in school. By understanding the common requirements, you can take any necessary steps to get the experience you will need, such as by taking on additional internship hours or carefully choosing your courses.

Keep in mind that earning additional certifications may help you to stand out to potential employers. You may also decide to pursue a master's degree program in finance or business administration to further develop your skills and knowledge. Taking the initiative to pursue additional education and certifications can make you a more competitive candidate and may help you to qualify for a higher salary.

What classes are most beneficial?

Your specific degree program will partially determine the types of classes that you will take, but if you plan to become a loan officer, certain classes will be helpful:

Strong mathematics and communication skills are also important. 

Loan officer certifications and designations

It's possible to work as a loan officer without holding any certifications, but earning certifications can help you to qualify for more specialized or upper-level roles. You may want to explore these certifications.

General Mortgage Associate:
The National Association of Mortgage Brokers (NAMB) offers a General Mortgage Associate certification. To earn this entry-level certification, you will need to pass an exam that covers topics like mortgage ethics, products and rules.
Certified Residential Mortgage Specialist:
The NAMB also offers a Certified Residential Mortgage Specialist certification. To qualify, you must have at least two years of experience in the industry and must pass an exam.
Certified Veterans Lending Specialist:
The NAMB offers training to prepare you to specialize in VA loans, including supporting veterans and surviving spouses through the application process.
Certified Credit Specialist:
The NAMB offers a course and an exam to help you learn how to complete in-depth credit analyses and help applicants determine if they are eligible for certain loans.
Certified Commercial Loan Officer:
The Independent Community Bankers of America offers a certification program to help you develop the skills needed to manage a commercial credit portfolio. To keep the certification, you will need to complete 15 continuing professional education credits every two years.

Loan officer jobs and career paths

Some of the most common types of loan officer job titles include:

Commercial Loan Officer

Commercial loan officers help businesses secure business loans. Since business loans are more complex than personal loans, commercial loan officers work closely with businesses to help them complete the loan application.

Consumer Loan Officer

Consumer loan offers specialize in personal loans. They often work with banks or credit unions and guide borrowers through the whole process of applying for and securing a personal loan.

Automotive Loan Officer

Automotive loan officers finance auto loans. They are often employed by automotive dealerships and guide car buyers through the process of applying for and securing auto financing.

Mortgage Loan Officer

A mortgage loan officer specializes in helping property buyers through their purchase process. They may work with both residential and commercial properties and are often paid on commission. Mortgage loan officers may work in large banks or credit unions, and they typically also have close relationships with real estate companies.

Important traits and skills for loan officers

Certain skills and traits can help to maximize your success in your loan officer career.

Detail-oriented nature:
Details are paramount in the finance industry, and loan officers work with details every day. A detail-oriented nature is essential for a loan officer, since paying close attention to details can help to avoid mistakes and can help to maximize the chance of a borrower's application being approved.
Listening skills:
Loan officers spend a good portion of their time having conversations with borrowers. Officers need to be able to carefully listen during these conversations. They also need strong interpersonal skills to help build a relationship with borrowers and make borrowers feel welcomed and comfortable enough to ask questions.
Technical skills:
Much of a loan officer's work takes place on a computer, and they may use several finance programs selected by their employer. An officer needs strong technical skills to navigate multiple programs, and should also have the ability to do some basic technology troubleshooting when things go wrong.
Awareness of the unsaid:
"A loan officer must know how to read between the lines," says Bechtol. "It helps them to understand what the borrower requires." An attentive loan officer may realize that the type of loan a borrower initially wanted to apply for isn't the best fit. A good officer can suggest an alternative, more appropriate loan based on the information gained from the borrower.
Communication skills:
Loan officers need to be able to communicate well and clearly, both in writing and in person. They should be comfortable talking with new potential borrowers, and will also need to communicate over the phone, through email and potentially by direct mail.
Troubleshooting capabilities:
Loan officers may encounter many challenges during a single day. They need the ability to think critically and creatively to identify and then overcome problems. A loan officer often works independently, so their ability to troubleshoot problems and find solutions can be essential to their overall success.
Math skills:
Strong math skills are a must for loan officers. While many calculations will be automatically performed by the programs that a loan officer uses, the ability to do some math in their head can save time during conversations with borrowers and help a loan officer to potentially spot any entry errors on an application. Loan officers should have strong math skills when it comes to percentages and functions like adding, subtracting, multiplying and dividing.
Organizational talent:
During the course of a day, a loan officer will balance multiple priorities, have several conversations with different borrowers, will complete multiple applications and will need to monitor the progress of other applications that have been previously submitted. Such an environment requires strong organizational talents—including the ability to track and check up on past work and monitor multiple deadlines. A loan officer needs to be well-organized and focused to manage multiple priorities and ensure nothing gets overlooked.
Firm boundaries:
While loan officers will try their best to help applicants find funding opportunities that are a good fit for their needs and creditworthiness, loan officers also need to be able to protect their employers. "A loan officer's most important skill is knowing where to draw the line," explains Bechtol. "The ideal loan officer must learn how and when to say no and justify one's decision." If a loan is a bad decision for a borrower, or a borrower is too high-risk, a loan officer must be comfortable turning that borrower down.

What's the difference between a loan officer and a mortgage broker?

While there is some overlap between loan officers and mortgage brokers, there are some key differences between these two careers.

A loan officer:

  • Works for one lender
  • May approve your loan application
  • Works as an intermediary between you and the underwriter
  • May work with mortgages or auto loans

A mortgage broker:

  • Works independently and matches you to one of many lenders
  • Passes your information to the mortgage lender for underwriting
  • Won't have contact with you once they connect you with a lender
  • Works specifically with mortgages

Staying connected

Staying informed about new advancements in the loan and finance industries is key. These groups offer information about education, jobs and certifications for loan officers.

National Association of Mortgage Brokers (NAMB)—Founded in 1973, NAMB represents more than 993,000 licensed and registered mortgage loan originators, as well as mortgage brokers and mortgage lender businesses. NAMB offers many certifications, as well as resources like its magazine, which is published 11 times per year.

National Association of Minority Mortgage Bankers of America (NAMMBA)NAMMBA is a trade organization that supports women and minorities working in the real estate finance industry. The organization offers certification, professional development, events and more.

Mortgage Bankers Association (MBA)—The MBA is an advocate for the real estate finance industry. It offers a comprehensive collection of resources, including conferences, education opportunities, news and research, advocacy and policy updates, and technology resources.

National Association of Professional Mortgage Women (NAPMW)—The NAPMW supports women and men in the mortgage industry. The association offers an annual education conference, plus other events, like networking events.

Published: July 19, 2023

paige cerulli

Written and reported by:

Paige Cerulli

Contributing Writer

wayne bechtol

With professional insights from:

Wayne Bechtol

Certified Finance Professional & Board Advisor, Fiona