Question

Imagine that you and your classmates are a research team developing an improved process for evaluating loan applicants for automobile purchases. The goal of the research is to predict which applicants will become delinquent or for
feit their loan. Those who score well on the application will be accepted, and those who score exceptionally well will be considered for lower-rate loans. Prepare a brief report for your instructor addressing these questions:

a. What data do you need for each loan applicant?

b. What data might you need that is not typically requested on a loan application form?

c. Where might you get this data?

Answer 1

In order to evaluate the loan as mentioned in the case above. Following are the detailed answer to the question:

a. What data do you need for each loan applicant?

Applicant's earlier Credit rating record,

His earlier loan defaults if any or honouring pattern of the EMI

His financial background.

Regular Source of income

Credibility of the applicant

KYC (Know your customer) documents such as Identity card, Tax identification number, Address proof etc

Last three years Income tax returns copies

b. What data might you need that is not typically requested on a loan application form?

Certificate of last closed loans or settled loans if any

Credibility reports from credit rating agencies

Family background as it will impact someones honesty and credibility to honour the dues

c. Where might you get this data?

Government portal such as credit rating agencies portal.

Income tax department

Banks confirmation for earlier loans

From applicant himself or herself