Loan Officers

What Loan Officers Do

Loan officers evaluate, authorize, or recommend approval of loan applications for people and businesses.

Work Environment

Most loan officers are employed by commercial banks, credit unions, mortgage companies, and related financial institutions. Most loan officers work full time and some work extensive hours. Except for consumer loan officers, traveling to visit clients is common.

How to Become a Loan Officer

Most loan officers need a bachelor’s degree and receive on-the-job training. Mortgage loan officers must be licensed.

Pay

The median annual wage for loan officers was $63,270 in May 2019.

Job Outlook

Employment of loan officers is projected to grow 3 percent from 2019 to 2029, about as fast as the average for all occupations. Although the demand for loan officers will increase as the overall economy grows, the decline of bank branches may moderate employment growth.

Loan officers evaluate, authorize, or recommend approval of loan applications for people and businesses.

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.

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.

The following are common types of loan officers:

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. Furthermore, 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 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.

Within these three fields, some loan officers specialize in a particular part of the loan process:

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.

Loan underwriters 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 316,900 jobs in 2019. The largest employers of loan officers were as follows:

Credit intermediation and related activities 83%
Management of companies and enterprises 5
Automobile dealers 4

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.

Work Schedules

Most loan officers work full time and some work extensive hours.

This table shows a list of occupations with job duties that are similar to those of loan officers.

Occupation Job Duties Entry-Level Education Median Annual Pay, May 2019

Financial Analysts

Financial analysts provide guidance to businesses and individuals making investment decisions.

Bachelor’s degree $81,590

Financial Examiners

Financial examiners ensure compliance with laws governing financial institutions and transactions.

Bachelor’s degree $81,090

Personal Financial Advisors

Personal financial advisors provide advice to help individuals manage their finances and plan for their financial future.

Bachelor’s degree $87,850

Tax Examiners and Collectors, and Revenue Agents

Tax examiners and collectors, and revenue agents determine how much is owed in taxes and collect tax from individuals and businesses on behalf of the government.

Bachelor’s degree $54,890

Insurance Sales Agents

Insurance sales agents contact potential customers and sell one or more types of insurance.

High school diploma or equivalent $50,940

Securities, Commodities, and Financial Services Sales Agents

Securities, commodities, and financial services sales agents connect buyers and sellers in financial markets.

Bachelor’s degree $62,270

Real Estate Brokers and Sales Agents

Real estate brokers and sales agents help clients buy, sell, and rent properties.

High school diploma or equivalent $50,730

Financial Managers

Financial managers create financial reports, direct investment activities, and develop plans for the long-term financial goals of their organization.

Bachelor’s degree $129,890

Tellers

Tellers

Tellers are responsible for accurately processing routine transactions at a bank.

High school diploma or equivalent $31,230

For more information about certification and training for loan officers, visit

American Bankers Association

For more information about a career as a mortgage loan officer, visit

Mortgage Bankers Association

For more information about licensing for mortgage loan officers, visit

Nationwide Mortgage Licensing System & Registry Resource Center

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.

O*NET

Loan Officers


Suggested citation:

Bureau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook, Loan Officers,
at https://www.bls.gov/ooh/business-and-financial/loan-officers.htm (visited ).