How to Become a Loan Officer: A Career Guide

Loans can be pivotal for families wanting to buy their first homes, students trying to attend college, or small business owners hoping to expand their businesses. A loan officer acts as a mediator between those people and the financial institution that can provide them the means to achieve their goals.

What is a loan officer?

A loan officer is a finance professional who helps individuals, small businesses, and companies borrow money to accomplish goals like buying a house or getting new equipment to grow a business. A loan officer can counsel potential borrowers through the loan process, including all the terms of the loans.

Loan officers can help individuals and companies borrow money by administering the following types of loans:

• Mortgage loans

• Educational loans

• Small business loans

• Automobile loans

What does a loan officer do?

A loan officer’s general tasks and responsibilities include evaluating, authorizing, and recommending loan applications of potential borrowers. Loan officers can work in financial institutions such as banks, credit unions, or mortgage companies.

Specific tasks might include:

• Receiving and assessing loan applications

• Assessing borrowers’ creditworthiness by analyzing their financial history (a process called underwriting)

• Consulting and educating borrowers on loan terms

• Answering borrowers’ questions and providing customer service

How much do loan officers make?

According to the US Bureau of Labor Statistics (BLS), the median annual salary for a loan officer in the US is $63,380 [1]. Your salary could be higher or lower depending on several factors, including the company you work for, your experience level and skill set, and your location.

For example, Zippia's salary data for loan officers in the US shows that the states with the highest average salaries are New Mexico ($58,677), Maine ($57,334), and Rhode Island (54,195). States with the lowest average salaries include Idaho ($32,486), Utah ($33,138), and Mississippi ($37,680) [2].

Depending on the company’s salary structure, a loan officer may receive a commission or bonus on the loans they originate.

Loan officer job outlook

Employment for loan officers is projected to grow 4 percent between 2021 and 2031, according to the BLS.

How to become a loan officer

If you're ready to launch a career as a loan officer, follow the steps below to streamline your process.

1. Consider earning a degree.

There is no strict educational requirement for becoming a loan officer, although many employers will look for job candidates that have at least a bachelor’s degree. According to Zippia, 61 percent of loan officers hold a bachelor's degree, while 17 percent hold an associate degree [3]. A college degree in finance, economics, or a field related to banking can give you the background knowledge desirable in a loan officer.

2. Obtain additional loan officer qualifications.

Licensing requirements to become a loan officer can vary from state to state. Loan officers who wish to work with mortgages, however, must meet federal guidelines. This will require loan officers to get Mortgage Loan Originator (MLO) licenses from their state, and register with the National Mortgage Licensing Service (NMLS). Obtaining a license might require coursework, passing an exam, and passing a background and credit check.

3. Build loan officer skills.

According to data that ZipRecruiter collects from loan officer resumes and job descriptions, the most in-demand loan officer skills include [4]:

• Mortgage loans: for qualifying customers for loan eligibility, gathering necessary paperwork and information from customers, and educating them on the process, policies, and procedures

• Customer service: for verifying customer data, retaining customers, and fielding calls

• Communication: for determining borrowers' financial needs, answering questions, and guiding borrowers through the loan application process

• Documentation: for gathering and verifying documents related to a loan

• Microsoft Office: for storing, organizing, and presenting data

• Relationship management: for developing relationships with clients and using CRM software to track customer and loan data

Read more: What Is Relationship Management? And Why Do Businesses Use it?

Other skills that may help your loan officer career include:

• Analytical skills: for assessing a potential borrower’s financial statements and creditworthiness and understanding how financial markets work

• Time management and organizational skills: for handling the detailed paperwork necessary for each loan

• Knowledge of specialized banking and financial software applications: to help service a loan, as well as general computer skills to adapt to new digital services and platforms

Career development tip:

Zippia and ZipRecruiter can be useful sites for staying informed about skills and other qualifications that employers are looking for when hiring loan officers. These sites collect information from real resumes and job descriptions, making it easier to prioritize which skills to build as you plan your next career move.

4. Apply for loan officer jobs.

Once you're ready to begin your job search, take some time to update your resume, practice interviewing skills, and peruse the employment landscape. For example, as of January 2023, here is the number of loan officer job openings on three popular career sites:

• Glassdoor: 2,251 job postings

• LinkedIn: 3,922 job postings

• Indeed: 1,478 job postings

Employers in the following industries are currently hiring loan officers: finance, education, construction, government and public administration, healthcare, human resources, information technology, insurance, legal services, media and communications, and management and consulting.

Take the next step to become a loan officer

Taking the first steps to become a loan officer can set you up for work in an important and rewarding career. See if a career in financial services or the financial industry at large could be a good fit with a course like Personal & Family Financial Planning from the University of Florida.