A loan officer represents a bank, credit union, or other financial institution and finds and assists borrowers in acquiring loans. Loan officers can work with a wide variety of lending products for both consumers and businesses. They must have a comprehensive awareness of lending products and banking industry rules, regulations, and required documentation.
Loan officers review loan applications and analyze an applicant's finances to determine who is eligible for a loan. They also educate consumers on loans, verify financial information, and contact individuals and companies to see if they qualify for a loan.
- Loan officers work with a lending institution and their borrowers to provide consultation, application, underwriting, approval, and deal-closing services on loans.
- The median annual wage for loan officers in 2020 (the most recent figure, as of Sept. 20) is $63,960.
- Most loan officers work 40-hour work weeks for an annual salary, plus benefits.
- A loan officer may work with individuals. Others work only with businesses for commercial loans.
- These financial professionals usually have a bachelor's degree in business or finance.
Loan Officer Salaries
The median annual wage for a loan officer in 2020 is $63,960. The lowest 10% of wage earners in this field earn a yearly salary of just under $32,820, but earners in the top 10% earn an average salary of over $132,290.
Wages vary based on the employer as well as job performance. Some loan officers are paid a flat salary or an hourly rate, but others earn commission on top of their regular compensation. Commissions are based on the number of loans these professionals originate or on how their loans are repaid.
Loan Officer Benefits
Most full-time loan officers receive standard benefits like health, vacation, and access to retirement accounts. Most loan officers work for a bank or private company, so the benefits vary depending on their employer.
Loan Officer Duties and Requirements
Loan officers communicate with numerous individuals to facilitate the lending process for banking clients. Loan products that may involve a loan officer can include personal loans, mortgage loans, and lines of credit. They work with a wide variety of lending products and have a comprehensive awareness of them and banking industry protocols, giving borrowers greater confidence in executing a lending deal.
Loan officers are a direct source of contact for borrowers seeking loans from financial institutions. Many borrowers prefer working with a loan officer directly to ensure that all of their needs are met. While traditional bank lending procedures can be more time-intensive, personal interaction often gives borrowers greater confidence in executing a lending deal.
A bachelor's degree is preferred for this financial career, and most applicants earn a degree in business, finance, accounting, or a related field. In some cases, people who have experience in a related business career can enter this field without a bachelor's degree.
Many employers offer a great deal of on-the-job training, but mortgage brokers must take classes and pass a test to get their mortgage broker's license.
Loan Officer Job Prospects
Because many different industries need loan officers, from real estate to banking, jobs are often available. However, according to the U.S. Bureau of Labor Statistics, the job market for loan officers will hold steady in the decade between 2020 to 2030. The BLS reports that approximately 25,000 openings for loan officers are projected each year, on average, over the decade.
These jobs will most likely occur because many loan officers may hit retirement age or leave the labor force for other reasons.
Salaries of Similar Professions
There are similar professions to loan officers, including loan processors, mortgage loan originators, and underwriters.
Working as a loan processor means a base salary of $53,934 a year, plus benefits. Loan processors, like loan officers, work for banks, mortgage lenders, and other loan-related services.
Mortgage Loan Orginators
This job earns a slightly higher salary than a loan processor. The average salary nationwide is around $75,000 a year. A mortgage loan originator works in the real estate industry and, depending on a few factors, like the company where the originator is employed, they may earn a commission.
According to the BLS, the average salary for an underwriter as of May 2020 is $71,790, and insurance underwriters with experience could earn upwards of $129,550.
What Is the Salary of a Mortgage Loan Officer?
The average salary of a mortgage loan officer is approximately $73,756.
What Is the Salary of an Agricultural Loan Officer?
The average salary of an agricultural loan officer is approximately $68,633.
What Is the Average Salary for a Loan Officer Assistant?
There isn't an average salary for a loan officer assistant, as it depends on too many factors from the company where the assistant is employed, if they work hourly or for an annual salary, and experience. According to the BLS, financial clerks who may do similar work as an assistant to a loan officer earn a median salary of $41,520.
What Are the Highest Paying Cities in the U.S. for Loan Officers?
According to data from ZipRecruiter, the three top-paying cities in the U.S. for loan officers are San Jose, CA, Oakland, CA, and Tanaina, AK.
The Bottom Line
Loan officers work in various fields and areas. Some loan officers work in real estate, others in banking or insurance as underwriters. Commercial loan officers specialize in business loans, whereas mortgage loan officers may handle residential and commercial mortgage loans, depending on their specialization.
Most loan officers have at least a bachelor's degree in finance or business. Some loan officers will need special designations or certifications, such as a mortgage broker, who must earn a license.