Default Prediction

Default prediction refers to the process of assessing the likelihood that a borrower will fail to repay a loan or meet other financial obligations. Financial institutions and analysts use various data, including credit histories, income levels, and economic trends, to estimate this risk. Accurately predicting defaults helps lenders make informed decisions about who to lend to and under what terms, ultimately reducing the potential for financial losses. By understanding these risks, both lenders and borrowers can engage in more responsible lending and borrowing practices.