Loan Approval Models

Imagine you are employed at a financial institution that offers personal loans. A colleague has designed a model that analyzes customer data to decide if a loan should be approved. What type of model has your colleague created? Another colleague believes they have crafted a superior model for predicting loan defaults. Considering that personal loans require monthly repayments, how would you compare the performance of these two credit risk models over a specific period? Which metrics would you use to assess the effectiveness of the new model?