Purpose
To analyze default risk patterns and loan performance characteristics within an unsecured personal loan portfolio.
Objective
Identify critical risk inflection points and borrower stress patterns across credit segments and rate environments.
Process
Applied Kaplan-Meier survival estimation with censoring adjustments to 4,591 loans spanning 2021-2025, conducted risk segmentation by credit score and interest rate environment, implemented Nelson-Aalen cumulative hazard modeling, and developed comprehensive credit risk heatmap analysis to identify portfolio concentration risks and default timing patterns.
Output
The survival analysis identified a critical 24-30 month default inflection point and revealed that elevated rate environments accelerate default timing from 30+ months to 18-24 months. Credit risk segmentation demonstrated a 14.1 percentage point spread between highest-risk(17.3% default rate) and lowest-risk (3.2% default rate) borrowers. The analysis produced a three-pillar risk management framework including dynamic portfolio concentration limits, risk-adjusted underwriting standards, and early warning detection systems that enable continued growth through appropriate risk pricing and proactive intervention strategies.
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