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How to Become a Loan Officer

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Making Money by Lending Money

Loan officers are responsible for making calculated decisions about an individual or business’ creditworthiness. This requires a great deal of research and analysis, and loan officers have to be diligent about ensuring they only make secure loans, so as not to put their employer’s financial stability at risk. The position is one in which solid math abilities, critical thinking skills and the ability to interact with customers are all vital tools for success. Loan officers typically work a 9-to-5 workday with weekends and holidays off, which make it an attractive career option for working parents.

Job Description

A loan officer typically meets with interested borrowers to discuss the types of financial options that are available to them based on their credit, earnings and specific lending needs. A loan officer often has a variety of loan products and services available and works with the customers determine the right product for their needs. The loan officer then helps with loan application preparation and ensures all documentation necessary for a loan application is in place. These documents could include an individual or business’s financial statements, identification, and even letters of support or business plans. The loan officer is then responsible for assessing the potential borrower’s credit and evaluating all pertinent information to determine if a loan should be made, and if so, the terms of the agreement. Terms can include loan amount, duration and interest rate.

Education Requirements

Loan officers are typically required to have a bachelor’s degree in finance or business, although an MBA can lead to higher salaries as well as management opportunities. Some on-the-job training and job shadowing are typically available in this industry. Continuing education is usually also required to ensure that loan officers stay abreast of lending trends and changes in finance law and lending industry regulations.


Loan officers can be found in banks, credit unions, mortgage brokerages, credit card companies, car dealerships and brokerage firms. A loan officer often works with underwriters, credit counselors and other banking professionals. Loan officers may specialize in a particular area, such as small business loans, building loans, residential mortgages, commercial or auto loans.

Years of Experience

The median average salary for a loan officer in 2020 was $63,960. The more experience a loan officer has, the greater the potential for salary growth:

  • 0‒5 years: $39,972‒$87,507
  • 5‒10 years: $51,670‒111,161
  • 10‒20 years: $60,043‒$133,766
  • Over 20 years: $56,560‒$146,414

Job Growth Trend

Banking is now both a bricks-and-mortar and an online business, making qualified and experienced loan officers in high demand. While computational formulas have made it easier to calculate loan eligibility and to quickly generate common terms and agreements, human oversight is still an important part of the process. According to the U.S. Department of Labor Bureau of Labor Statistics, jobs for loan officers are anticipated to grow by more than 11 percent over the next decade, a higher growth rate than in many other industries.


Lisa McQuerrey has been a business writer since 1987. In 1994, she launched a full-service marketing and communications firm. McQuerrey's work has garnered awards from the U.S. Small Business Administration, the International Association of Business Communicators and the Associated Press. She is also the author of several nonfiction trade publications, and, in 2012, had her first young-adult novel published by Glass Page Books.

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