Loan Eligibility Classification Using Machine Learning Approach

Machine learning is becoming increasingly vital in various domains, including loan eligibility classification, due to its ability to analyze large amounts of data, develop predictive models, adapt to new information, and automate processes. This research paper presents a study on loan eligibility cl...

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Bibliographic Details
Main Author: Law, Paul Lik Pao
Format: Undergraduates Project Papers
Language:English
Published: 2023
Subjects:
Online Access:http://umpir.ump.edu.my/id/eprint/40844/1/CB20025.pdf
http://umpir.ump.edu.my/id/eprint/40844/
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Summary:Machine learning is becoming increasingly vital in various domains, including loan eligibility classification, due to its ability to analyze large amounts of data, develop predictive models, adapt to new information, and automate processes. This research paper presents a study on loan eligibility classification using a machine learning approach by comparing the performance of three Machine Learning algorithms which were Logistic Regression, Random Forest, and Decision Tree. This research was conducted using Python and Jupyter Notebook for data analysis and model development. The models were then evaluated on the testing set using evaluation metrics such as Accuracy, Precision, Recall, And F1-Score. The performance of the models was compared to identify the most effective algorithm for loan eligibility classification. Among the three ML approach, the LR model appears to be the most effective at classify loan eligibility, with the 82% accuracy score, 82% recall score, 81% precision score and 79% F1 score.