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Loan Eligibility Prediction: Machine Learning

This document discusses building a machine learning model to predict loan eligibility using Python libraries like Pandas and scikit-learn. It describes using logistic regression, decision trees, and random forests on loan application data to classify applicants as eligible or not eligible for loans. Finally, it discusses automating the loan eligibility process for a finance company using features from customer applications to identify eligible segments.

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Jeet Maru
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4K views8 pages

Loan Eligibility Prediction: Machine Learning

This document discusses building a machine learning model to predict loan eligibility using Python libraries like Pandas and scikit-learn. It describes using logistic regression, decision trees, and random forests on loan application data to classify applicants as eligible or not eligible for loans. Finally, it discusses automating the loan eligibility process for a finance company using features from customer applications to identify eligible segments.

Uploaded by

Jeet Maru
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Loan Eligibility Prediction

Machine Learning

Ronak Jangid – IU1841230019


Jaykumar Chavda – IU1841230020
Jeet Maru – IU1841230029
Introduction

 Loans are the core business of banks. The main profit comes directly from the loan’s
interest. The loan companies grant a loan after an intensive process of verification and
validation.

 However, they still don’t have assurance if the applicant is able to repay the loan with
no difficulties. In this tutorial, we’ll build a predictive model to predict if an applicant
is able to repay the lending company or not. We will prepare the data using Jupyter
Notebook and use various models to predict the target variable.
Language

We will be using Python for this course along with the below-listed libraries.

 Python

 Pandas

 Seaborn

 sklearn
Data

For this problem, we have three CSV files: train, test, and sample submission.

 Train file will be used for training the model, i.e. our model will learn from this file. It
contains all the independent variables and the target variable.

 Test file contains all the independent variables, but not the target variable. We will
apply the model to predict the target variable for the test data.

 Sample submission file contains the format in which we have to submit out predictions
Model Building

 Logistic Regression: Logistic Regression is a classification algorithm. It is used to


predict a binary outcome (1 / 0, Yes / No, True / False) given a set of independent
variables.

 Decision Tree: Decision tree is a type of supervised learning algorithm that is mostly


used in classification problems. Decision trees use multiple algorithms to decide to split
a node into two or more sub-nodes. The creation of sub-nodes increases the
homogeneity of resultant sub-nodes.

 Random Forest: RandomForest is a tree-based bootstrapping algorithm wherein a


certain no. of weak decision trees are combined to make a powerful prediction model.
Applications
 Finance company deals in all loans. They have presence across all urban, semi

urban and rural areas. Customer first apply for a loan after that company validates

the customer eligibility for loan.

 The Company wants to automate the loan eligibility process (real time) based on

customer detail provided while filling online application form. These details are

Gender, Marital Status, Education, Number of Dependents, Income, Loan Amount,

Credit History and others. To automate this process, they have given a problem to

identify the customers segments, those are eligible for loan amount so that they can

specifically target these customers.


Conclusion

 In this project We’ve gone through a good portion of the data science pipe such as
preprocessing and modeling and we’ve used essential classification models such as
Logistic regression , Decision tree and Random forests.

 It includes mathematical techniques and processes that are applied to historical data to
study correlations, identify trends and predict possible outcomes by quantifying the
uncertainty and the characteristics of the variation.

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