UML class diagram for bank loan system explains the interrelatedness of entities like customer, loan, bank, account, loan officer, credit score, payment, and collateral. It shows that when a customer applies for a loan their evaluation goes through the bank before it is reviewed by a loan officer. The loan is secured against collateral and payments are tracked. Customer eligibility is also assessed through credit score and account. This is the process followed during bank loan processing and management.
