Chad is a DUUUUUUMB Banker #superdumb
What directions can we take to make a bank money? -Reduce risk or increase profit? -Risk = Giving Loan to someone that can't pay it -Interest rate calculating for interest rate due to FICO Score -Shopping around with multiple banks and trying to get the best interest rate -More Profit goes up, the more risk goes up
-Difference between banks is how much they loan somebody and at what interest rate
We want to minimize interest rate, while still making an acceptable profit and accounting for risk
When people think about profit, they also think about the market rate
Look at Market Rate and establish a threshold for them not to go below
Pitch: Here is the interest rate that we recommend based on client
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Predictive Model of Interest Rate based on the x inputs (how much was the loan, loan years, credit score) -Evaluate how good that model is with R^2 & MSE & Residual Plot -Total Interest over Loan Term
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What is the best Model? (Maybe we shouldn't take into account an x variable?) -Correlation Chart: Choose x variables that have the highest correlation to do another model?
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Can we create an if statement to compare against minimum monthly income?
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How to show money made? -Sum of each credit score range -> What credit score ranges are bringing in the most money? -Some banks want higher ROI vs. some want it faster -