The banking sector helpful for securing loan to customers by cross checking all the prerequisite documents required to process. DataMining classification algorithms helps to classify the loan applications and helpful automatic selection of customers who are eligible to get loan This paper is split into four sections (i)Data preprocessing (ii) Training the dataset and on collected information (iii) Applying the decision tree algorithms(iv) Testing the results. In this paper we introduce an effective prediction model for the bank that may help them predict the good customers who have applied for loan. Decision Tree data mining Algorithm is applied to predict the attributes relevant for credibility. A prototype of the model is described in this paper which can be used by the organizations in making the right decision to approve or reject the loan request of the customers.