Explore the retail loan officer compensation plan to discover how it works, benefits, and what you can earn as a loan officer. Unlock your financial potential
Introduction
A retail loan officer career has certainly caught your interest, right? Excellent. It is one of the best fields you can pursue. It is not every day that you get to impact an individual’s life and make a living out of it. A quick note of caution, though before you jump on to loan applications and go as far as spreadsheets, we first need to discuss the retail loan officer compensation structure. Remember, understanding the compensation framework is as critical as learning about the loan products offered. A dusty old financial document? No It is more of a plan towards sustainable fiscal independence or at best, a nice little travel fund.
Let us analyse this compensation structure. Most plans offer more than one possibility of achieving ‘salary or happiness’ as most of them don’t follow the “ifthen” frameworks. Varying levels of complexities can be bewildering. Imagine the following scenario a delicious, multistoried cake
The Base Layer Salary
Your paycheques tell a different story, but this is the layer I stand firmly behind. It provides cost of living security, increases gradually based on seniority of the officer, pays the mortgage, etc. It is the spring board from which you can launch your life and the income level you strive to earn. In this industry, your base salary is reported to differ significantly based on your prior work experience, geographic location, and specific employer. It is seemingly the “guaranteed” element of your revenue, however, “guaranteed” can in fact, be rather misleading in sales.
The Creamy Middle Commissions, The Sweet Topping Bonuses Together constitute about 70% of the order.
Commissions
Now, this is rather interesting . Commissions are usually tied to the volume of loans you close. The more you close, the more you earn.
Alas, the commission structure can vary. There are some lenders who might give a flat percentage per loan while others have a tiered system that rewards you progressively for larger loans or specific types of loans. It’s a bit like a video game hit your targets and level up
Bonuses
“Bonuses” are the most pleasant reward, fundamentally. These aren’t baked into the overall salary and add up as long as specific organisational targets are met.
They can stem from overall performance, hitting or exceeding a target, selling select products, team achievements, or skirt anything individually determined. A performance based treat, if you will.
These become highly valuable but, as is the case, they tend to hinge on clear cut goals that need to be reached before the pampering begins.
The Hidden Ingredients Benefits
Valuepacked bonuses are often overlooked although this is the exact reason they come nominated.
Before bidding, do not ignore health insurance, retirement plans, paid time off piecing together the value of all these translates to your total compensation package.
Not all retail loan officer compensation plans are created equal, and this is where things get really fascinating. Some companies compensate with a lower base salary while offering higher commission opportunities, while others offer a balanced approach. We recommend gathering all the possible information, then thinking about your risk appetite paired with your financial goals. Would you prefer a set income, or are you okay with life cycle uncertainty as a result of a commission heavy approach? Would you prefer guaranteed moderate earnings or the chance to strike it rich if you exceed targets?
Let us keep in consideration the other important factor, the quality of the leads. Even the most compelling commission offer is of little to no help if the leads you receive are stale. Before putting pen to paper, make sure the company commits to providing adequate support and high quality leads.
Evaluation of the retail loan officer compensation plan involves more than just computations. It requires you to think about your career progression and your financial well being. In retail lending, understanding the intricacies of base salary, commission, bonuses, and benefits can seem a little confusing, but breaks down into something manageable that you can understand. Remember, it is not always about the earnings rather, it is about a compensation plan that helps achieve your goals and objectives both personally and professionally. So, grab your spreadsheet you’re a loan officer, after all and start calculating and analysing those figures
