A study on predicting loan default based on the random forest algorithm

Recently, with the advance of electronic commerce and big data technology, P2P online lending platforms have brought opportunities to businessmen, but at the same time, they are also faced with the risk of user loan default, which is related to the sustainable and healthy development of platforms. Therefore, based on the Random Forest algorithm, this paper builds a loan default prediction model in view of the real-world user loan data on Lending Club. The SMOTE method is adopted to cope with the problem of imbalance class in the dataset, and then a series of operations such as data cleaning and dimensionality reduction are carried out. The experimental results show that: Random Forest algorithm outperforms than logistic regression, decision tree and other machine learning algorithms in predicting default samples.