Loan Officers

Career summary

Loan officers may also be called loan originators or mortgage consultants.

Loan officers interview loan applicants and review their applications to make sure they are complete.

Loan officers analyze the applicants' financial status. They determine the value of property that is offered to secure the loan. They also check the value of the item being purchased, such as a car or house.

Officers send applications to credit analysts and read the reports they receive. They may contact applicants and ask them additional questions based on concerns raised by the credit analysts. Officers may re-calculate the loan payment schedule based on new information from applicants. They may also talk to underwriters about some loans.

Once loan officers are satisfied they have enough information, they submit the loan to a loan committee for approval. Based on the committee's recommendation, loan officers approve or deny the loan request. They may also approve a smaller loan than the applicant asked for. Officers fill out the final paperwork with applicants. They explain the completed loan papers, payment schedule, and terms to the borrowers.

Many loan officers examine the market for the possibility of new loan business. They make sales calls to potential borrowers. Some negotiate sales of groups of loans to investors. They often help advertise the services of their bank.

Some loan officers collect past due loans. They try to set up a new payment plan with borrowers. If that does not work, loan officers prepare legal documents asking for the property to be returned to the bank. They then arrange for the care and sale of the property.

Loan officers often specialize in certain types of loans, such as:

• Agricultural
• Commercial
• Installment
• Real estate

Loan officers often supervise clerks in the preparation of loan documents.

Related careers

This career is part of the Finance cluster of careers.

Related careers include:

• Bank Tellers
• Billing Clerks
• Brokerage Clerks
• Credit Analysts
• Financial Analysts
• Financial Counselors
• Insurance Underwriters
• Loan Clerks
• New Accounts Clerks
• Securities Salespeople
• Tax Examiners
• Tax Preparers

Job duties

Task list

The following list of tasks is specific to loan officers.

• Interview loan applicants and request information needed for the application.
• Analyze the applicants' financial status. Determine the value of property offered to secure the loan.
• Ensure loan papers are complete and accurate.
• Submit loan applications to credit analysts. Read the analysts' reports.
• Contact applicants to resolve questions about loan applications.
• Confer with underwriters to resolve application problems.
• Compute the loan payment schedule.
• Refer the loan to a loan committee for approval.
• Approve or deny loans. Set credit policies, credit lines, and procedures for borrowers to access funds.
• Explain the completed loan papers, payment schedule, and terms to borrowers.
• Supervise the work of loan clerks.
• Analyze loan markets to develop new business.
• Come to an agreement on repayment with customers who are behind on their loans.
• Petition the court to transfer titles and deeds of property to the lender.
• Arrange for the care and sale of property that secures unpaid loans.
• Market bank products and promote bank services.

Common work activities

Loan officers perform the following tasks. These tasks are common to many careers.

• Get information needed to do the job
• Make decisions and solve problems
• Establish and maintain relationships
• Use computers
• Process information
• Organize, plan, and prioritize work
• Perform for or work with the public
• Update and use job-related knowledge
• Communicate with people outside the organization
• Resolve conflicts and negotiate with others
• Communicate with supervisors, peers, or subordinates
• Convince others to buy goods or change their minds or actions
• Perform administrative tasks
• Evaluate information against standards
• Analyze data or information
• Provide advice and consultation to others
• Explain the meaning of information to others
• Document and record information
• Schedule work and activities
• Identify objects, actions, and events
• Think creatively
• Coordinate the work and activities of others
• Judge the value of objects, services, or people
• Develop goals and strategies

Work requirements

Working conditions

In a typical work setting, loan officers:

Interpersonal relationships

• Have a high level of social contact. They talk to customers, but also spend time alone reviewing applications.
• Communicate by telephone, e-mail, and in person on a daily basis. They also write letters and memos.
• Are moderately responsible for the work done by the loan clerks they supervise.
• May on occasion be placed in conflict situations where customer might be rude or angry.
• Often work as part of a team.

Physical work conditions

• Work indoors, except when visiting customers or inspecting properties.
• May work close to others, such as when sharing office space.

Work performance

• Must be very exact in their work and be sure all details are done. Errors on loan applications or in analyses could cause the bank to make bad loans.
• Make decisions on a daily and weekly basis that greatly impact customers and their company's reputation.
• Make most decisions without consulting another first.
• Set nearly all their daily tasks and goals without consulting a supervisor first.
• Work in a competitive atmosphere where strict daily and weekly deadlines must be met.
• Repeat the same physical and mental activities.

Hours/travel

• Usually work at least 40 hours per week.
• May work a lot of overtime during periods when home sales and refinancing are heavy. This applies mainly to mortgage loan officers.
• May travel around town to visit customers, inspect properties, and conduct loan negotiations.
• May travel to other cities or states to set up complex loan agreements. This applies mainly to commercial loan officers.
• Generally work a set schedule.

Physical demands

Loan officers frequently:

• Sit for long periods of time.

It is important for loan officers to be able to:

• Speak clearly so listeners can understand.
• Understand the speech of another person.
• See details of objects that are less than a few feet away.

It is not as important, but still necessary, for loan officers to be able to:

• Use fingers to grasp, move, or assemble very small objects.
• Focus on one source of sound and ignore others.

Skills and abilities

Loan officers need to:

Communicate

• Speak clearly so listeners can understand.
• Listen to others and ask questions.
• Understand spoken information.
• Read and understand work-related materials.
• Understand written information.
• Write clearly so other people can understand.

Reason and problem solve

• Judge the costs and benefits of a possible action.
• Combine several pieces of information and draw conclusions.
• Notice when something is wrong or is likely to go wrong.
• Use reasoning to discover answers to problems.
• Analyze ideas and use logic to determine their strengths and weaknesses.
• Follow guidelines to arrange objects or actions in a certain order.
• Understand new information or materials by studying and working with them.
• Recognize the nature of a problem.

Use math and science

• Add, subtract, multiply, and divide quickly and correctly.
• Choose a mathematical method or formula to solve problems.
• Use math skills to solve problems.

Manage oneself, people, time, and things

• Manage the time of self and others.
• Check how well one is learning or doing something.

Work with people

• Look for ways to help people.
• Be aware of others' reactions and understand the possible causes.
• Change behavior in relation to others' actions.
• Teach others how to do something.

Education and training

Educational programs

The programs of study listed below will help you prepare for the occupation or career cluster you are exploring.

Programs of study directly related to this occupation

• Business Economics
• Business Management and Administration
• Finance

Other programs of study to consider

• Accounting
• Agricultural Business and Management
• Economics
• Real Estate

Training

To work as a loan officer, you typically need to:

• have a high school diploma or equivalent;
• have a bachelor's degree; and
• complete moderate-term, on-the-job training.

Education after high school

Most loan officers have a bachelor's degree. The best preparation is a major in finance, economics, or a closely related field. Whatever major you choose, you should take courses in banking, finance, computers, and business administration.

Work experience

Some people work their way up to loan officer. They need many years of experience in banking before they can be promoted to this occupation.

A job as a teller or customer service representative in a bank or credit union is good background for this occupation.

Sales experience is valuable if you want to become a commercial or mortgage loan officer.

On-the-job training

Many banks provide additional training. Some pay for their employees to take college courses related to the field.

In addition, the first few months on the job may serve as an introductory period. You may work with more experienced loan officers to gain skills. This training may last up to one year.

Helpful high school courses

In high school, take classes that prepare you for college. A college preparatory curriculum may be different from your state's graduation requirements.

You should also consider taking some advanced courses in high school. This includes Advanced Placement (AP) and International Baccalaureate (IB) courses if they are available in your school. If you do well in these courses, you may receive college credit for them. Advanced courses can also strengthen your college application.

Helpful electives to take in high school that prepare you for this career include:

• Accounting
• Banking and Finance
• Computer Applications
• Economics
• Personal Finance

The courses listed above are meant to help you create your high school plan. If you have not already done so, talk to a school counselor or parent about the courses you are considering taking.

You should also check with a teacher or counselor to see if work-based learning opportunities are available in your school and community. These might include field trips, job shadowing, internships, and actual work experience. The goal of these activities is to help you connect your school experiences with real-life work.

Join some groups, try some hobbies, or volunteer with an organization that interests you. By participating in activities you can have fun, make new friends, and learn about yourself. Maybe one of them will help direct you to a future career. Here are examples of activities and groups that may be available in your high school or community.

Things to know

Employers prefer applicants who have a bachelor's degree. They look for applicants who have studied economics, finance, accounting, or business administration. Many banks promote their own workers to loan officers. These workers usually need several years of experience as a bank teller or loan clerk.

Employers look for applicants who have good math and analytical skills. They also look for applicants who have good communication skills, because they must explain difficult concepts to loan applicants. In addition, employers look for applicants who are a good judge of character. Sometimes loan officers must trust their instincts about whether applicants will pay back loans. Finally, employers look for applicants who are honest, because they deal with large amounts of money.

College work beyond a bachelor's degree may improve job prospects, especially when applying for a specialty position such as investment securities analyst. On-the-job training is very important if you would like to work in the areas of commercial or real-estate lending. Knowledge of federal and state laws pertaining to the mortgage-banking industry is helpful. Employers may prefer applicants who are bilingual.

Some banks provide in-service training or give financial aid to employees taking course work at college.

Tips

Some banks and lending institutions offer summer and part-time jobs to college students. This is an excellent way to gain experience. Good workers may be hired permanently after graduation. Take courses in accounting, consumer lending, and communications.

Costs to workers

Workers are usually expected to have business attire. They may wish to join a professional association, which may have annual dues.

#Added this CTW content from txt file 2/9/11, cj.

Licensing/certification

Loan officers who work as independent loan processors for licensed mortgage brokers or loan processing companies must be licensed by the Washington State Department of Financial Institutions. Licensing requirements include:

• being at least 18 years of age;
• a high school diploma or equivalent;
• demonstration of financial responsibility, character, and general fitness to perform the job;
• completion of 22 hours of Nationwide Mortgage Licensing System approved education coursework, including four hours in Washington law;
• a background check and credit report, including submission of fingerprints;
• passing a written exam that includes national and state components covering the mortgage business and related regulations; and
• completion of nine approved continuing education hours, including one hour of Washington law, every year for license renewal. A new background check and credit report is also required for license renewal.

The licensing application fee is $155. There are additional costs for background and credit checks. Loan officers must pay for continuing education courses each year to renew their license. 

#checked & updated fees (app fee amt includes $39 background check fee)1/31/12 lh. The National Test and State Test were retired in March 2013 & no note on cost for exams was given so removed this information 2/25/15 ccj.

#Updated CE hours; rest ok 3/12/13 & 2/25/15 (also updated coursework hours), cj. Updated CE hours & added new background & credit rpt req for renewal, 11/14/16 cj.

For more information, contact:

Washington State Department of Financial Institutions
Division of Consumer Services 
PO Box 41200
Olympia, WA 98504-1200
360.902.8703
877.746.4334

#Checked licensing section 1/25/16 lh & 11/14/16, 4/10/19 cj.

Job listings

Listed below are links to job categories from the National Labor Exchange that relate to this career. Once you get a list of jobs, you can view information about individual jobs and find out how to apply. If your job search finds too many openings, or if you wish to search for jobs outside of Washington, you will need to refine your search.

• Credit Counselors 
• Loan Officers 

To get a listing of current jobs from the WorkSource system, go to the WorkSource website .

Wages

Some lenders pay loan officers a commission based on the number or amount of the loans they make. A commission is a bonus payment that serves as an incentive to make more loans. The more loans made, the higher their wages. Other employers may pay loan officers a straight salary with no commissions. Still others pay a combination of salary plus commissions or bonuses.

Wages vary by specialization. In general, commercial loan officers earn more than those who specialize in consumer or mortgage loans.

Loan officers who work full time usually receive benefits. Typical benefits include sick leave, paid vacation, and health insurance. Some employers also provide a retirement plan.

Employment and outlook

Washington outlook

#Between 2014 and 2024, it is estimated that there will be nine openings annually due to new positions and 105 openings annually from workers leaving this career.

#Updated outlook 06.16 sd

In Washington, the outlook depends on economic prosperity, automation of financial services, and expansion of banking and private financing activities. Some job openings for loan officers will occur due to workers who retire or leave the occupation.

The table below provides information about the number of workers in this career in various regions. It also provides information about the expected growth rate and future job openings.

National employment

Most loan officer jobs are located in cities or suburbs. In rural areas, branch managers or assistant managers often handle loan officer duties.

Major employers:

• Banks and credit unions
• Mortgage bankers and brokers
• Personal credit companies

National outlook

Demand for this occupation will be strong. The number of loan applications processed each year is expected to increase as the economy recovers and more people apply for loans. Similarly, many businesses postponed borrowing funds for maintenance, improvement, and expansion during the recession. Commercial loans should increase as businesses are more willing to borrow and banks are more willing to lend.

More underwriting is now done by computers. This will slightly decrease the demand for loan officers.

Job outlook in this occupation is affected by changes in the economy. An economic downturn and a rise in interest rates could lead to a drop in demand for loans. Job prospects are best for people with banking, loan, or sales experience.

Other resources

American Bankers Association 
1120 Connecticut Avenue NW
Washington, DC 20036
800.226.5377
202.663.5000

Consumer Bankers Association 
1225 Eye Street NW, Suite 550
Washington, DC 20005
202.552.6373

eFinancialCareers 

National Assocation of Mortgage Brokers 
601 Pennsylvania Ave. NW, South Building
Washington, DC 20004
202.434.8250

National Association of Consumer Credit Administrators 
1000 Potomac Street, NW
Suite 108
Washington, DC 20007

References

Career cluster

• Finance

Career path

• Enterprising (Business Communications)

O*Net  occupation

• Loan Officers (13-2072.00) 

O*Net job zone 

• Job Zone 3 - Medium preparation needed. Previous work-related skill, knowledge, or experience is required for these occupations.

DOT occupations

• Commercial Loan Collection Officer (186.167-078) 
• Financial-aid Counselor (169.267-018) 
• Loan Officer (186.267-018) 
• Underwriter, Mortgage Loan (186.267-026) 

Holland occupational cluster

• Conventional/Enterprising/Social

COPSystem

• Business Skilled