Sample Credit policy for a personal loan with a Business Rule Engine

Sangram Chavan
4 min readJan 27, 2023

Here is an example of a credit policy for providing a personal loan in India:

  1. Eligibility Criteria: The applicant must be a resident of India and at least 21 years of age. The applicant must also have a stable source of income and a good credit history.
  2. Credit Score: The applicant’s credit score will be checked using one of the credit bureaus in India (CIBIL, Experian, Equifax, etc.). A minimum credit score of 750 will be required to be eligible for a personal loan.
  3. Income Verification: The applicant’s income will be verified through salary slips, income tax returns, and bank statements. The applicant’s net income must be at least INR 20,000 per month.
  4. Employment Verification: The applicant’s employment status will be verified through pay slips, employer’s letter, and other relevant documents. The applicant must have been employed for at least 2 years.
  5. Collateral: The applicant is not required to provide any collateral for a personal loan.
  6. Loan Amount: The maximum loan amount that can be borrowed is INR 15,00,000. The loan amount will be decided based on the applicant’s income and creditworthiness.
  7. Interest Rate: The interest rate for a personal loan will vary based on the applicant’s credit score, income, and other factors. The rate will be determined by the lender.
  8. Repayment: The loan must be repaid within a maximum of 5 years. The applicant will be required to make a fixed monthly installment.
  9. Default: If the applicant defaults on the loan, the lender may take legal action to recover the outstanding amount.
  10. Additional Documents: The applicant will be required to provide additional documents such as PAN card, Aadhaar card, Passport, Voter ID, etc.
  11. KYC: The applicant will be required to complete the Know Your Customer (KYC) process as per the guidelines of Reserve Bank of India (RBI) and other regulatory bodies.

This credit policy is a general guideline, and the specific terms and conditions may vary depending on the lender. The lender may also include any additional terms and conditions as per the requirement.

Write a detailed business rule engine for the same credit policy

A business rule engine is a software system that automates the decision-making process by evaluating a set of rules against the input data. Here is an example of a business rule engine for the credit policy for providing a personal loan in India:

  1. Eligibility Criteria:
  • Rule 1: Check if the applicant is a resident of India.
  • Rule 2: Check if the applicant is at least 21 years of age.
  • Rule 3: Check if the applicant has a stable source of income.
  • Rule 4: Check if the applicant has a good credit history.
  • Action 1: If all the above rules are satisfied, the applicant is eligible for a personal loan.

2. Credit Score:

  • Rule 5: Check the applicant’s credit score using one of the credit bureaus in India (CIBIL, Experian, Equifax, etc.).
  • Rule 6: Check if the credit score is at least 750.
  • Action 2: If the credit score is at least 750, proceed to the next step.

3. Income Verification:

  • Rule 7: Verify the applicant’s income through salary slips, income tax returns, and bank statements.
  • Rule 8: Check if the net income is at least INR 20,000 per month.
  • Action 3: If the net income is at least INR 20,000 per month, proceed to the next step.

4. Employment Verification:

  • Rule 9: Verify the applicant’s employment status through pay slips, employer’s letter, and other relevant documents.
  • Rule 10: Check if the applicant has been employed for at least 2 years.
  • Action 4: If the applicant has been employed for at least 2 years, proceed to the next step.

5. Collateral:

  • Action 5: The applicant is not required to provide any collateral for a personal loan.

6. Loan Amount:

  • Rule 11: Check if the maximum loan amount that can be borrowed is INR 15,00,000.
  • Rule 12: Decide the loan amount based on the applicant’s income and creditworthiness.
  • Action 6: The loan amount will be decided based on the applicant’s income and creditworthiness.

7. Interest Rate:

  • Rule 13: Check the interest rate for a personal loan.
  • Rule 14: Decide the interest rate based on the applicant’s credit score, income, and other factors.
  • Action 7: The interest rate will be determined by the lender.

8. Repayment:

  • Rule 15: Check the maximum repayment period for the loan.
  • Rule 16: Check the fixed monthly installment for the loan.
  • Action 8: The loan must be repaid within a maximum of 5 years. The applicant will be required to make a fixed monthly installment.

9. Default:

  • Rule 17: Check if the applicant defaults on the loan.
  • Action 9: If the applicant defaults on the loan, the lender may take legal action to recover the outstanding amount.

10. Additional Documents:

  • Rule 18: Check if the applicant has provided all the additional documents such as PAN card, Aadhaar card, Passport, Voter ID, etc.
  • Action 10: The applicant will be required to provide additional documents as per the requirement.

11. KYC:

  • Rule 19: Check the Know Your Customer (KYC) process as per the guidelines of the Reserve Bank of India (RBI) and other regulatory bodies.
  • Action 11: The applicant will be required to complete the KYC process as per the guidelines of the Reserve Bank of India (RBI) and other regulatory bodies.

12. Negative areas:

  • Rule 20: Check if the applicant lives in an area with a high rate of loan defaults.
  • Action 12: If the applicant lives in an area with a high rate of loan defaults, their loan application may be rejected or further scrutiny may be required.

13. Negative jobs:

  • Rule 21: Check if the applicant is employed in a job that has a high risk of layoffs or job loss.
  • Action 13: If the applicant is employed in a job that has a high risk of layoffs or job loss, their loan application may be rejected or further scrutiny may be required.

14. High-risk industries:

  • Rule 22: Check if the applicant is employed in an industry that is considered high-risk, such as construction, real estate, or retail.
  • Action 14: If the applicant is employed in a high-risk industry, their loan application may be rejected or further scrutiny may be required.

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Sangram Chavan

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