Loan Default Prediction

Loan default prediction involves using data and analytics to estimate the likelihood that a borrower will fail to repay a loan. Financial institutions analyze factors like credit history, income, employment stability, and loan details to identify patterns associated with missed payments. This helps lenders make informed decisions about approving loans, setting interest rates, and managing risk. Accurately predicting defaults can reduce losses, improve lending efficiency, and ensure responsible lending practices. Essentially, it’s a way of forecasting potential payment problems before they happen, so lenders can take steps to mitigate that risk.