Are you interested in the financial field? Do you have impressive customer service skills? Are you a detail-oriented person who likes to help others with their goals? If so, why not become a loan officer? It would be a fitting career option for you. As a loan officer, you are expected to focus on sales goals. Plus, you also need to act as a consultant for business or individual customers. If the role sounds like your cup of tea, we think this is the career path for you.
You would now want to know how much you can make as a loan officer. Through this post, you will find out the answers to that and more. We hope to discuss the salary of a loan officer, the job responsibilities in detail, and the qualifications required to be kind of officer. By the end of this post, you can decide for yourself whether you should be a loan officer. So keep on reading.
Job responsibilities of a loan officer
A loan officer is a financial professional who is the first point of contact for borrowers who plan on requesting a loan. It could be from a credit union, a bank, or any other lending institution. The loan officer has to analyze and prepare loan applications to get approval. Since they originate the acceptance process, loan officers are also known as loan originators. They work for financial institutions to figure out the perfect solution from a variety of lending products for individual and business clients.
Other than reviewing eligibility for funding, loan officers also provide knowledge to borrowers and applicants about what they need to know about borrowing money. Plus, loan officers’ consultation and expert opinions are valuable for clients to understand the process. The products loan officers work with may include personal and business loans, lines of credit, and mortgages.
If you plan on becoming a loan officer, then remember that you should have the qualities of a lending professional. We listed them below for you:
- You should be knowledgeable and trained in the various lending products offered.
- You should have the knowledge and a clear understanding of regulatory guidelines for the company policies, the financial/banking industry, and necessary paperwork.
- Today, the minimum qualification to become a loan professional is a bachelor’s degree in the finance sector. Other than that, we suggest obtaining additional credentials as well.
Do loan officers make a commission?
In general, a loan officer’s income depends mostly on 2 factors. They include:
- Whether their employer pays a flat salary.
- It has a commission-based structure in place.
As you know, it is a sales-based role. So the most common way is that you can make more commissions in situations in which you are generating your own leads, which are yours. In that case, the difference can range from 0.2% to 2% of the whole loan amount. Remember that it again depends on the employer’s decision. Apart from that, most of the time, loan officers receive incentives for being able to meet specific thresholds or sell products as well.
What is the average salary of a loan officer?
In general, the national average salary of a loan officer is $80,818 per year. However, sometimes salaries can range from $14,000 to $240,000 per year as well.
Usually, loan officers get paid a salary or hourly rate, while some receive commissions and incentives on top of a lower base salary. Keep in mind that wage structures differ according to the employer. Also, the loan officer’s job performance matters, which refers to how many loans the loan officer manages to close. Apart from that, a few more factors also contribute, which are listed below:
Your educational level
As we mentioned earlier, the minimum education qualification expected of a loan officer is to hold a bachelor’s degree in economics or finance. Most employers prefer a master’s degree as well.
Your Credentials
Loan officers are expected to hold special credentials to handle certain types of loans. One such requirement is a mortgage loan originator license (MLO). You need to successfully complete specific coursework and exams to earn the license. Other than that, you are expected to maintain a clean background and credit check. You also need to renew these credentials yearly.
Your Experience
You can expect a larger salary with more industry experience. With more experience, you can either get an annual salary increase or manage to close more frequent and larger commission-based products. Another benefit you can earn as your experience in the industry mounts is getting offers for higher-paying roles.
The employer you work for
Understandably, the biggest institutions can usually afford higher budgets to offer higher salaries to loan officers. By offering higher salaries, they seek to hire the most qualified and most experienced candidates to work in the important roles within their institution.
Which state do you live in?
Your salary can vary according to the state you are located in. Some parts of the U.S. offer higher salaries considering the higher cost of living in those states. Accordingly, you can already guess which states offer the highest salaries. They include California, New York, and Mississippi. On the other hand, some of the lowest payments are offered in states such as Hawaii, South Dakota, and Louisiana.
Should you be a loan officer?
Ultimately, it is your choice. You have to be sure whether this is the perfect career choice for you before deciding. If you have the necessary qualifications, credentials, and interest in the job responsibilities, becoming a loan officer is the right choice for you. If you plan on becoming a loan officer, you can expect it to be a very promising career path. This job role is said to trend upwards for the next several years. You can expect to find more job opportunities as a loan officer.
Wrapping up
There you have it! Now you know everything about the loan officer’s occupation. You have got to learn the skills and qualifications required to be one, your job responsibilities, and how much loan officers make. Now that you know everything, it is up to you to decide if you want to choose this career path. It is a safe and reliable career path and is expected to trend upwards within the next few years, which is a good sign.