Credit Approval System

1. About the Project

This is a backend API built using Django and Django REST Framework for a Credit Approval System. The system allows financial institutions to manage customers and loans, determine loan eligibility based on income, and process new loan applications.

Key functionalities include:

• Registering new customers
• Evaluating loan eligibility based on income and credit profile
• Creating and managing loans
• Viewing loan details per customer or loan

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2. Loan Approval Logic Overview

✅ Approved Limit Calculation

• Formula:

  approved_limit = monthly_salary * 36
  

• A customer can only request loans up to this amount.

✅ Eligibility Check

• Uses parameters: loan_amount, tenure, interest_rate, monthly_salary

• Calculates Monthly EMI using:

  EMI = (P * R * (1 + R)^N) / ((1 + R)^N - 1)
  where:
    P = loan_amount
    R = (interest_rate / 12 / 100)
    N = tenure (in months)
  

• If the monthly_emi is ≤ 50% of salary, loan is approved.

• If not, interest rate is auto-corrected to try approving the loan.

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3. Setup and Run Project

✅ Pre-requisites

• Docker & Docker Compose installed
• Git installed

✅ Clone the Repository

git clone <your-repo-url>
cd Credit_Approval_System

✅ Environment Setup

Create a .env file:

SECRET_KEY=your_secret_key
DEBUG=True
ALLOWED_HOSTS=*
DATABASE_URL=postgres://postgres:postgres@db:5432/credit_db

✅ Run the Project Using Docker Compose

docker-compose up --build

This will:

• Set up Postgres and Redis
• Run migrations
• Ingest sample data
• Start Django app and Celery worker

✅ Run Tests

You can add the following to docker-compose.yml to run tests:

  test:
    build: .
    command: python manage.py test
    volumes:
      - .:/app
    depends_on:
      - db
    env_file:
      - .env

Then run:

docker-compose run test

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Made with ❤️ by Santhosh!✨