Product design question
Design a new type of mortgage that is both affordable and profitable.
- LendingClub
- Product design
- Hard
Practice this question out loud. An AI interviewer asks it, follows up like a real interviewer would, and scores your answer. Type or speak.
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What this question tests
Tests fintech product design: balancing affordability for borrowers with sustainable profitability for the lender in a real financial product.
How to approach it
- Define the target borrower: likely underserved by traditional mortgages, such as gig workers or first time buyers with thin credit files.
- Identify why current mortgages fail them: rigid income verification requirements and high rates for non traditional credit profiles.
- Propose a design: flexible income verification using bank transaction data, paired with risk based pricing tiers instead of a single rigid rate.
- Address profitability directly: risk based pricing and smaller, more frequent payment options must still price in default risk accurately.
- Define success: default rate within an acceptable range alongside adoption rate among the underserved borrower segment.
- Confirm with the interviewer whether the focus is first time buyers, gig workers, or another specific underserved group.
What a strong answer includes
- Targets a specific underserved group, gig workers with variable income, rather than a generic new mortgage for everyone.
- Proposes using bank transaction data for income verification instead of rigid pay stub requirements, addressing a real qualification barrier for this segment.
- Uses risk based pricing tiers to keep the product profitable, rather than a single low rate that would not price in true default risk.
- Sets a measurable goal, for example a stated default rate ceiling paired with an adoption target among the underserved segment within the first year.
Common mistakes
- Proposing an affordable rate without addressing how the lender remains profitable given real default risk.
- Designing for everyone generically instead of a specific underserved borrower segment with a real qualification barrier.
Likely follow-up questions
- How would you price risk for a borrower with highly variable gig income?
- What guardrail would prevent this product from taking on too much default risk?
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More questions from LendingClub
Learn the skill behind it
Chapters of the AI PM course that teach what this question tests.
- Chapter 4: Discovery and strategy for AI products
- Chapter 7: AI UX and human oversight: design for a system that is wrong sometimes
- Chapter 14: Get the job: the AI PM interview loop