Bank Loan Case Study

 

Company that specializes in lending various types of loans to urban customers. Your company faces a challenge: some customers who don't have a sufficient credit history take advantage of this and default on their loans. 

When a customer applies for a loan, your company faces two risks:

If the applicant can repay the loan but is not approved, the company loses business.

If the applicant cannot repay the loan and is approved, the company faces a financial loss.

When a customer applies for a loan, there are four possible outcomes:

Approved: The company has approved the loan application.

Cancelled: The customer cancelled the application during the approval process.

Refused: The company rejected the loan.

Unused Offer: The loan was approved but the customer did not use it.

Business objectives 

The main aim of this project is to identify patterns that indicate if a customer will have difficulty paying their installments. This information can be used to make decisions such as denying the loan, reducing the amount of loan, or lending at a higher interest rate to risky applicants. The company wants to understand the key factors behind loan default so it can make better decisions about loan approval.

For project click here