Systems, methods and computer program products for offering consumer loans having customized terms for each customer
First Claim
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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 a weighted expected probability of default for a loan to the customer based at least in part upon weighting a first expected probability of default and a second expected probability of default, wherein each the first expected probability and the second expected probability are based on the customer credit application data and the credit bureau data;
calculating a risk from debt burden of the customer based at least in part upon a volatility of income determined from government statistics on aggregate income movements of a populationcalculating a risk free rate; and
determining customized loan terms that are above the risk free rate,wherein said customized loan terms deliver a predetermined minimum return on equity for a lender, and said customized loan terms are based at least in part upon the weighted expected probability of default, a capital structure of the lender, and funding rates available to the lender.
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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.
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Citations
14 Claims
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1. A method for determining individually customized loan terms for a customer, comprising:
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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 a weighted expected probability of default for a loan to the customer based at least in part upon weighting a first expected probability of default and a second expected probability of default, wherein each the first expected probability and the second expected probability are based on the customer credit application data and the credit bureau data; calculating a risk from debt burden of the customer based at least in part upon a volatility of income determined from government statistics on aggregate income movements of a population calculating a risk free rate; and determining customized loan terms that are above the risk free rate, wherein said customized loan terms deliver a predetermined minimum return on equity for a lender, and said customized loan terms are based at least in part upon the weighted expected probability of default, a capital structure of the lender, and funding rates available to the lender. - View Dependent Claims (2, 3, 4, 5, 6)
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7. A system comprising a processor,
a tangible, non-transitory memory communicating with a processor for determining individually customized loan terms for a customer, the tangible, non-transitory memory having instructions stored thereon that, in response to execution by the processor, cause the processor to perform operations comprising: -
communicating, by the processor, with a credit bureau over an electronic communication medium;
communicating with a customer computer;receiving, by the processor and from the customer computer, customer credit application data corresponding to a customer; accessing, by the processor and from the credit bureau over the electronic communication medium, credit bureau data corresponding to the customer; calculating, by the processor, a weighted expected probability of default for a loan to the customer based at least in part upon weighting a first expected probability of default and a second expected probability of default, wherein each the first expected probability and the second expected probability are based on the customer credit application data and the credit bureau data; calculating, by the processor, a risk from debt burden of the customer based at least in part upon a volatility of income determined from government statistics on aggregate income movements of a population, calculating, by the processor, a risk free rate; and determining, by the processor, customized loan terms that are above the risk free rate, wherein said customized loan terms deliver a predetermined minimum return on equity for a lender, and said customized loan terms are based at least in part upon the weighted expected probability of default, a capital structure of the lender, and funding rates available to the lender. - View Dependent Claims (8, 9)
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10. An article of manufacture including a non-transitory, tangible computer readable medium having instructions stored thereon that, in response to execution by a computer-based system for determining individually customized loan terms for a customer, cause the computer-based system to perform operations comprising:
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accepting, by the computer-based system, customer credit application data corresponding to the customer; accessing, by the computer-based system, credit bureau data corresponding to the customer, wherein the credit bureau data contains a credit rating for the customer; calculating, by the computer-based system, a weighted expected probability of default for a loan to the customer based at least in part upon weighting a first expected probability of default and a second expected probability of default, wherein each the first expected probability and the second expected probability are based on the customer credit application data and the credit bureau data; calculating, by the computer-based system, a risk from debt burden of the customer based at least in part upon a volatility of income determined from government statistics of aggregate income movements of a population; calculating, by the processor, a risk free rate; and determining, by the computer-based system, customized loan terms that are above the risk free rate, wherein said customized loan terms deliver a predetermined minimum return on equity for a lender, and said customized loan terms are based at least in part upon the weighted expected probability of default, a capital structure of the lender, and funding rates available to the lender. - View Dependent Claims (11, 12, 13, 14)
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Specification