Loan Defaulting Analysis(2007-2016)

ABSTRACT

Analysis of Loan data from 2007-2016 to evaluate probable causes of failure to repay loans.

Analysis

Presentation

Codes: Jupyter Notebook

Summary

-Employment Length, Verification, and Application Type did not affect loan repayment.

-Purpose, Annual Income, Home Ownership, Number of Mortgage Accounts, Term Length, Issue Year, Grade, Number of Accounts Open, Interest Rate, DTI Revolving Balance affected loan repayment

Suggestions:

1. Purpose- Avoid clients that request for home improvement, medical, renewable energy, vacation, and debt.
2. Annual Income- Avoid clients who request loans with annual income of <50k- >=5k.
3. Home Ownership- Avoid clients who request loans to Rent lodging.
4. Mortgage Accounts- Avoid clients who had <30->=20 mortgage accounts
5. Term Length – Give out more 60 month loans
6. Issue Year- Not changeable.
7. Grade- Offer more to clients of Grade A status and less to C-G.
8. Open Accounts- Monitor more on accounts <10-<20 and <50-40 accounts.
9. Interest Rate- Lower interest rate.
10. Revolving Balance- Avoid people with range of <1k-<10k range revolving balance.
11. DTI- market to people with DTI >=50% and avoid people with DTI of <5-<10.