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 comprising:
- calculating, by the computer-based system for determining loan terms, a weighted expected probability of default for a loan to a 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 a customer credit application data and 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 on aggregate income movements of a population;
calculating, by the computer-based system, a risk free rate; and
determining, by the computer-based system, loan terms that are above the risk free rate,wherein said loan terms are based at least in part upon the weighted expected probability of default, a capital structure of a 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.
1 Citation
16 Claims
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1. A method comprising:
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calculating, by the computer-based system for determining loan terms, a weighted expected probability of default for a loan to a 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 a customer credit application data and 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 on aggregate income movements of a population; calculating, by the computer-based system, a risk free rate; and determining, by the computer-based system, loan terms that are above the risk free rate, wherein said loan terms are based at least in part upon the weighted expected probability of default, a capital structure of a lender, and funding rates available to the lender. - View Dependent Claims (2, 3, 4, 5, 6, 7, 8, 9)
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10. A system comprising:
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a processor for determining loan terms, a tangible, non-transitory memory communicating with the processor, the tangible, non-transitory memory having instructions stored thereon that, in response to execution by the processor, cause the processor to perform operations comprising; calculating, by the processor, a weighted expected probability of default for a loan to a 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 a customer credit application data and 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, loan terms that are above the risk free rate, wherein said loan terms are based at least in part upon the weighted expected probability of default, a capital structure of a lender, and funding rates available to the lender. - View Dependent Claims (11, 12, 13, 14, 15)
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16. An article of manufacture including a non-transitory, tangible computer readable storage medium having instructions stored thereon that, in response to execution by a computer-based system for determining loan terms, cause the computer-based system to perform operations comprising:
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calculating, by the computer-based system, a weighted expected probability of default for a loan to a 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 a customer credit application data and 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 on aggregate income movements of a population; calculating, by the computer-based system, a risk free rate; and determining, by the computer-based system, loan terms that are above the risk free rate, wherein said loan terms are based at least in part upon the weighted expected probability of default, a capital structure of a lender, and finding rates available to the lender.
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Specification