Loan Default Analysis

Loan default analysis involves examining the likelihood that a borrower will fail to repay a loan as agreed. This process evaluates various factors, including the borrower’s credit history, income, debt levels, and economic conditions. Lenders use this analysis to assess risks and decide whether to approve loans and at what interest rates. It helps them predict potential losses and identify borrowers who may struggle to meet their obligations, allowing for better management of lending practices and financial health. Understanding these risks is crucial for both lenders and borrowers in the loan process.