ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

How to Become a Loan Officer

Updated on March 20, 2011

Job Can Be Very Rewarding Financially

Loan officers are employees of financial institutions whose job it is to make loans to customers. Having a college degree does not hurt but it is generally not a requirement for the job.

What is needed is the ability to deal with customers, the ability to know the lending institution’s current lending guidelines and interest rates, know and follow the legal rules and regulations concerning lending and be able to evaluate a prospective borrower’s ability and willingness to repay the loan.

Most lenders generally require a high school education as a condition for employment. A college education is helpful and may help one to rise faster in the field but it is usually not a requirement.

Experience is what really counts in this field. Generally, a person desiring to become a loan officer will start in the customer service area of a financial institution such as bank teller, collections clerk (calling existing borrowers who are behind in their payments and getting them to bring their accounts current) or as a loan representative who helps applicants initiate applications for small loans such as personal loans and credit cards or even larger loans. 

Loan representatives are generally sales people who take applications and other people or computers make the decisions as to whether or not the loan will be granted and then generate the paperwork which the loan representative will then have the borrowers sign.

The loan representative may do some preliminary screening to weed out those who obviously don’t qualify, but the real decisions are made elsewhere.

Moving up the latter in this career field, we have loan officers who specialize in auto loans, home mortgage loans and commercial business loans. These, much higher paying positions, are first and foremost, sales jobs in which the loan officer is expected to actively seek and solicit borrowers for business.

In the case of automobile and home loans this means working with new and used car salesmen for referrals of car buyers. In the case of home mortgage loans this means working with real estate agents for referrals of home buyers.

With commercial business loans this involves the loan officer developing relationships with businesses to encourage them to work with the loan officer when the business needs to borrow money.

Most loan officers in this category are either paid a salary and given a quota to meet in terms of dollar volume of new loans or are paid on commission with their pay being a percentage of the loan business they generate.

In addition to sales, the loan officer must collect and evaluate information about the borrower’s ability to repay the loan and the quality of collateral (car, home, business assets being pledged as security) and determine whether or not to make the loan.

Sometimes the loan officer is empowered to make the decision as to whether or not to make the loan (in these cases the loan officer is given authority to make loans up to a certain dollar amount without approval from others) and in other cases the loan officer has to submit loans to a loan committee for approval and be prepared to argue the case for making the loan to the committee.

If you are looking for a challenging job that involves working with and helping people as well as has the potential, at the upper end of the profession, for unlimited income then this career is for you.


    0 of 8192 characters used
    Post Comment

    • Chuck profile image

      Chuck Nugent 5 years ago from Tucson, Arizona

      Pablo - Legally, this his may or may not be a scam. I have not checked the site you mentioned or researched it so this comment is based solely on what you wrote in your comment.

      Assuming this company is legitimate, it appears to me that what they are trying to do is obtain customers in volume by having lots of websites. This could be profitable for them as they would have the bulk of the revenue from the loan business while people like you were paying for their marketing. Any loans you generate through your site would give you a little income but I doubt it would be in excess of your costs.

      Another possibility is that they are really in the business of selling websites and make their money through the fees they charge people like you while another company handles the lending part. Again, there is the possibility that you could make money but it would probably require considerably more marketing effort and expertise on your part.

      Finally, from the sound of your comment you are not familiar with the lending industry and the job of a loan officer. My advice for you would be to try to get an entry level job, such as a teller position, in a bank where you can learn how the system operates and work your way up to a loan officer position.

    • profile image

      pablo 5 years ago

      I receive a phone call they offer me a loan agent job they tell me that i will receive a coach an my own website where i can manage the job but they were asking me to pay 300 usd and 20 usd monthly for license fee and the 20usd for other i dont know for what but i did not take the offer because it was phone call that could be fake so i ask them for the info they were calling from honestly i donot have 300 usd at this time but been a loan agent sounds like a good idea i also want to investigate first to see if is a good option or not can you please tell if there is other companies hiring with no start up fee costs to be a loan agent where they provide a website let me know my email is

    • profile image

      shhnatasha 6 years ago from North Carolina

      I am fortunate to get a position as a LO, that offers a small base and commission. I have lots of customer service experience...I am just trying to get a book or course that will help me to jump start my mortgage knowledge. Any tips..

    • profile image

      Tony 7 years ago


      The hiring package and conditions of your employment are standard for the the industry. Good luck to you!!

    • profile image

      Mendel Potok 7 years ago

      Is it a similar process to become a mortgage broker, or do you need a college education?

    • profile image

      M.A.Anwar 7 years ago

      Very good and informative hub for peoples thinking about loan office job.

    • profile image

      Leah 7 years ago

      Hi Chuck, I was just offered a position as a starting loan officer at a local firm. I am still attending college and I am a little worried this job is almost to good to be true. They say I will make between 40k-60k a year starting out and they will be sending me to an extensive training first which I will not be paid for but I do not have to pay for it as well. They also tell me that I won't make money for at least the 1st 30 days as it takes that long to close a loan. Is it odd that I won't be paid for 30 days or is that normal? Maybe I am just being paranoid but your advise would really help! Thanks!

    • Chuck profile image

      Chuck Nugent 7 years ago from Tucson, Arizona

      Jack - thanks for your comment, however, I think that the insults directed against the writer of the previous comment and his opinions were inappropriate.

      I agree with you that, if a buyer keeps a mortgage for the full 30 years the total interest paid will be considerably higher than the principal. However, you forget that there are other factors involved here:

      1 if the borrower does not borrow, it will take years to save and accumulate the money needed to pay cash for a home. In the meantime, that person will have to live someplace and will have to pay rent for that place and, after years of living there and paying rent will nothing to show for the payments in terms of equity.

      2 The federal and most state income tax laws are structured to allow homeowners to deduct the cost of both interest and property taxes on the dwelling from their gross income for tax purposes. This can drop them down one or more tax brackets and that is a real savings. However, if they rent, the rent will include the interest cost of the landlord's loan as well as the cost of property taxes but for Federal and most state income tax programs it will be the landlord and not the renter who gets the tax credit for this.

      3 In times of inflation property values will generally increase with inflation and this will help the homeowner's net worth to at least keep up with inflation. Also, if a person has a fixed rate mortgage loan, which are common now, their monthly housing expense (other than the property tax portion) will remain fixed while rents will increase with inflation.

    • profile image

      Jack 7 years ago

      Joe, are you serious? How do u save somebody money by giving them a loan??? You mean they pay interest back that is more than the principal, and a 300K house will cost them at the end of 30 years 650K? That is what you call savings? Get a degree man, I feel sorry for this country that tellers and loan officers can do their jobs with a GED, high school education and 1.5 working cells in their brain. Yuck to all of you high school dropouts. I have an MBA and I work for a very large bank doing research. And when I see comments like, hey, the market is up, cause we closed 8 loans per month, I feel sorry for this country. Joe, community college is waiting for you buddy.

    • profile image

      Joe 8 years ago

      Come on, what are you people talking about. I work for a privately owned direct lender, and our branch alone is closing a minimum of 8 loans a month, not including our other branches. The market is starting to turn around and we are doing very very good for ourselves. The money we are all making is unbelievable and won't say a dollar amount. Yes, home values are still down, but the majority of people are begging us to do loans for them, and we find a way to get it done for them. Yes, there are some that we just can't do it for because of income or credit, but there are a lot of people out there with great numbers all around. I love my job, love the business, and when we close a loan for someone and save them thousands of dollars, there's nothing more satisfying then helping someone out and their appreciation for it.

    • profile image

      paydayloansonline101 8 years ago

      I was looking for this, i'm really into the payday loan thing in the past year, your hub helped me to take it to the next stage...

    • Chuck profile image

      Chuck Nugent 8 years ago from Tucson, Arizona

      Chris, thanks for your comments. I totally agree with you in all of your points but take a little exception to where you said "...except for the comment about being a tough time to enter the industry."

      My point above was that, in the midst of a housing market collapse, this is not a good time for a person to simply jump in the business as a loan officer. At the end of your entry you state "...I would encourage everyone who is interested in becoming a loan officer to pick up a good book and begin the training..." and this is the point I was trying to make, namely that now is an excellent time for people to get into the industry and start training and learning the job. My main point was that such people should seek out jobs in the industry that will prepare them to become a loan officer while providing them a regular paycheck while they learn. Then, once they are prepared they can move into a market on the upturn with the skills needed to survive and prosper on a commission only income.

      Thanks again for contributing your good advice.

    • profile image

      Chris 8 years ago

      I would have to agree with most of you except for the comment about being a tough time to enter the industry. Yes, the market is down and the real estate market has decreased its volume since this economic downfall, but that also means people are looking for professionals that can help guide them though the process and help to feel comfotable about buying the home of their dreams. It is also a great time to buy, so a good target is to try to get some investors that have the upfront stability and income to make purchases at much less prices than the old market value....I would encourage everyone who is interested in becoming a loan officer to pick up a good book and begin the training....This is perhaps one of the most rewarding jobs out there, and the sky is the limit when it comes to income....

    • profile image

      shardy 8 years ago

      This is actually the best time to get into this market because you have a little longer learning curve while you position yourself to be the "GO TO" person in the marketplace and when the market comes back - and it will - you're the big Dog on Campus!

    • profile image

      shardy 8 years ago

      This would actually be the best time to get in the market in any of the challenged fields - real estate agent, loan officer, etc. because the market will come back and while you're learning you can be building a list of customers and learning how to bring value to yourself and others. And when the comeback comes - and it will - you're y

    • profile image

      loan modification 9 years ago

      Though these courses are available online as well as in our cities but getting a job in this time of crunch is something ompossible task of you really can not associate yourself with some attorney or law firm or say lending organization using your contacts. But again this job prospects as a hot job are not going to be long enough I think . What do you say ?

    • Chuck profile image

      Chuck Nugent 10 years ago from Tucson, Arizona

      Shawn, thanks for visiting my Hub and for your comments. The only loan officer training courses that I am aware of, both traditional classroom and online, are usually offered by trade associations like the American Bankers Association (ABA) and are usually only available to employees of member lenders. There are some community colleges which offer courses in lending but you would have to search to find one. A Google search for online loan officer training courses might yield some courses of this nature.

      As to realestate courses, some of which would be of help to people interested in mortgage lending, these are usually subject to regulation by the various states. The last time I checked for an online realestate broker license course for a student I discovered that, in Arizona at least, they are not allowed as the requirement is that students wishing to sit for the Arizona realtors license exam must have first completed an approved realestate training course taught in a classroom located within the borders of the state of Arizona. This is obviously intended to help limit the number of realtors by preventing out of state realtors come in, pass the test and go to work immediately.

    • profile image

      Shawn 10 years ago

      Hi, this is a very valuable hub with great piece of information, but the only piece of infomrmation missing, or I think it shold have been is the mention of some good accreddited online classes on the innternet for people like us. Do mention some names on good onnline Real Estate Courses if you can.

    • vrajavala profile image

      vrajavala 10 years ago from Port St. Lucie

      I tried it last year and was very busy. I had a very good mentor also and worked for Equity Bank, but then resigned when he went to Amerisave. Unfortunately, Amerisave would only hire me as an "on the road" employee, not an at home officer. It was quite interesting, but obviously, it was just the wrong time to enter the industry.

    • Chuck profile image

      Chuck Nugent 10 years ago from Tucson, Arizona

      Marc - thanks for visiting my article and for your comment. I think that you misunderstood my reply (4 comments above yours) about prospecting for clients. First of all my banking experience took place 20+ years ago when most loan officers were salaried employees (although they were often given quotas to meet) with banks or savings and loan associations. My involvement with the mortgage lending process was mainly in providing PC and mini-computer systems and programming support as well as loan underwriting, closing and secondary market sales support. I was never directly involved with customers directly.

      However, I did work closely with the loan officers and still have contacts in the business. From my experience working and associating with mortgage loan officers, the primary way to get customers, then and now was develop relationships with realestate brokers in order to get referrals from them. In addition to this I know that loan officers, like other people in the sales area, actively participate in networking events, build networks with others, besides realestate brokers, such as insurance agents, who can also refer clients. In the refinance area many also resort to telephone solicitations (calling previous clients as well as cold calls) and direct mail to both previous clients and cold calls. Basically, it is all about sales.

    • profile image

      Marc 10 years ago

      Nice informative Hub, Chuck. I am involved with publishing information on home mortgages online. I was wondering since you said that your specialization as a loan officer involved sales, where do you find most of your home mortgage prospects? Is it mostly through real estate agents, or do all your leads come from them?

    • ychange profile image

      ychange 10 years ago

      Very good information. It is a pity that thay don't spend time with their clients after brokering a loan.

    • Chuck profile image

      Chuck Nugent 10 years ago from Tucson, Arizona

      Misha, Thanks for your comment. You are absolutely correct in that this is probably not a good time to become a loan officer, especially a mortgage loan officer. In addition to layoffs, many loan officers are paid all or mostly on commission. With housing sales already low and falling and lenders becoming very strict in approving loans there won't be many opportunities to earn commissions in the near future and the ones most likely to continue working and being paid in this industry will be those with the experience to know which potential applicants are likely to be approved and which will not as well as, and probably more important, those with extensive contacts who can refer the dwindling pool of borrowers to them.

      However, this downturn, like others in the past, will not last forever and the market for loans and loan officers will improve. Those who still want to get into the field should look for a job with a bank or other large lending organization in their loan servicing department, especially the collections division of that department. Not only are these jobs usually salary rather than commission based but they are also great positions in which to learn the business. When the market returns, and it will, such people will be in a position to fill loan officer positions as they quickly become available.

      Thanks again for visiting and for your comment. Chuck

    • Misha profile image

      Misha 10 years ago from DC Area

      Considering what is happening in the industry right now, I wouldn't want to enter it just yet. I would expect serious job cuts for a coming couple of years at least, and people with less experience are mosy vulnerable...

    • Chuck profile image

      Chuck Nugent 10 years ago from Tucson, Arizona

      Kelsea, thank you for visiting my hub and for your comment. The best way to become a loan officer is to get a job in a bank. If you have a college degree you can start as a management trainee and apply for the loan department where you will probably begin in an area like collections or loan servicing. If you don't have a degree you can apply for a job in a bank as a teller or entry level position in another department (although teller would probably be best as that is a customer service job with customer contact and customer service and dealing with customers is a big part of a loan officer's job.

      Whether you have a college degree or not, take advantage of the training the bank will offer (free but will have to be done on your own time) through the American Institute of Banking as this will both prepare you for loan officer and other positions in the organization (or another as you may want to continue looking for loan officer jobs outside as well) as well as show your current and potential future employers that you are a self-starter and have ambition. These are qualities they like in all employees especially in loan officer positions as you will be expected to go out and bring business in rather than simply waiting for customers to come in and apply for loans (finding customers is very critical in areas like mortgage banking and other specialty lending areas where your pay will be commission based). Good luck.

    • gpower2 profile image

      gpower2 10 years ago from Newport Beach

      Informative HUB. I have been in the mortgage business for a number of years and it can be challenging (especially these days.) It is also a very rewarding career in the way of helping people make sound financial decisions and advising them about one of the most important investments in their lives.

    • profile image

      kelsea 10 years ago

      I am just looking for some one to help me get started on how to be a loan officer and the different programs that are out there. I live in washington if you can answer any of these questions

    • profile image

      markion 10 years ago from London

      Informative Hub.. it does seem like a rewarding career but also seems as though it requires hard work!


    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: ""

    Show Details
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized. (Privacy Policy)
    CloudflareThis is used to quickly and efficiently deliver files such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the or domains, for performance and efficiency reasons. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisements has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)