If you’ve ever borrowed money from a bank or financial institution, you’ve probably met a loan officer. What do loan officers do? Loan officers evaluate, authorize, or recommend approval of loan applications for people and businesses.
Loan Officer Duties
Loan officers typically do the following:
- Contact companies or people to ask if they need a loan
- Meet with loan applicants to gather personal information and answer questions
- Explain different types of loans and the terms of each type to applicants
- Obtain, verify, and analyze the applicant’s financial information, such as the credit rating and income level
- Review loan agreements to ensure that they comply with federal and state regulations
- Approve loan applications or refer them to management for a decision
Loan officers use a process called underwriting to assess whether applicants qualify for loans.
After collecting and verifying all the required financial documents, the loan officer evaluates the information they obtain to determine the applicant’s need for a loan and ability to pay back the loan.
Most firms use underwriting software, which produces a recommendation for the loan based on the applicant’s financial status.
After the underwriting software produces a recommendation, loan officers review the output of the software and consider any additional information to make a final decision.
Other Job Titles for Loan Officer
- Business Banking Officer
- Business Loan Officer
- Commercial Banker
- Commercial Loan Officer
- Consumer Loan Underwriter
- Corporate Banking Officer
- Loan Advisor
- Loan Officer
- Mortgage Loan Officer
- Mortgage Loan Originator
Customer Service and Sales are Part of the Job
The work of loan officers has sizable customer-service and sales components.
Loan officers often answer questions and guide customers through the application process.
In addition, many loan officers must market the products and services of their lending institution and actively solicit new business.
Types of Loan Officeers
Commercial Loan Officers
specialize in loans to businesses, which often use the loans to buy supplies and upgrade or expand operations.
Commercial loans frequently are larger and more complicated than other types of loans. Because companies have such complex financial situations and statements, commercial loans usually require human judgment in addition to the analysis by underwriting software.
Some commercial loans are so large that no single bank will provide the entire amount requested. In such cases, loan officers may have to work with multiple banks to put together a package of loans.
Consumer Loan Officers
specialize in loans to people. Consumers take out loans for many reasons, such as buying a car or paying college tuition.
For some simple consumer loans, the underwriting process is fully automated. However, the loan officer is still needed to guide applicants through the process and to handle cases with unusual circumstances.
Some institutions—usually small banks and credit unions—do not use underwriting software and instead rely on loan officers to complete the underwriting process manually.
Mortgage Loan Officers
They specialize in loans used to buy real estate (property and buildings), which are called mortgage loans.
Mortgage loan officers work on loans for both residential and commercial properties. Often, mortgage loan officers must seek out clients, which requires developing relationships with real estate companies and other sources that can refer prospective applicants.
Loan Officer Specializations
Loan Collection Officers
Loan collection officers contact borrowers who fail to make their loan payments on time.
They work with borrowers to help them find a way to keep paying off the loan.
If the borrower continues to miss payments, loan officers start the process of taking away what the borrower used to secure the loan (called “collateral”)—often a home or car—and selling it to repay the loan.
These workers specialize in evaluating whether a client is creditworthy. They collect, verify, and evaluate the client’s financial information provided on their loan applications and then use loan underwriting software to produce recommendations.
Loan officers held about 316,200 jobs in 2018. The largest employers of loan officers were as follows:
|Credit intermediation and related activities||81%|
|Management of companies and enterprises||5|
The depository credit intermediation industry includes commercial banks and savings institutions, and nondepository credit intermediation includes mortgage companies.
Loan officers who specialize in consumer loans usually work in offices. Mortgage and commercial loan officers often work outside the office and meet with clients at their homes or businesses.
Most loan officers work full time and some work extensive hours.
Most loan officers need a bachelor’s degree and receive on-the-job training. Mortgage loan officers must be licensed.
Loan officers typically need a bachelor’s degree, usually in a field such as business or finance. Because commercial loan officers analyze the finances of businesses applying for credit, they need to understand general business accounting, including how to read financial statements.
Some jobseekers may be able to enter the occupation without a bachelor’s degree if they have related work experience, such as experience in sales, customer service, or banking.
Once hired, loan officers usually receive some on-the-job training. This may be a combination of formal, company-sponsored training and informal training during the first few months on the job.
Licenses, Certifications, and Registrations
Mortgage Loan Officers
Mortgage loan officers must have a Mortgage Loan Originator (MLO) license.
To become licensed, they must complete at least 20 hours of coursework, pass an exam, and submit to background and credit checks.
Licenses must be renewed annually, and individual states may have additional requirements.
Several banking associations, including the American Bankers Association and the Mortgage Bankers Association, as well as a number of schools, offer courses, training programs, or certifications for loan officers. Although not required, certification shows dedication and expertise and thus may enhance a candidate’s employment opportunities.
What You Need to Become a Loan Officer
Decisionmaking skills — Loan officers must assess an applicant’s financial information and decide whether to award the applicant a loan.
Detail oriented — Each piece of information on an application can have a major effect on the profitability of a loan, so loan officers must pay attention to detail.
Initiative — Loan officers need to seek out new clients. They often act as salespeople, promoting their lending institution and contacting people and firms to determine their need for a loan.
Interpersonal skills — Because loan officers work with people, they must be able to guide customers through the application process and answer their questions.
Mortgage Loan Officer Sample Resume
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How Much Do Loan Officers Make?
The median annual wage for loan officers was $63,040 in May 2018.
The median wage is the wage at which half the workers in an occupation earned more than that amount and half earned less. The lowest 10 percent earned less than $31,870, and the highest 10 percent earned more than $132,080.
In May 2018, the median annual wages for loan officers in the top industries in which they worked were as follows:
|Management of companies and enterprises||67,230|
|Credit intermediation and related activities||61,790|
Loan Officer Commissions
The form of compensation varies widely by employer. Some loan officers are paid a flat salary; others are paid on commission.
Those on commission usually are paid a base salary plus a commission for the loans they originate.
Loan officers also may receive extra commission or bonuses based on the number of loans they originate or how well the loans perform.
Loan Officer Personality Type
A loan officer is a good job fit if you are an ISFJ personality. ISFJs like to work with information. If they can organize it, that’s even better. Being a file clerk has a blend of organization and service that appeals to this personality type.
The letters in the ISFJ stand for introvert, sensing, feeling and judging. Being an introvert means they process information internally and tend to be shy or reserved. ISFJs are also sensing, as opposed to intuitive, like the INFJ personality type.
Sensors are more practical, working with the information that is right in front of them. This makes being a loan officer a good fit because they work with the established criteria at face-value.
Is It the Right Career Fit?
Don’t know your personality type or O*NET Profile? Take a free personality or career test.
The O*NET Interest Profiler puts occupations into a combination of 6 interests based on the type of work you would be doing.
These interests are what you most want from your work. They are:
Loan Officer O*NET Career Test Results
These jobs involve following set procedures and routines. They include working with data and details more than with ideas. Usually, there is a clear line of authority to follow.
Social occupations frequently involve working with, communicating with, and teaching people. These occupations often involve helping or providing service to others.
Work Values Fulfilled as a Loan Officer
As a loan officer, you provide service to others and work with co-workers in a friendly non-competitive environment.
These jobs offer supportive management that stands behind employees.
Being a loan officer, you often get to work on your own and make decisions.
For more information about certification and training for loan officers, visit
For more information about a career as a mortgage loan officer, visit
For more information about licensing for mortgage loan officers, visit
State bankers associations have specific information about job opportunities in their state. Also, individual banks can supply information about job openings and the activities, responsibilities, and preferred qualifications of their loan officers.
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