How Do You Become a Loan Officer? - Education & Requirements

<p>Loan officers assess loan applications and decide which ones to recommend for approval. Most loan officers need a bachelor's degree in a field like business or finance to land a job in the industry. See below for a brief outline of the career. </p> <p /> <table border="1"><tr><td>
<b>Degree Required</b>
</td><td>
Bachelor's degree</td></tr> <tr><td>
<b>Education Field of Study</b>
</td><td>
Business, finance</td></tr> <tr><td>
<b>Training Required</b>
</td><td>
On-the-job training</td></tr> <tr><td>
<b>Key Skills</b>
</td><td>
People skills, detail-oriented, decision-making</td></tr> <tr><td>
<b>Licensure Required</b>
</td><td>
Mortgage Loan Originator (MLO) license</td></tr> <tr><td>
<b>Job Growth (2020-2030)</b>
</td><td>
1%*</td></tr> <tr><td>
<b>Median Salary (2020)</b>
</td><td>
$63,960 per year*</td></tr> </table><p><i>Source: *U.S. Bureau of Labor Statistics</i> </p> <h3 id="section---WhatDoLoanOfficersDo">What Do Loan Officers Do?</h3> <p>When companies and individuals need a loan, they typically come to a financial institution to get one. Loan officers are the gatekeepers to these institutions -- they are the ones who determine which applicants have the financial standing and history to warrant the inherent risk in lending. Loan officers consult with applicants to get personal details, understand the nature of the loan and help them gather the necessary documentation to apply. They'll also explain the options for loans and how the process works. </p> <p>Once they've applied, loan officers will check the applicant's credit score, financial statements and income, using that data to either approve or deny the loan. </p> <h3 id="section---WhatDegreeDoYouNeedToBecomeALoanOfficer">What Degree Do You Need to Become a Loan Officer?</h3> <p>Consumer loan officers -- the ones who give loans to individuals -- typically hold at least a bachelor's degree in a field like business or finance. In some cases, candidates with previous experience in banking or sales might be considered for a position without a postsecondary degree. Commercial loan officers -- the ones who approve loans for businesses -- deal with more complex regulations and paperwork (like an applying company's books) and so are often asked to have a tight grasp on the ins and outs of business accounting. </p> <h3 id="section---DoYouNeedALicenseToBeALoanOfficer">Do You Need a License to Be a Loan Officer?</h3> <p>Most loan officers don't need a license to work in the industry. The sole exception is for mortgage loan officers, who must obtain a Mortgage Loan Originator (MLO) license. To get one, they must submit to credit and background checks, go through a minimum of 20 hours of coursework and get a passing score on an exam. </p> <p>While certification isn't required for other loan officers, getting certified shows dedication to the career and could help with advancement. Several schools across the country, and organizations like the Mortgage Bankers Association and the American Bankers Association, offer classes, seminars and training for loan officers. </p> <h3 id="section---WhatAreSalariesLikeForLoanOfficers">What Are Salaries Like for Loan Officers?</h3> <p>Salary in this field may depend a great deal on the employer, the location and the loan officer's experience. Some employers pay a flat salary while others offer a commission on every loan. That said, the U.S. Bureau of Labor Statistics (BLS) does provide a median annual salary for all loan officers as of May 2020 -- $63,960. </p> <h3 id="section---HowMuchIsEmploymentGrowingInTheIndustry">How Much Is Employment Growing in the Industry?</h3> <p>Demand for loan officers is expected to increase as the economy does better. However, this may be tempered to a degree by the decrease in bank branches. On the whole, the BLS predicts that employment will grow by 1% between 2020 and 2030, which is much lower than the national average for all occupations.</p>