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Loan Sanction Model
Loan Sanction Model for Lending Club
Course Project for Data Mining & Analysis for Managers
Team Members:
Jawad Abbas | Manan Amin | Maham Fatima | Akshay Seth
Outline
• Business Process
• Dataset
• Identifying Target Variable
• Deciding Data Format
• Identifying Explanatory Variable
• Acquire and Analyzing Data
• Transforming Data
• Mining
• Reviewing & Analyzing Data
• Questions
About Lending Club
• World’s largest online credit marketplace, facilitating
personal loans, business loans, and financing for elective
medical procedures.
• Borrowers access lower interest rate loans through a fast
and easy online or mobile interface.
Business Process
Data Set
• Data Set:
https://resources.lendingclub.com/LoanStats3d.csv.zip
• Dictionary Link:
https://resources.lendingclub.com/LCDataDictionary.xlsx
• Data Term: 2015
Identifying Target Variable
• Available Variables
Deciding Data Format
Identifying Explanatory Variable
• Selected 15 variables out of 111 available variables
Member id dti (debt income)
Emp length Credit debt
Home ownership Tot cur bal (total debt)
Annual inc Revol bal
Term Pub rec bankruptcies
Loan amount Tax liens
Int rate Pub rec
Acquire and Analyzing Data
• Filter data based on following rules,
• Employment Length != n/a
• Total Balance <= Credit Balance
• Got rid of outliers,
• High Annual Income
• Very Low DTI (Debt_Income)
Transforming Data
• For getting a better loan sanctioned model.
• Changed the letter Grades & Home_Ownership to binary
• Grade: A, B, C = 1
• Grade: D, E, F, G = 0
• Home_Ownership: “OWN” = 1
• Home_Ownership: ”MORTGAGE” = “RENT” = 0
Mining
• Data Input to Statistical Discovery Software by SAS (JMP)
• Built a Simple Linear Regression Model
Mining
• Initial Analysis
Mining
•RevisedAnalysis
Mining
• Results with Minimal Standard Error
Reviewing & Testing Model
• Tested Model with Testing Data
Thank You.

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Loan Sanction Model

  • 1. Loan Sanction Model Loan Sanction Model for Lending Club Course Project for Data Mining & Analysis for Managers Team Members: Jawad Abbas | Manan Amin | Maham Fatima | Akshay Seth
  • 2. Outline • Business Process • Dataset • Identifying Target Variable • Deciding Data Format • Identifying Explanatory Variable • Acquire and Analyzing Data • Transforming Data • Mining • Reviewing & Analyzing Data • Questions
  • 3. About Lending Club • World’s largest online credit marketplace, facilitating personal loans, business loans, and financing for elective medical procedures. • Borrowers access lower interest rate loans through a fast and easy online or mobile interface.
  • 5. Data Set • Data Set: https://resources.lendingclub.com/LoanStats3d.csv.zip • Dictionary Link: https://resources.lendingclub.com/LCDataDictionary.xlsx • Data Term: 2015
  • 6. Identifying Target Variable • Available Variables
  • 8. Identifying Explanatory Variable • Selected 15 variables out of 111 available variables Member id dti (debt income) Emp length Credit debt Home ownership Tot cur bal (total debt) Annual inc Revol bal Term Pub rec bankruptcies Loan amount Tax liens Int rate Pub rec
  • 9. Acquire and Analyzing Data • Filter data based on following rules, • Employment Length != n/a • Total Balance <= Credit Balance • Got rid of outliers, • High Annual Income • Very Low DTI (Debt_Income)
  • 10. Transforming Data • For getting a better loan sanctioned model. • Changed the letter Grades & Home_Ownership to binary • Grade: A, B, C = 1 • Grade: D, E, F, G = 0 • Home_Ownership: “OWN” = 1 • Home_Ownership: ”MORTGAGE” = “RENT” = 0
  • 11. Mining • Data Input to Statistical Discovery Software by SAS (JMP) • Built a Simple Linear Regression Model
  • 14. Mining • Results with Minimal Standard Error
  • 15. Reviewing & Testing Model • Tested Model with Testing Data

Editor's Notes

  1. Solid returns with historical returns  by Grade A-C of 5.26% to 8.69%.5
  2. Total 111 fields were there..