Risk Management To Unsecured Loans Of Commercial Bank

Unsecured loans are the personal loans which doesn’t need a mortgage, the loan applicantuse the credit record instead of a mortgage to apply the credit. The unsecured loan are themost risk in all the personal loans, thus, how to control the risk effectively is the criticalproblem run through all the parts of it. This paper took the travelling loan form IndustrialBank as example to describe how to deal with the risk management problems.First of all, the paper introduces travelling loans by three basic aspects like interest rate,limit of the credit and mode of repayment. After that, the mode of risk management oftravelling loan has a difference before the bad loans ratio increased, so chapter two introducethis situation.There are mainly two problems in risk management mode of travelling loan of Industrialbank, on the one hand, the interest rate is low compared with other commercial banks, but thegross interest is different depend on the two modes of repayment. These two modes havedisadvantages each, one is low-margin, the other one is that larger in the default rate. On theother hand, the loan process is the same with other personal loans which is invalid in thedecrease of risk.The paper propose some useful advices to solve these problems, such as make use ofderivatives, design the professional process for unsecured loans, and constructing perfectcredit system by big data. Besides, in the end of the paper, it raised some risk managementadvices to other commercial banks that planning to open unsecured loans or travelling loans.