Practical Data Science using Python - EDA Project - 7

The video tutorial explores the impact of various financial features on loan default ratios, focusing on Debt to Income (DTI) ratio, employment tenure, public records, total accounts, loan purposes, and interest rates. Through visualizations and data analysis, it identifies key insights and correlations, providing actionable information for Lending Club to address high default rates.

What does the DTI ratio represent in the context of loan analysis?

• The total amount of debt a borrower has

• The percentage of income used for debt repayment

• The total income of a borrower

• The number of loans a borrower has

What was concluded about the influence of DTI on default rates after further analysis?

• DTI has a strong influence on default rates

• DTI is the primary factor in default rates

• DTI has no influence on default rates

• DTI may not significantly influence default rates

How does employment tenure affect loan default rates?

• Longer tenure significantly increases default rates

• Shorter tenure significantly increases default rates

• Employment tenure has little impact on default rates

• Employment tenure is the main factor in default rates

What is the correlation between public bankruptcies and default rates?

• Correlation only for values of zero

• Positive correlation, especially for values of one and two

• Negative correlation

• No correlation

Which loan purpose category has a high default rate?

• Home improvement

• Debt consolidation

• Small business

• Medical expenses

What is a possible reason for the high default rate in small business loans?

• Low loan amounts

• High interest rates

• Short loan terms

• Low borrower income

How do interest rates correlate with loan amounts?

• Interest rates decrease as loan amounts increase

• Higher loan amounts have lower interest rates

• Higher loan amounts have higher interest rates

• Interest rates are constant across all loan amounts

What is the relationship between interest rates and default ratios?

• Interest rates are inversely proportional to default ratios

• Lower interest rates correlate with higher default ratios

• Higher interest rates correlate with higher default ratios

• Interest rates have no impact on default ratios

What was a key insight regarding annual income and default rates?

• Income has no impact on default rates

• Income is inversely related to default rates

• Lower income leads to higher default rates

• Higher income leads to higher default rates

What should Lending Club focus on to reduce default rates?

• Focusing only on employment tenure

• Reducing interest rates for high-risk categories

• Increasing loan amounts

• Ignoring public records