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Business Problem: Solution Approach

The bank wants to build a model to determine variable interest rates for people using machine learning on collected data including amount requested, funded amount, interest rate, loan length, purpose, debt ratio, income, credit history and employment length to predict the interest rate.

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alok pratap singh
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26 views

Business Problem: Solution Approach

The bank wants to build a model to determine variable interest rates for people using machine learning on collected data including amount requested, funded amount, interest rate, loan length, purpose, debt ratio, income, credit history and employment length to predict the interest rate.

Uploaded by

alok pratap singh
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Business Problem

The bank want to build a model such that bank can give a variable rate of intrest to some people.
This model will be implemented on bulk but bank done a proof of concept and collected data for
some people. Now using this data we have to build a machine learning model which can help us
to predict the Interest Rate.

Now we are having data for many variables such as Amount Requested,Amount Funded By
Investors,Interest Rate,Loan Length,Loan Purpose,Debt To Income Ratio,Home
Ownership,Monthly Income,Open CREDIT Lines,Revolving CREDIT Balance,Inquiries in the
Last 6 Months,Employment Length.

Now we have to use this information to make prediction on what should be the Interest Rate

The task now is to predict such a loan rate given the data.

Have you ever thought you get a different interest rate than your friend when you borrow
personal loan.

Solution Approach:
As we need to Interest Rate, which is continuous in nature, Linear Regression can be used for
prediction

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