<![CDATA[In the banking sector, loans have become a key component that steers the economy, encourages company expansion, and directly impacts the growth of a nation's economy. Banks must evaluate borrowers' ability to repay loans given the inherent risks involved in order to reduce the likelihood of default. In particular, machine learning (ML) has shown promise as a revolutionary tool for loan default prediction using advanced methodologies to examine historical data relating to customer behavior, this study investigates the application of machine learning (ML) in forecasting loan outcomes. The results show that XGBoost performs better than other machine learning algorithms, with an accuracy rate of 89%. Random forest and logistic regression come in second and third, respectively, with 88% accuracy. KNN and decision trees come next, both with somewhat lower accuracy rates (87%). By incorporating consumer behavior domain variables, this study fills in the gaps in the literature and offers a more thorough understanding of loan projections. In order to improve model performance and strengthen the predictive power of machine learning algorithms in loan scenarios, further research incorporating trials to optimize algorithm parameters is necessary as financial institutions continue to experience difficulties.]]>
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