Skip to main content

Project Overview

The Loan Application Evaluator is a Spring Boot 4 REST service that accepts a loan application and returns either an approved offer with calculated EMI or a list of rejection reasons — all evaluated by pure business logic, persisted to an in-memory H2 database.

What Problem Does It Solve?​

When a borrower applies for a loan, a bank needs to answer three questions fast:

  1. Is this applicant eligible? (credit score, age, income-to-EMI ratio)
  2. How risky is this loan? (risk band → interest rate premium)
  3. What are the repayment terms? (EMI, total payable)

Doing this manually through spreadsheets or ad-hoc scripts is error-prone and untestable. A structured REST service centralises the rules, makes them auditable, and lets front-ends integrate cleanly.

What Is It?​

A single-endpoint Spring Boot API that:

  • Accepts a POST /applications with applicant details and loan request
  • Runs eligibility checks, risk classification, and EMI calculation in one service call
  • Returns 201 Created with either an approved loan offer or rejection reasons
  • Persists every application (approved or rejected) for audit purposes

The project deliberately keeps its scope narrow — one endpoint, one service, one table — so every design decision is visible and explainable.

Tech Stack​

LayerTechnology
LanguageJava 17
FrameworkSpring Boot 4.0.3
WebSpring Web (Spring MVC)
PersistenceSpring Data JPA + H2 (in-memory)
ValidationSpring Boot Starter Validation (Jakarta Bean Validation)
TestsJUnit 5 + Mockito
BuildMaven (Maven Wrapper)
Why Spring Boot 4?

Spring Boot 4 targets Jakarta EE 11 and Java 17+. Package names use jakarta.* (not javax.*). This project is a current-generation example — not legacy Spring Boot 2.x.

Project Architecture at a Glance​

A request enters the controller, is processed by the service (all business logic lives here), persisted via the repository, then the response flows back.

How to Run It Locally​

Prerequisites​

  • Java 17 or higher (java -version)
  • Maven Wrapper included — no separate Maven install needed

Steps​

# 1. Navigate to the source
cd projects/loan-application-evaluator

# 2. Build (compiles + runs tests)
./mvnw clean install           # Linux/Mac
.\mvnw.cmd clean install       # Windows PowerShell

# 3. Start the app
./mvnw spring-boot:run

# App starts on: http://localhost:8084

Try It with curl​

curl -X POST http://localhost:8084/applications \
  -H "Content-Type: application/json" \
  -d '{
    "applicant": {
      "name": "John Doe",
      "age": 30,
      "monthlyIncome": 75000,
      "employmentType": "SALARIED",
      "creditScore": 720
    },
    "loan": {
      "amount": 500000,
      "tenureMonths": 36,
      "purpose": "PERSONAL"
    }
  }'

Approved response:

{
  "applicationId": "a1b2c3d4-...",
  "status": "APPROVED",
  "riskBand": "MEDIUM",
  "offer": {
    "interestRate": 13.5,
    "tenureMonths": 36,
    "emi": 16967.64,
    "totalPayable": 610835.04
  }
}

H2 Console​

The H2 in-browser console is enabled for development.

  • URL: http://localhost:8084/h2-console
  • JDBC URL: jdbc:h2:mem:loanauditdb
  • Username: sa, Password: (empty)

Key Design Decisions​

DecisionChoiceReason
DTOsJava RecordsImmutable, concise, no boilerplate
Domain objects@Embeddable value objectsSingle table, simple lifecycle
Financial mathBigDecimal with scale=2, HALF_UPAvoids floating-point errors
Rejection reasonsEnumType-safe, extensible, no typos
DatabaseH2 in-memoryEasy setup and switching to PostgreSQL later
LombokNot usedJava records + manual builder = no dependency

Common Pitfalls​

  • Using double/float for money — always use BigDecimal for anything financial.
  • Forgetting @Valid on the request body — without it, constraint violations on nested records are silently ignored.
  • ddl-auto=create-drop — the H2 schema is wiped on every restart; do not use this in production.

Further Reading​