Predict Possible Loan Default Using Machine Learning

The Problem

With everyone from young students, entrepreneurs, and multi-million-dollar companies turning to banks to seek financial support, it is important that banks minimize the risk of loan default as much as possible. Higher number of loan defaults can lead to dire consequences including financial crisis. How can banks use emerging technologies to better predict possible loan default?

Solution

Kranium Machine Learning models can leverage vast volumes of historical default data to identify the likelihood of a loan default, much before the loan is even approved. The models will also be able to provide reasons as to why a particular loan application is considered risky. This will help banks to reduce the number of defaults and help in building a greater value for the loan portfolio and even help in saving additional expenses incurred in foreclosure or recovery.