Systems, methods and computer program products for offering consumer loans having customized terms for each customer

• US 20020123960A1
• Filed: 10/05/2001
• Published: 09/05/2002
• Est. Priority Date: 10/05/2000
• Status: Active Grant

• Current Assignee: Liberty Peak Ventures, LLC (Dominion Harbor Enterprises, LLC)
• Original Assignee: American Express Company
• Inventors: Ericksen, Brian
• Granted Patent: US 8,190,511 B2
• Time in Patent Office: Days
• US Class Current: 705/38
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/02 Banking, e.g. interest calculation or account maintenance credit or loans G06Q40/03
• CPC Class Codes: G06Q 40/03 Credit; Loans; Processing thereof

Abstract

Systems, methods and computer program products take into account the amount, term, and type of consumer loan, as well as data relating to a customer'"'"'s credit score, debt burden, and collateral, if any. The invention then calculates an expected probability of default for a loan to that customer, and calculate loan terms that will deliver a minimum return on equity (e.g., 18%) given the lender'"'"'s capital structure and funding rates. These loan terms are then offered to the customer. The customized loan terms include annual percentage rate of the loan, or a yearly fee or loan amount.

Claims

1. A method for determining individually customized loan terms for a customer, comprising:

accepting customer credit application data corresponding to the customer;

accessing credit bureau data corresponding to the customer, wherein the credit bureau data contains a credit rating for the customer;

calculating an expected probability of default for a loan to the customer based at least in part upon the customer credit application data and the credit bureau data;

determining customized loan terms that deliver a minimum return on equity for a lender, based at least in part upon a measurement of likelihood that the customer will default on a loan, the lender'"'"'s capital structure, and funding rates available to the lender.

2. The method of claim 1, wherein determining customized loan terms comprises determining a required return on capital for the lender and calculating a required return on risk-adjusted assets (RORAA) for the lender.

3. The method of claim 1, wherein accessing credit bureau data corresponding to the customer comprises receiving credit bureau data representing the likelihood for the customer to default on a loan.

4. The method of claim 1, wherein determining customized loan terms that deliver a minimum return on equity for a lender comprises determining customized loan terms for an unsecured loan to the customer.

5. The method of claim 1, wherein calculating an expected probability of default for a loan to the customer is based at least in part upon the customer'"'"'s risk from debt burden.

6. The method of claim 1, wherein determining customized loan terms comprises determining customized loan terms based at least in part upon overhead incurred by the lender.

7. A system for offering a customer loan terms individually customized for the customer, comprising:

a custom loan manager accessible by the customer via a computer; and

at least one credit bureau in communication with the custom loan manager, wherein the custom loan manager includes processing instructions for;

accepting customer credit application data corresponding to the customer;

accessing credit bureau data corresponding to the customer;

calculating an expected probability of default for a loan to the customer based at least in part upon the customer credit application data and the credit bureau data, and

determining customized loan terms that deliver a minimum return on equity for the lender, based at least in part upon a measurement of likelihood that the customer will default on a loan, the lender'"'"'s capital structure, and funding rates available to the lender.

8. The system of claim 7, further comprising at least one customer computer in communication with the custom loan manager via the Internet.

9. The system of claim 7, further comprising at least one lender computer in communication with the at least one custom loan manager.

10. A computer program product for use with a data processing system for determining customized loan terms for a customer, said computer program product comprising:

a computer usable medium having computer-readable code means embodied in said medium, said computer-readable code means comprising;

computer-readable code means for calculating an expected probability of default for a loan to the customer based at least in part upon customer credit application data received from the customer and credit bureau data associated with the customer and received from a credit bureau; and

computer-readable code means for determining customized loan terms that deliver a minimum return on equity for a lender, based at least in part upon a measurement of likelihood that the customer will default on a loan, the lender'"'"'s capital structure, and funding rates available to the lender.

11. The computer program product of claim 10, wherein the computer-readable code means for determining customized loan terms comprise computer-readable code means for calculating a required return on risk-adjusted assets (RORAA) for the lender.

12. The computer program product of claim 10, wherein computer-readable code means for calculating an expected probability of default for a loan comprises computer-readable code means for calculating an expected probability of default for a loan to the customer based at least in part upon credit bureau data representing the likelihood for the customer to default on a loan.

13. The computer program product of claim 10, wherein the computer-readable code means for determining customized loan terms comprise computer-readable code means for determining customized loan terms for an unsecured loan to the customer.

14. The computer program product of claim 10, wherein the computer-readable code means for determining customized loan terms that deliver a minimum return on equity for a lender comprise computer-readable code means for determining customized loan terms that deliver a minimum return on equity for a lender based at least in part upon calculating an expected probability of default for a loan to the customer is based at least in part upon the customer'"'"'s risk from debt burden.