How to Become a Loan Officer: A Career Guide

Loans can be pivotal for families wanting to buy their first homes, learners trying to attend university, and 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. Explore the role of a loan officer in more detail and find out how you can start a meaningful career in this field.

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 on 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

• Commercial loans

• Consumer loans

What does a loan officer do?

A loan officer’s general tasks and responsibilities include evaluating, authorising, and recommending loan applications for potential borrowers. Loan officers typically work at lending or financial institutions, such as banks.

Specific tasks might include:

• Receiving and assessing loan applications

• Assessing borrowers’ creditworthiness by analysing 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 Glassdoor UK’s September 2024 data, the average annual base salary for a loan officer in the UK is £29,872 per year [1]. Depending on the company’s salary structure, you may receive a commission or bonus on the loans you originate. Your salary could be higher or lower depending on several factors, including your company, experience level and skill set, and location.

For example, Payscale’s data for loan officers working in London the UK shows that those working in London have the highest average salaries, earning up to 60 per cent higher than the national average [2].

Beyond location, factors such as experience and specialisation can impact earnings. Mortgage loan officers, for example, typically earn more than consumer loan officers. Additionally, loan officers with more experience often have higher salaries than less experienced officers. 

Career advancement opportunities for loan officers

As a loan officer, you’ll find more advanced careers that you may pursue with your experience in this role. Take a look at some higher-paying, advanced roles you might consider: 

Mortgage adviser 

Financial adviser 

Senior loan officer 

Executive loan officer 

Principal loan officer 

How to become a loan officer

You will likely need a bachelor’s degree in a related field to become a loan officer. You will also need to build critical skills, work to gain professional experience, research whether you need licensure, and consider certification before starting your job search. If you’re ready to launch a career as a loan officer, consider following the steps below to streamline your process.

1. Consider earning a degree.

You won’t find a strict educational requirement for becoming a loan officer, although many employers will look for job candidates with at least a bachelor’s degree. An undergraduate degree in finance, economics, or a field related to banking can give you the background knowledge desirable in a loan officer.

2. Gain professional experience.

Choose a specialisation and start gaining professional experience. You may specialise in multiple types of loans or just one, choosing from commercial, consumer, or mortgage loans. Gain professional experience through on-the-job training, internships, or apprenticeships with the companies you want to work for. Many loan officers begin in entry-level positions such as loan officer assistant or loan processor and gain experience in this way as well. 

3. Build loan officer skills.

Whilst gaining professional experience, it’s also important to learn critical loan officer skills. Some in-demand loan officer skills include:

• Mortgage loans: Knowledge of mortgage loans is essential for qualifying customers for loan eligibility, gathering necessary paperwork and information from customers, and educating them on the process, policies, and procedures.

• Customer service: Strong customer service skills help verify customer data, retain customers, and field calls.

• Communication: Good communication skills are vital for determining borrowers’ financial needs, answering questions, and guiding borrowers through the loan application process.

• Documentation: The ability to verify documents related to a loan is essential.

• Microsoft Office: Knowledge and proficiency in Microsoft Office help store, organise, and present data.

•  Relationship management: This job requires managing and developing client relationships daily and using CRM software to track customer and loan data. 

Other skills that may help your loan officer career include the following:

• Analytical skills: Analytical skills will help you assess a potential borrower’s financial statements and creditworthiness and understand how financial markets work.

• Time management and organisational skills: Managing time well and staying organised will help you handle the detailed paperwork necessary for each loan.

• Knowledge of specialised banking and financial software applications: Technical acumen such as this helps with loan servicing and adapting to new and emerging digital service tools.

Career development tip:

Reed and Monster can help you stay informed about skills and other qualifications employers seek when hiring loan officers. These sites collect information from real CVs and job descriptions, making prioritising the skills you want to develop easier as you plan your next career move.

4. Gain FCA authorisation. 

Whilst you do not need a specific licence to work as a loan officer, you may need to meet specific regulatory and qualification requirements depending on the type of loans you handle.

For example, if you work as a mortgage adviser, you must be certified and authorised by the Financial Conduct Authority (FCA). Typical qualifications include a Certificate in Mortgage Advice and Practice (CeMAP) and a Certificate in Mortgage Advice qualification. 

Companies and loan officers must follow FCA regulations to ensure ethical lending practices. Ensure you understand the rules and guidance the FCA provides if you plan to work in any lending-related role.

5. Build your CV and prepare for interviews

Once you’re ready to begin your job search, take some time to build your CV, practise interviewing skills, and consider joining a professional organisation. When building your CV, include a professional summary, work experience, education, and credentials.

Begin with a compelling summary

The professional summary is one of the first things you’ll list on your CV, so it should be short and highly informative. As an aspiring loan officer, highlight your experience, knowledge of financial regulations, and relevant skills. If you have experience as a loan officer, mention any accolades or successes. 

Add experience

If you’re building a CV to land your first job as a loan officer, add volunteer experiences or other experiences that showcase your skills as a loan officer. You can also include experiences demonstrating interpersonal skills, such as leadership and teamwork, or other skills relevant to a career as a loan officer. 

Consider working in entry-level positions for organisations that may eventually hire you as a loan officer. Banks or other financial institutions typically have entry-level positions for which you can apply. Some organisations offer job shadowing, where you can aid mortgage advisers. This is a great way to get in with a potential employer and another way to gain relevant work experience for your CV.

Validate your skills

If you have yet to earn any certifications, you may enrol in training courses to add both experience and proof of skills to your CV. Listing courses, certifications, and other credentials can enhance your hireability and demonstrate proficiency in the field. 

Practise interviewing

Remember to also prepare for the interview process when building your CV. Take the time to practise interviewing skills, and research the employer and role for which you’re interviewing before the interview. Find out as many details as possible about the interview, including the interview format, who will attend, when and where it will take place, and any other questions you may have. Prepare responses to standard loan officer interview questions such as:

• How would you handle challenging clients? 

• Why do you want to be a loan officer? 

• How do you assess a loan application?

Build your network

If you need additional support, consider joining an institute, association, or professional body for individuals who work as mortgage lenders. Many of these organisations provide helpful resources, access to networking events, and other forms of industry knowledge and support that can help when seeking employment.

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 essential and rewarding career. As a loan officer, you’ll play a central role in helping others achieve their personal or business goals. 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, offered on Coursera.