Loan Selection System by Using AHP

1. LOAN SELECTION SYSTEM
NAME :MUHAMMAD AFIQ BIN ABDUL JAMIL
MATRIC No :BTCL 15039657
SUPERVISOR :DR. SUHAILAN BIN SAFEI
Final Year Project 1

2. INTRODUCTION
• In finance, a loan is about lending of money from one individual, organization or entity to
another individual, organization or entity.
• They might take a lot of time by browsing for the best loan for them and also wasting their time
by asking from bank to another bank.
• Loan Selection System is proposed to help most for people who need find the best personal loan
for the user.
• The function of the system is to calculate the interest rate set by the bank and the repayment
period that will be choose by the user by using Analytical Hierarchy Process (AHP)
• The system will display the recommended bank, loan available amount and all the legibility &
requirement and additional reference that user can select.

3. Problem Statement
• There is no centralized system that collect all bank’s loan package
in a system.
• Some user may have problem in select the best bank loan
package.

4. Objective
1) To analyze the current problem of bank loan package
selection methods according to user preferences.
2) To design a centralized system that help bank to promote the
loan packages to the users.
3) To implement the AHP technique to help user to select the
best bank loan package.

5. Scope
Admin
• Admin must login to the account.
• Admin have ability to manage the whole account.
• Admin can view and delete user and bank information.

6. Cont..
User
• User must register to the system.
• User have to login to the system.
• User need to complete their own details.
• User have to fill all the question according to their own will.
• User can view the recommended bank that appropriate with the
wishes.

7. cont..
Bank
• The banks must login to the system.
• The banks can update , add and delete any legibility &
requirement for the borrower.

8. Limitation of work
The proposed system will generate list of the bank that only
available in Malaysia. So, the quantity of the bank is limited. The
system will generate by the result based on user choice in Interest
rate and repayment period.

9. Expected result
This selection system will enable user to choose their prefer
Interest rate and the repayment period by their own and expected
results is to be implemented in the web-based system. This system
will come out with a recommended bank that matches with user’s
choice for Interest rate and repayment period also all the legibility
and requirement for borrower.

10. Literature review

11. Criteriaof Choosing bank loan
3 Criteria of choosing bank loan :
• APR (Interest Rate)
• Repayment Period
• Maximum Amount

12. What is Annual percentage rate (APR) ?
• The Annual percentage rate (APR) is the charge interest rate for
the whole year.
• The APR measures your cost of borrowing money from a specific
bank, as well as any other associated costs.

13. Repayment period ?
• Time expect loan settle or length of repayment is a set period of
time to repay your loan.
• If make longer repayment period, the monthly payment will be
lower.
• People have to pay more in interest if they had shorter repayment
period.

14. Maximumamount ?
• Maximum loan amount describes how much a borrower can borrow
at a time.
• Most of the bank have decide how much a borrower can borrow in
a time for personal loan.

15. 1) LOAN RECOMMENDER
• RinggitPlus help user by listing the recommender loan bank by insert the amount
user like to borrows, year settlement, monthly income .
• After user key in all the requirements, the system will show the list of suggested
banks that user can apply for their loan.
• Advantage of this existing system are, RinggitPlus allow user to insert their
amount of money that would like to borrow and the system will list all the loan
bank that appropriate with the requirement.
• But , the system does not show to the user to select the best bank loan in their
list.

17. 2) Loan calculator
• Loan calculator is use to work out repayment figure for personal loan, or
any other type of credit agreement.
• It also can helps work out how long it will take to pay off your plan.
• The problem in loan calculator is they do not recommend and list to user
which bank loan that user can choose.
• Loan calculator only calculate either monthly repayment and repayment
period.

18. LOAN
SELECTION
???

19. Analytic Hierarchy Process (AHP)
• Analytic Hierarchy Process (AHP) is one of Multi Criteria decision
making method that was originally developed by Prof. Thomas L.
Saaty.
• Method to derive ratio scales from paired comparisons.
• The input can be obtained from actual measurement such as
interest, price etc., or from subjective opinion such as satisfaction
feelings and preference.

20. The basic steps in the solution of a decision
problem using AHP
• Define the goal of the decision – (Find the best bank loan)
• Structure the decision problem in a hierarchy –(Interest rate and
repayment period)
• Pair comparison of criteria in each category
• Calculate the priorities and a consistency index
• Evaluate alternatives according to the priorities identified

21. AHP Advantage and disadvantage
Advantage Disadvantage
• Flexible, intuitive and checks
inconsistencies.
• Irregularities in ranking.
• Importance of each elements become
clear since the criteria problem is
constructed into a hierarchical structure.
• Information may be lost because additive
aggregation is being used.
• No bias in decision making. • More number of pairwise comparisons is
needed.

22. SYSTEM OVERVIEW

23. System Framework

24. CONTEXT DIAGRAM

26. DATAFLOW DIAGRAM LEVEL 0
(ADMIN)

28. DATAFLOW DIAGRAM LEVEL 0 (USER)

30. DATAFLOW DIAGRAM LEVEL 0 (BANK)

32. ENTITY RELATIONSHIP DIAGRAM

34. Thank you