Summary

loan officers image
Loan officers meet with potential borrowers and approve loans.
Quick Facts: Loan Officers
2016 Median Pay $63,650 per year
$30.60 per hour
Typical Entry-Level Education Bachelor's degree
Work Experience in a Related Occupation None
On-the-job Training Moderate-term on-the-job training
Number of Jobs, 2016 318,600
Job Outlook, 2016-26 11% (Faster than average)
Employment Change, 2016-26 36,500

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 many 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 $63,650 in May 2016.

Job Outlook

Employment of loan officers is projected to grow 11 percent from 2016 to 2026, faster than 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.

State & Area Data

Explore resources for employment and wages by state and area for loan officers.

Similar Occupations

Compare the job duties, education, job growth, and pay of loan officers with similar occupations.

More Information, Including Links to O*NET

Learn more about loan officers by visiting additional resources, including O*NET, a source on key characteristics of workers and occupations.

What Loan Officers Do About this section

Loan officers
Consumer loan officers specialize in loans to people, such as loans for buying cars or paying for college tuition.

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.

Work Environment About this section

Loan officers
Most loan officers work full time.

Loan officers held about 318,600 jobs in 2016. The largest employers of loan officers were as follows:

Depository credit intermediation 42%
Nondepository credit intermediation 28
Activities related to credit intermediation 9
Management of companies and enterprises 6
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 many work extensive hours.

How to Become a Loan Officer About this section

Loan officers
Loan officers must pay attention to detail, as each piece of information on an application can have a major effect on the profitability of a loan.

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

Education

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.

Training

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 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.

Important Qualities

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.

Pay About this section

Loan Officers

Median annual wages, May 2016

Financial specialists

$68,780

Loan officers

$63,650

Total, all occupations

$37,040

 

The median annual wage for loan officers was $63,650 in May 2016. 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 $32,820, and the highest 10 percent earned more than $132,290.

In May 2016, the median annual wages for loan officers in the top industries in which they worked were as follows:

Automobile dealers $85,140
Management of companies and enterprises 68,340
Depository credit intermediation 62,890
Activities related to credit intermediation 61,540
Nondepository credit intermediation 61,300

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.

Most loan officers work full time, and many work extensive hours.

Job Outlook About this section

Loan Officers

Percent change in employment, projected 2016-26

Loan officers

11%

Financial specialists

10%

Total, all occupations

7%

 

Employment of loan officers is projected to grow 11 percent from 2016 to 2026, faster than 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.

Economic growth will lead to more demand for loan officers, as both businesses and individuals seek credit to finance commercial investment and personal expenditure.  Loan officers will be needed to evaluate the creditworthiness of applicants, and determine the likelihood that loans will be paid back in full and on time.

Employment of loan officers in commercial banks and savings institutions is projected to grow 3 percent from 2016 to 2026. As bank customers increasingly use mobile and online banking services, the need for bank branches will decline. Banks have decreased the number of branches in operation in recent years, and this trend is expected to continue. Because the banking industry is the leading employer of loan officers, this trend will depress employment growth for these workers.    

Job Prospects

Job opportunities should be good for people with lending, banking, or sales experience. In addition, some firms require loan officers to find their own clients, so candidates with established contacts and a referral network should have the best job opportunities.

Employment projections data for loan officers, 2016-26
Occupational Title SOC Code Employment, 2016 Projected Employment, 2026 Change, 2016-26 Employment by Industry
Percent Numeric

SOURCE: U.S. Bureau of Labor Statistics, Employment Projections program

Loan officers

13-2072 318,600 355,100 11 36,500 employment projections excel document xlsx

State & Area Data About this section

Occupational Employment Statistics (OES)

The Occupational Employment Statistics (OES) program produces employment and wage estimates annually for over 800 occupations. These estimates are available for the nation as a whole, for individual states, and for metropolitan and nonmetropolitan areas. The link(s) below go to OES data maps for employment and wages by state and area.

Projections Central

Occupational employment projections are developed for all states by Labor Market Information (LMI) or individual state Employment Projections offices. All state projections data are available at www.projectionscentral.com. Information on this site allows projected employment growth for an occupation to be compared among states or to be compared within one state. In addition, states may produce projections for areas; there are links to each state’s websites where these data may be retrieved.

CareerOneStop

CareerOneStop includes hundreds of occupational profiles with data available by state and metro area. There are links in the left-hand side menu to compare occupational employment by state and occupational wages by local area or metro area. There is also a salary info tool to search for wages by zip code.

Similar Occupations About this section

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

Occupation Job Duties ENTRY-LEVEL EDUCATION Help 2016 MEDIAN PAY Help
Financial analysts

Financial Analysts

Financial analysts provide guidance to businesses and individuals making investment decisions. They assess the performance of stocks, bonds, and other types of investments.

Bachelor's degree $81,760
Financial examiners

Financial Examiners

Financial examiners ensure compliance with laws governing financial institutions and transactions. They review balance sheets, evaluate the risk level of loans, and assess bank management.

Bachelor's degree $79,280
Personal financial advisors

Personal Financial Advisors

Personal financial advisors provide advice on investments, insurance, mortgages, college savings, estate planning, taxes, and retirement to help individuals manage their finances.

Bachelor's degree $90,530
Tax examiners and collectors, and revenue agents

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 federal, state, and local governments. They review tax returns, conduct audits, identify taxes owed, and collect overdue tax payments.

Bachelor's degree $52,060
Insurance sales agents

Insurance Sales Agents

Insurance sales agents contact potential customers and sell one or more types of insurance. Insurance sales agents explain various insurance policies and help clients choose plans that suit them.

High school diploma or equivalent $49,990
Securities, commodities, and financial services sales agents

Securities, Commodities, and Financial Services Sales Agents

Securities, commodities, and financial services sales agents connect buyers and sellers in financial markets. They sell securities to individuals, advise companies in search of investors, and conduct trades.

Bachelor's degree $67,310
Real estate brokers and sales agents

Real Estate Brokers and Sales Agents

Real estate brokers and sales agents help clients buy, sell, and rent properties. Although brokers and agents do similar work, brokers are licensed to manage their own real estate businesses. Sales agents must work with a real estate broker.

High school diploma or equivalent $46,410
Financial managers

Financial Managers

Financial managers are responsible for the financial health of an organization. They produce financial reports, direct investment activities, and develop strategies and plans for the long-term financial goals of their organization.

Bachelor's degree $121,750
Tellers

Tellers

Tellers are responsible for accurately processing routine transactions at a bank. These transactions include cashing checks, depositing money, and collecting loan payments.

High school diploma or equivalent $27,260

Contacts for More Information About this section

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,
on the Internet at https://www.bls.gov/ooh/business-and-financial/loan-officers.htm (visited November 01, 2017).

Last Modified Date: Tuesday, October 24, 2017

What They Do

The What They Do tab describes the typical duties and responsibilities of workers in the occupation, including what tools and equipment they use and how closely they are supervised. This tab also covers different types of occupational specialties.

Work Environment

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How to Become One

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Pay

The Pay tab describes typical earnings and how workers in the occupation are compensated—annual salaries, hourly wages, commissions, tips, or bonuses. Within every occupation, earnings vary by experience, responsibility, performance, tenure, and geographic area. For most profiles, this tab has a table with wages in the major industries employing the occupation. It does not include pay for self-employed workers, agriculture workers, or workers in private households because these data are not collected by the Occupational Employment Statistics (OES) survey, the source of BLS wage data in the OOH.

State & Area Data

The State and Area Data tab provides links to state and area occupational data from the Occupational Employment Statistics (OES) program, state projections data from Projections Central, and occupational information from the Department of Labor's CareerOneStop.

Job Outlook

The Job Outlook tab describes the factors that affect employment growth or decline in the occupation, and in some instances, describes the relationship between the number of job seekers and the number of job openings.

Similar Occupations

The Similar Occupations tab describes occupations that share similar duties, skills, interests, education, or training with the occupation covered in the profile.

Contacts for More Information

The More Information tab provides the Internet addresses of associations, government agencies, unions, and other organizations that can provide additional information on the occupation. This tab also includes links to relevant occupational information from the Occupational Information Network (O*NET).

2016 Median Pay

The wage at which half of the workers in the occupation earned more than that amount and half earned less. Median wage data are from the BLS Occupational Employment Statistics survey. In May 2016, the median annual wage for all workers was $37,040.

On-the-job Training

Additional training needed (postemployment) to attain competency in the skills needed in this occupation.

Entry-level Education

Typical level of education that most workers need to enter this occupation.

Work experience in a related occupation

Work experience that is commonly considered necessary by employers, or is a commonly accepted substitute for more formal types of training or education.

Number of Jobs, 2016

The employment, or size, of this occupation in 2016, which is the base year of the 2016-26 employment projections.

Job Outlook, 2016-26

The projected percent change in employment from 2016 to 2026. The average growth rate for all occupations is 7 percent.

Employment Change, 2016-26

The projected numeric change in employment from 2016 to 2026.

Entry-level Education

Typical level of education that most workers need to enter this occupation.

On-the-job Training

Additional training needed (postemployment) to attain competency in the skills needed in this occupation.

Employment Change, projected 2016-26

The projected numeric change in employment from 2016 to 2026.

Growth Rate (Projected)

The percent change of employment for each occupation from 2016 to 2026.

Projected Number of New Jobs

The projected numeric change in employment from 2016 to 2026.

Projected Growth Rate

The projected percent change in employment from 2016 to 2026.

2016 Median Pay

The wage at which half of the workers in the occupation earned more than that amount and half earned less. Median wage data are from the BLS Occupational Employment Statistics survey. In May 2016, the median annual wage for all workers was $37,040.