How to Become a Loan Officer: Education and Career Roadmap

Oct 28, 2019

Find out how to become a loan officer. Research the education and training requirements and learn about the experience you need to advance your career as a loan officer.

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Loan Officer Career Highlights

A loan officer assists customers with loan applications for cars, college tuition, and homes. They help determine the appropriate loans for customers and make them aware of the requirements and stipulations. These professionals can specialize in consumer, mortgage, or commercial loans and often work for banks, mortgage companies, or credit unions. Some loan officers travel to meet with clients in their businesses or homes. The table below provides a quick overview of the profession:

Degree Level High school diploma or equivalent; bachelor's often preferred
Degree Field(s) Finance, economics, business, or related field
License/Certification Licensure required; voluntary certifications available
Experience 2-5 years
Key Skills Good communication, interpersonal, and decision-making skills; knowledge of mortgage, loan, and financial institution policy and procedures
Loan Officer Salary (2018) $76,270

Source: U.S. Bureau of Labor Statistics

How to Become a Loan Officer: 5 Steps

Some employers will require you to have a bachelor's degree in finance, economics, business, or another related field; but the minimum requirement is simply a high school diploma or equivalent. Licensure is required for mortgage loan officers and there are certification options, but they are voluntary.

The required experience varies, but two to five years' experience is often preferred. You'll also need good communication, interpersonal, and decision-making skills along with knowledge of mortgage, loan, and financial institution policy and procedures. Here are five steps that detail the traditional path to become a loan officer:

Step 1: Earn a Bachelor's Degree

Although loan officers need at least a high school diploma, advanced positions such as commercial loan officers will require a bachelor's degree in business, economics, finance, or other related fields. Pursuing a degree in one of these fields can prepare a commercial loan officer for analyzing the finances of a business, reading financial statements, and understanding the principles of business accounting. Coursework for these programs typically includes accounting, mathematics, finance, economic statistics, and business statistics.

Since loan officers must be able to clearly answer any questions customers may have and guide them through the loan application process, excellent interpersonal and communication skills are needed to be successful in this position. While in school, you can take advantage of courses in communications, public speaking, and psychology.

Step 2: Gain the Necessary Work Experience

For many employers, previous experience is highly preferred. This is especially true for individuals who do not have a bachelor's degree and are seeking employment out of high school. Aspiring loan officers can establish themselves in the field by seeking employment in a variety of settings, including customer service, banking, and sales.

Step 3: Complete On-The-Job-Training

Participating in on-the-job-training is a requirement, regardless of what degree a loan officer has. The type of training received can vary depending on the work setting and may include a combination of informal training and company-sponsored training. Some training with specific software may be included as well, particularly for those involved in mortgage underwriting.

Step 4: Obtain a Mortgage Loan Officer License

All mortgage loan officers must be licensed as a mortgage loan originator (MLO). This process involves completing 20 hours of required coursework, passing an exam and a credit and background check. The MLO exam contains a national component and a state component that is unique for each state.

Completion of continuing education credits is needed to maintain an MLO license, which must be renewed on a yearly basis. This typically requires the completion of eight hours of continuing education courses each year. Other requirements may vary by state.

Step 5: Become Certified

Although certification is not a requirement for loan officers, obtaining certification may improve employment prospects. The Mortgage Bankers Association (MBA) and the American Bankers Association (ABA) offer opportunities for becoming certified. A few certifications offered by the ABA include:

  • Certified Financial Marketing Professional (CFMP)
  • Certified Lender Business Banker (CLBB)
  • Certified Trust and Financial Advisor (CTFA)

The MBA offers a variety of certification options for mortgage bankers, including commercial, residential, executive, and master. These credentials require a minimum amount of work experience, successful completion of an examination, and the completion of continuing education courses.

Certifications offered by the ABA are usually renewed every three years. The renewal process will vary and may include completing continuing education credits, paying an annual fee, and adhering to the Institute of Certified Bankers' Professional Code of Ethics. CMB designations offered by the MBA must be renewed every two years. Earning five points of continuing education activities is required to maintain certification. This can be accomplished by completing coursework offered by the MBA, participating on committees, or attending conferences and conventions.

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