Patent ID: 8190511

Claim:
A method for determining individually customized loan terms for a customer, comprising: accepting customer credit application data corresponding to the customer; accessing credit bureau data corresponding to the customer, wherein the credit bureau data contains a credit rating for the customer; calculating a weighted expected probability of default for a loan to the customer based at least in part upon weighting a first expected probability of default and a second expected probability of default, wherein each the first expected probability and the second expected probability are based on the customer credit application data and the credit bureau data; calculating a risk from debt burden of the customer based at least in part upon a volatility of income determined from government statistics on aggregate income movements of a population calculating a risk free rate; and determining customized loan terms that are above the risk free rate, wherein said customized loan terms deliver a predetermined minimum return on equity for a lender, and said customized loan terms are based at least in part upon the weighted expected probability of default, a capital structure of the lender, and funding rates available to the lender.