Question

Which dti bucket had the highest and lowest grouping for this rejected loans dataset?

Answer 1

The DTI bucket had the highest number of rejected loans whose debt was greater than 20% of their income and lowest when debt is less than 10% of their income.

There are three factors to be checked upon before the Lending Club will grant us loans. The first factor is the debt-to-income ratios, the second one is the length of employment and the third factor is the credit score. The Lending Club collects all this information before granting a loan and then checks them before granting the loan.

We can use the Pivot table that is available to make the comparisons. According to the debt-to-income ratios, the person whose loan was more than 20% of income was the highest as maybe the person granting the loans will not feel secure even and so this was the factor for rejected loans. Security is one of the main factors as the person needs to feel secure that he will get back his money.

The lowest rejects were the ones whose people loan asked was less than 10% of their incomes. In such cases, the person giving the loan may feel secure that he may get back his money. The length of employment is also another important factor as long as the person has worked for some years the lender can be assured that from his income he may get back the loan amount. The third factor being the higher the credit score more the chances of the person getting the loan.

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