Loan Officer Career Profile

A Loan Officer (LO) is a person who helps customers apply for loan products and monitors the processing until it is closed. In the current market environment, anyone who wants to start a business, buy a car, home, pay for higher education, etc., needs to seek financing from a financial institution. This is where a LO comes into play.

LOs directly represent the lending institution and they are not freelance brokers. They do this by collecting personal data about the clients and/or businesses. The point is to verify the background of the potential clients or businesses to help financial institutions determine credit worthiness of the applying client. LOs also help to fulfill the borrowing requirements and give guidance on loan approval. LOs offer advice to the clients coinciding with the qualifying issues during the loan processing.

LO Duties:

  • A loan officer is the middle man between the person who seeks a loan and the loan provider. Their aim is to help the loan seeker by getting them the required financing and also provide a profitable return to the loan provider.
  • Representing their financial institutions in a sales capacity. They also help the lenders collect the payments from the customers who are in a delinquent loan status.
  • Locates potential clients and advises them about a suitable loan product and what it entails.
  • Assists the customers in completing loan applications, providing the list of required documents and informing the clients on their loan approval status; were they approved or disapproved?
  • Evaluates the credit worthiness of the clients and makes recommendations to their employer or other related financial institutions. This sometimes also includes the underwriting duties if the LO works inside a bank.

Nature of Work

LOs can spend a lot of time with their prospective clients, so their in-office presence can be very limited. Their client base can be quite vast, depending on how many sectors like commercial, consumer or mortgage loans they work in. They usually work 40 hours a week and should have their own vehicle, laptop and mobile phone. A LO is generally an entry-level career move. So a bachelor’s degree in finance, economics or a related field is suitable for this position.


Income often fluctuates, depending on the number of loans generated. But the average annual earnings a LO makes is about $51,760 in 2006. In this depressed climate, however, the income can be $20,000 to $30,000 per year.

Job Prospects

LOs have opportunities in commercial banks, saving institutions, credit unions and other related financial institutions. They have employment vacancies in urban and sub-urban areas throughout the nation. As an increasing amount of banks are trying to woo the customers by providing loans, there is a great demand for loan officers. The increase in the number of LO jobs is predicted by Bureau of Labor statistics to rise 11% from 2006 to 2016. But of course the growth can be affected by online mortgages and loan underwriting software.

Career Development

After gaining enough experience, if the LO is capable, they can transfer to larger firms or to managerial positions. Most of them succeed in becoming the supervisors of other LOs and clerical staff.