An ensemble machine learning based bank loan approval predictions system with a smart application

Banks rely heavily on loans as a primary source of revenue; however, distinguishing deserving applicants who will reliably repay loans presents an ongoing challenge. Conventional selection processes often struggle to identify the most suitable candidates from a pool of loan applicants. In response to this challenge, we present an innovative machine learning (ML) based loan prediction system designed to identify qualified loan applicants autonomously. This comprehensive study encompasses data preprocessing, effective data balancing using SMOTE, and the implementation of diverse ML models, including Logistic Regression, Decision Tree, Random Forest, Extra Trees, Support Vector Machine, K-Nearest Neighbors, Gaussian Naive Bayes, AdaBoost, Gradient Boosting, and advanced deep learning models such as deep neural networks, recurrent neural networks, and long short-term memory models. The model's performance is rigorously assessed in terms of accuracy, recall, and F1ₛcore. Our experimental analysis reveals that the Extra Trees outperforms its counterparts. Furthermore, we successfully predict bank loan defaulters through an ensemble voting model, which includes the top three ML models, achieving a remarkable 0. 62% increase in accuracy compared to the Extra Trees. To facilitate user interaction, we have developed a user-friendly desktop-based application. Notably, our findings demonstrate that the voting-based ensemble model surpasses both individual ML models, including Extra Trees, and existing state-of-the-art approaches, achieving an impressive accuracy of 87. 26%. This innovative system has the potential to significantly streamline and enhance the efficiency of bank loan approval processes, ultimately benefiting both financial institutions and loan applicants alike.