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Home Loans Analysis

Home Loans Analysis

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02/19/2015

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Sections

  • CHI Square Test
  • HDFC
  • SBI
  • 11. Findings
  • 12. Conclusion

1

9. Analysis of the Information
Housing Survey
1. Purpose of taking Home Loan There are many different products which are provided by the Banks and Housing Finance Companies in India. The reason for asking this question is to know the degree of preference towards Home Loan products by the people.
Table 9. 1

First Purchase in ready construction Under construction property Purchase in re-sale Self construction - extension of existing living space Land loans Home Improvement Loan

54 40 15 7 2 7

Figure 9.1 1

Purpose of taking Home Loans ready construction
Under construction property 6% 2% 6% 12% 42% Purchase in re-sale

First Purchase in

32%

Self construction extension of existing living space Land loans

Home Improvement Loan

From the above graph we can see that maximum number of people prefer the Home Loan for First Purchase in ready construction and under construction property. Out of which the
2

preference for the First Purchase in ready construction is comparatively higher, that is 42%. This data shows that individuals are more attracted towards the purchase of house after they properly see and feel the house. 32% people have chosen the Home Loan for Under Construction Property, majority of them have approached Home Loan provider through builder’s tie-up. We can see that only 2% out of the sample of 200 have chosen Land Loans. These individuals are having income more than Rs. 5 Lakh. One of the major reasons for this is they get no tax benefit on principal and interest of this loan.
2. Type of Home Loan Providers

There are many Housing Finance Companies and Banks which provide home Loan products. The purpose of asking this question is to know the preferred source, of home loan provider, by the people.
Table 9. 2

Housing Finance Companies Banks
Figure 9. 1

41 84

Type of Home Loan providers

HFC 33% HFC Banks Banks 67%

3

We can see that popularity of Banks in Home Loan sector is more than the Housing Finance Companies. Banks capture 67% of our sample and 33% of people go for Housing Finance companies. The reason for this is, Banks are providing many products and people are already taking other services from Banks so Banks are easily acceptable by the people.

2. Housing Finance Companies This question helps to know the preference of the people towards the Housing Finance Companies.
Table 9. 3

Gruh Finance LIC housing Finance DHFL Any other
Figure 9. 2

14 19 5 3

Housing Finance Companies

Any other DHFL 7% 12%

Gruh Finance 34%

Gruh Finance LIC housing Finance DHFL Any other

LIC housing Finance 47%

4

From the graph we can see that out of 41 people who have taken home loan from the HFC, 47 % have chosen LIC Housing Finance which is highest amongst the group. One reason for this can be the lower interest rate of LIC and brand name of LIC. Gruh Finance is also having the second largest portion of 34 %. In any other category 3 people have specified PNB Housing Finance Ltd and Bank of Baroda Housing Finance as home loan provider. 4. Banks This question helps to know the preference of the people towards the Bank as home loan provider.
Table 9. 4

S.B.I. I.C.I.C.I. H.D.F.C. Any other
Figure 9.3

31 19 26 8

Banks

Any other 10%

S.B.I. 36%

S.B.I. I.C.I.C.I. H.D.F.C. Any other

H.D.F.C. 31% I.C.I.C.I. 23%

5

this question helps to analyze the number of people falling in to different ranges of loan amount. Bank of Baroda and Punjab National Bank and ABN AMRO 5. Out of 19 individuals of ICICI 9 individuals are Professionals. Dena Bank . most of respondents are Government employees and business man. Any other category includes banks like ADC. From this we can say that popularity of SBI. property price and person’s ability to repay the loan amount. 36% have chosen SBI.From the graph we can see that out of 84 people who have taken home loan from the Banks. 31% people have who have gone for HDFC includes 10 Private employees out of which 4 are the employees of the same organization. 4 15 50 49 6 5 Amount of Home Loan 5% 4% 12% Less than 5 Lakh 5 Lakh to 10 Lakh 10 Lakh to 15 Lakh 39% 40% 15 Lakh to 25 Lakh More than 25 Lakh 6 . Axis. Amount of loan Although the loan amount depends on the income proofs. is more in Private sector employees and Businessman. 5 Less than 5 Lakh 5 Lakh to 10 Lakh 10 Lakh to 15 Lakh 15 Lakh to 25 Lakh More than 25 Lakh Figure 9. Table 9. which is highest amongst the group Out of 31 individuals who have chosen SBI.

This question gives an in-sight regarding the time duration preferred by the people for Home Loan.From the graph we can see that majority of people prefers to take a loan of second and third range which is 5 Lakh to 10 Lakh and 10 Lakh to 15 Lakh respectively. So that we can see that Females are more likely to take Home Loan of less amount. 6. Table 9.5 14 36 48 27 Time Duration of Home Loan 15 years or more 22% 1 year to 5 years 11% 5 years to 10 years 29% 1 year to 5 years 5 years to 10 years 10 years to 15 years 15 years or more 10 years to 15 years 38% 7 . Two individuals out of three who have taken the loan of more than 25 Lakh is for the Land Loan. These individuals are having the income range of 2.5 Lakh to 5 Lakh and few falls in the income range of more than 5 Lakh. 7 Females out of 11 females have taken the Home Loan for the amount which is less than 5 Lakh. Through this analysis we can say that middle class people are more likely to go for home loans. Time duration of Home loan There are many options available to home loan takers for deciding their time duration of paying the Loan and amount of EMIs. 6 1 year to 5 years 5 years to 10 years 10 years to 15 years 15 years or more figure 9.

As number of years increase the amount of EMIs decreases and this is more convenient to the middle class people. All the individuals of the category 1 year to 5 years have taken the loan of the amount less than 5 Lakh.7 Fixed Rate Floating Rate Figure 9.6 45 80 Type of Int. Rates Fixed Rate 36% Floating Rate 64% Fixed Rate Floating Rate 8 . 7. This question gives an insight towards the choice of interest rate by the people. One of the main reasons for longer duration to repay the loan is lower EMIs. The entire individuals who have taken the loan of more than 15 Lakh and few from the range of 10 Lakh to 15 Lakh falls in the time duration of more than 15 years. Table 9.From the above graph we can see that 38% of people prefer the time duration of 10 years to 15 years to pay home loan. Type of interest rate There are two type of interest rate available to the Home Loan takers.

Floating rate gives flexibility and protection to the home loan takers as it varies according to the market condition and economy of the country.8 5% to 7% 7% to 9% 9% to 11% 11% to 13% 13% or more 0 0 3 17 25 Figure 9. Mostly people believe that if they take the loan at high fixed interest rate and future interest rates will decrease then they will have to bear unnecessary interest burden. Rate 0% 7% 5% to 7% 7% to 9% 9% to 11% 55% 38% 11% to 13% 13% or more 9 . Range of Fixed interest rate Interest rate is the important factor affecting the amount of EMIs. 8. In this situation this question helps to know the people who are paying the fix rate of interest falling in the different ranges shown below.From the above graph. The data shows that number of people are less who are going for fixed rate of interest. Table 9. we can conclude that 64% of people go for floating rate of interest.7 Range of Fixed Int.

The above mentioned data indicates that out of 45 people of this category. The characteristic of floating rate is that it changes from time to time. Currently Interest rates for Home Loan is low in all Banks and HFCs.8 At the time of Disbursement 0 0 5 31 44 - Currently 0 42 24 4 0 10 Range of Floating Int rate (At the time of Disbursement) 0% 6% 5% to 7% 7% to 9% 9% to 11% 11% to 13% 13% or more Don’t know exactly 55% 39% 10 .10 (III) 1.9 5% to 7% 7% to 9% 9% to 11% 11% to 13% 13% or more Don’t know exactly Figure 9. Range of Floating interest rate 2. Because of non flexibility of fixed rates they are paying high interest rate and this is the major reason for the dissatisfaction of all 16 individuals who are discussed in QUE. This information gives the clear picture of the shift of Home Loan rates from one range to another. 55% pay fixed rate of interest which is more than 13%. Table 9.

Rate(Currently) 0% 5% 13% 0% 5% to 7% 7% to 9% 9% to 11% 52% 11% to 13% 13% or more Don’t know exactly 30% Recession in the Indian economy and different steps taken by the RBI for the recovery of the same is having the positive impact on the floating rates of interest in Home Loan. We can see that 5 people were falling in the range of 9% to 11% of interest rate at the time of disbursement.Figure 9. In SBI highest people have selected floating rate of interest. but currently there are 24 individuals falling in this range of floating interest rate. while in HDFC 19 individuals have selected floating interest rate 11 . 9 Range of Floating Int. This situation can be because of lack of attention paid towards the timely notice letter sent by the Home Loan Company. At the same time we can not ignore that number of individuals falling in the interest rate range of more than 13% is the highest at the time of disbursement with 55% which is now 0%. There are 10 individuals who don’t know their current floating rate of interest.

Table 9. 4 Home Loan takers of Gruh Finance and rest 4 were of LIC Housing Finance. Rating for the bank’s procedure from 1 to 5. 17 1-Highly Dissatisfied. (Where 5 stands for the best) This question helps to understand the satisfaction level of Home Loan takers on the following shown indicators. 38 Series1 5-Highly Satisfied. 6 4-Satisfied. Out of 17 individual who were dissatisfied include 6 Home Loan taker of SBI Housing Finance. have taken the Home Loan from private sector.10. 10 6 17 55 38 9 Ease of Documentation 60 50 3-Average. 9 From the findings we can see that 55 individuals out of people have given average rating and 38 individuals have given satisfactory rating.10 Ease of Documentation 1-Highly Dissatisfied 2-Disatidsfied 3-Average 4-Satisfied 5-Highly Satisfied Figure 9. Most of the people who have given the rating of 4 and 5. 55 numbers 40 30 20 10 0 scale 2-Disatidsfied. which indicate satisfaction and high satisfaction. 12 .

People who were highly satisfied are mostly the client of SBI Housing Finance and HDFC.Table 9. 11 Time Duration for Loan Sanctioning 60 50 40 30 20 10 0 50 47 Series1 Numbers 14 0 14 3Av er ag e d 2D isa 4Sa tis at is iss 1H ig hl y scale From the findings we can see that 50 individuals out of people have given average rating and 47 individuals have given satisfactory rating. From this information we can say that private sector is taking less time for sanctioning of Home Loan 13 5H ig hl y D S at isf ie d d tid sf ie fie fie d . 11 Time Duration for Loan Sanctioning 1-Highly Dissatisfied 2-Disatidsfied 3-Average 4-Satisfied 5-Highly Satisfied 0 14 50 47 14 Figure -9.

14 . 12 Interest Rate Charges 1-Highly Dissatisfied 2-Disatidsfied 3-Average 4-Satisfied 5-Highly Satisfied 8 28 53 30 6 Figure 9.Table 9. Dissatisfaction towards fixed rate of interest is because of liberal rates offered to the individuals who have opted for floating rate of interest for Home Loan. All those individuals who are highly dissatisfied and majority of those who are dissatisfied are fixed interest rate payers. 12 Interest Rate Charges 60 50 53 Numbers 40 30 20 10 0 1-Highly Dissatisfied 2-Disatidsfied 3-Average scale 8 28 30 6 4-Satisfied 5-Highly Satisfied 53 individuals out of have given average rating to Interest rate charges.

people are not satisfied as they are less willing to pay such charges. 13 1 25 67 28 4 Processing Fees 80 70 60 50 40 30 20 10 0 1-Highly Dissatisfied 2-Disatidsfied 3-Average 4-Satisfied 5-Highly Satisfied 1 4 25 28 67 Processing Fees are almost similar in most of the Home Loan providers. when it comes to the charges or fees. 13 Processing Fees 1-Highly Dissatisfied 2-Disatidsfied 3-Average 4-Satisfied 5-Highly Satisfied Figure 9. 67 individuals have given average rating to Processing Fees. One of the reasons for this can be.Table 9. 15 .

who are dissatisfied. 16 .would have had bad experiences with there Home Loan providers. 14 9 16 43 45 12 Charges for late payment 50 45 40 35 30 25 20 15 10 5 0 43 45 Numbers 16 12 2-Disatidsfied 3-Average Scale 4-Satisfied 5-Highly Satisfied 43 people have responded for this question. 14 Charges for late payment 1-Highly Dissatsfied 2-Disatidsfied 3-Average 4-Satisfied 5-Highly Satisfied Figure 9.Table 9. Here one assumption can be made that 32 individuals.

 Availability of sufficient fund. Willingness for prepayment of the Home loan Table 9. 15 13 112 Willingness for Prepayment of Home Loan Yes . 13 Yes No No. 112 13 people are willing for the prepayment of the Home Loan in which 9 individuals are fixed interest rate payers. 17 . This is the open ended question and people have given the reasons like…  Fixed rate of interest is high on their Home Loan and they are more likely to go for prepayment charges rather than paying high fix rate of interest. 15 Yes No Figure 9.1.

111 18 . age of the person. Home loan with Insurance cover Generally there are two types of Home Loan Insurance Covers. property price and tenure of the loan. Insurance cover cannot be more than the amount of Home Loan. Insurance cover is decided on the bases of the amount of Home loan. Premium paying term is the tenure of the Loan and if property is under construction then. 16 Home Loan with insurance Cover Yes. one is Life Insurance and another is General Insurance. 14 Yes No No. as per the choice of client. construction period is also added in that. 16 Yes No 14 111 Figure 9. Table 9. Premium of this insurance is sometimes included in the EMIs paid by the Loan taker or sometimes paid separately.12.

14. majority of people from the sample of have not taken insurance with their Home Loan. This question is helpful to know the factors affecting the satisfaction level of the loan takers.As it is not compulsory and it highly depends on the preference of the Home Loan taker to either take the insurance or not. Table 9. 17 Yes No 17 108 Figure 9. 17 Willingness of Transfer of Home Loan Yes . 17 Yes No No. 108 19 . Willingness of transfer of home loan People have responded for these questions for the transfer of Home Loan from one provider to another provider. One of the reasons for this can be increased burden of premium as person is already paying EMI and individuals are not much ready to bear extra payments.

because of its 8% interest rate scheme. Out of 17 individuals 8 have committed that they want to shift to S.B. people have given reasons like high interest rate charged by them. ICICI. All these people are the clients of private Home Loan providers namely Gruh Finance. Table 9. 18 12 20 60 15 18 Sources of approaching Home Loan Provider 14% 12% 10% 16% Personal Analyses Builder’s tie-up Friend’s suggestion From Advertisement If any other 48% 20 .I. For this. Generally they seek information like Rate of Interest. Sources of approaching home loan provider Before going for the Home Loan. people try to get the details of different products and loan providers through different sources mentioned below. HDFC. 15.17 people are willing to transfer there loan. 18 Personal Analyses Builder’s tie-up Friend’s suggestion From Advertisement If any other Figure 9. commitment towards services and ease of all processes.

so have chosen the same for Home Loan. Few were the clients of different other loans of that organization in the past and their satisfaction level has led them towards the home loan of the same organization.From the data we can see that word of mouth is the best source people think. to get the information as 48 % people have taken suggestion from their friends and relatives for Home Loan. Any other category includes reasons like…    Either that person or his/her spouse/family members working in that organization Satisfied with the banking services. 21 .

22 . 19 Gender of Home Loan Takers Female 9% Male Female Male 91% From the above graph we can see that 91 % of the respondents are Male and only 9 % respondents are Female. Major decisions regarding huge amount of financial products are generally taken by the Male. 19 Male Female 114 11 Figure 9. Gender of Home Loan taker Table 9. This data includes the names of people who have taken the Loan on their own names.Personal Detail 1.

So from this data we can conclude that maximum number of people going for Home Loan are Graduates. 39 % Individuals are Post Graduates and 6% are under Graduates. Education of Home Loan taker Table 9. 20 Education of Home Loan Takers Under Graduates 6% Post Graduates 39% Post Graduates Graduates Under Graduates Graduates 55% From the Home Loan takers 55 % Individuals are Graduates. 23 .2. 20 Post Graduates Graduates Under Graduates 49 68 8 Figure 9.

21 Private Employee Government Employee Businessman/Businesswoman Professional 39 14 46 26 Figure 9.3. 24 . Occupation of Home Loan Taker Table 9. So from this data we can conclude that maximum number of people going for Home Loan are private employees and businessman/woman. 21 Professional 21% Private Employee 31% Government Employee 11% Private Employee Government Employee Businessman/Businessw oman Professional Businessman/B usinesswoman 37% From the above graph we can see that 31 % of people are private employees and 37 % of people are businessman/woman.

22 Less than 1. People having income less than 1.5 Lakh 1.5 Lakh to 2. 22 2 22 59 27 15 Income of Home Loan Takers 12% 22% 2% 18% Less than 1.5 Lakh 1. out of that 46 % are from the income range of 2.5 Lakh 2.5 Lakh 3. 25 .5 Lakh to 2.5 Lakh and more than 5 Lakh covers the smallest part of this chart. Income of Home Loan Takers Table 9.5 Lakh to 3.5 Lakh to 5 Lakh More than 5 Lakh Figure 9.5 Lakh to 5 Lakh More than 5 Lakh 46% From the above graph we can see that people going for home loan.5 Lakh 3. This people come unders the middleclass income level of the society.5 Lakh.5 Lakh to 3.4.5 Lakh to 3.5 Lakh 2.

26 .

1 Loan Amt Up to Income( in Lakh) 5 Lakh Up to 1.5 0 0 1 0 3. Ho: There is significant relation between income of a respondent and amount of Home loan H1: There is no significant relation between income of a respondent and amount of Home loan ICICI Table 10.5 2. So we will assume two hypotheses related to this analysis.CHI Square Test.5 1.5 to 2.5 to 3.5 to 5 More than 5 Total 0 1 5 to 10 Lakh 10 to 15 Lakh 15 to 25 Lakh More than 25 Total 0 2 8 2 1 0 2 2 0 0 0 0 0 0 0 0 0 4 11 3 0 12 0 5 1 1 0 0 1 19 27 . Purpose: The purpose of this of this test is to analyze that whether the amount of loan is dependent on income of a respondent or not.

52 0.052 -0.57 0.2 0 0.57 6.21 2.854 0.260 17.000 0.324 0.062 0.9 -0.78 0.270 0.899 0.810 0.570 0.78 0.000 0.9 0.15 1.15 0.068 0.000 0.21 0.26 0.000 0.000 0.005 0.052 0.3 Fo 0 0 0 0 0 0 2 2 0 0 1 8 2 0 0 0 2 1 0 0 0 0 0 1 0 fe 0 0 0 0 0 0.279 0.15 0 0.94 1.000 0.948 -0.000 0.044 0.052 2.000 0.052 0 0 0 0 0 Arranging Observed & Expected Frequencies As Follows: Table 10.052 0.397 0.124 0.15 0.052 0 fo-fe 0 0 0 0 0 -0.52 6.210 0.000 (fofe)2/fe 0.21 0 0.023 0.Expected Frequencies\ Table 10.309 28 .000 0.57 0 0.044 0.26 Calculations 0 0.210 0.21 0.052 0.150 0.26 0.57 0 -0.000 0.9 0.22 -0.162 0.1 0.63 -0.63 0.000 0.57 0.94 2.63 0 1.185 1.43 1.000 0.000 0.9 0.325 0.630 0.000 21.899 0.107 0.000 0.15 0 -0.150 0.003 0.000 0.06 -0.52 1.9 0.15 0.21 0 0.21 -0.023 0.052 0 2.010 0.000 0.283 0.048 0.948 0 (fofe)2 0.

309 The value of ‫ א‬2 = 21. Thus we accept the null hypothesis There is significant relation between income of a respondent and amount of Home loan 29 .‫ א‬2 = Σ (O-E)2 E = 21.) = (r-1) x (c-1) = 16 ‫א‬2 tab = (at 5 % confidence level)= 26.309 is within the acceptance region.309 Degree of freedom (D.296 Here ‫א‬2 cal < ‫א‬2 tab.F. Hence Ho is accepted Interpretation: As figure shows the sample Chi Square the value of 21.

26 0 0.76 0.5 to 5 More than 5 Total 0 7 5 to 10 Lakh 10 to 15 Lakh 15 to 25 Lakh More than 25 Total 0 2 1 1 0 3 7 4 0 0 0 0 0 0 0 0 0 6 14 5 0 4 1 15 0 0 0 0 1 26 Expected Frequency Table 10.5 1.5 to 2.88 0.5 0 1 6 0 3.5 to 3.61 3.15 0.5 2.5 0 1.15 0 3.07 2.57 0 0 0 0 0 0 0 0 0 0 30 .92 2.34 0.76 1.4 Loan Amt Up to Income( in Lakh) 5 Lakh Up to 1.HDFC Table 10.46 8.

46 0 0 3.212 0.023 0.000 0.92 3.000 5.000 0.61 1.000 0.F.142 0.237 Degree of freedom (D.061 0.46 0 0 2.24 1.) = (r-1) x (c-1) = 16 ‫א‬2 tab = (at 5 % confidence level)= 26.15 -1.372 1.000 0.34 0.000 0.000 (fofe)2/fe 0.268 0.324 0.000 0.334 0.166 0.08 -0.000 0.000 0.185 0.000 0.018 1.796 0.12 0 0 -0.Arranging Observed & Expected Frequencies As Follows: Table 10.145 0.000 1.000 0.07 0 0 1.26 0.26 -0.15 0.000 1.000 0.76 2.000 0.07 0 0 -1.296 The value of ‫ א‬2 = 6.615 0. =26.436 0.76 2.000 0.24 -1.43 0 0 (fofe)2 0.000 0.068 0.000 0.15 8.57 0 0 fo-fe 0 0 0 0 0 -0.058 1.150 0.254 0.000 0.000 1.340 0.237 The value of ‫ א‬2 = 6.323 1.000 0.000 0.000 0.000 0.237 ‫ א‬2 = Σ (O-E)2 = 6.61 0.34 0.231 1.260 0.000 6.237 ‫א‬2 tab.7 fo 0 0 0 0 0 1 2 3 0 0 6 1 7 0 0 0 1 4 0 0 0 0 1 0 0 Fe 0 0 0 0 0 1.293 31 .88 0 0 0.076 0.15 0.

8 Loan Amt Up to Income( in Lakh) 5 Lakh Up to 1.5 1 1 2 0 3.5 to 2.5 to 5 More than 5 Total 0 4 0 5 to 10 Lakh 10 to 15 Lakh 15 to 25 Lakh More than 25 Total 0 4 4 4 3 5 3 0 0 0 0 0 0 0 1 1 8 11 8 0 12 0 11 2 2 1 2 3 31 32 .Here ‫א‬2 cal < ‫א‬2 tab.237 is within the acceptance region.5 1. Thus we accept the null hypothesis There is significant relation between income of a respondent and amount of Home loan SBI Table 10.5 2. Hence Ho is accepted As figure shows the sample Chi Square the value of 6.5 to 3.

001 0.35 0.010 0.828 0.12 -0.210 0.91 0.19 0.25 1.063 1.348 0.83 0.81 0.25 3.16 -1.490 0.38 -0.030 0.51 0.064 0.000 1.1 -0.029 0.064 0.268 0.029 0.636 33 .38 0.51 0.350 0.636 The value of ‫ א‬2 = 24.38 1.123 0.268 0.17 -0.144 0.9 Fo 0 0 0 0 0 1 4 3 0 0 2 4 5 0 0 0 4 3 0 1 0 0 0 2 1 fe 0.19 fo-fe -0.12 0.276 0.064 -0.700 0.41 4.03 0.03 3.240 0.59 -0.144 1.346 1.636 ‫ א‬2 = Σ (O-E)2 E = 24.004 0.83 0.51 0.03 0.51 -0.81 (fofe)2 0.260 0.015 0.000 24.06 0.828 0.000 0.124 3.160 1.247 0.260 0.17 -0.001 0.060 17.09 2.03 3.260 0.000 0.51 1.16 1.91 0.010 0.7 1.656 (fofe)2/fe 0.Arranging Observed & Expected Frequencies As Follows: Table 10.7 -1.064 1.061 0.000 0.310 0.014 0.380 0.490 1.243 0.7 0.510 0.120 0.9 0.510 0.09 2.004 0.064 -0.38 -1.380 1.06 1.49 -0.35 -0.51 0.7 -0.51 0.

Degree of freedom (D.293 Here ‫א‬2 cal < ‫א‬2 tab. Hence Ho is accepted As figure shows the sample Chi Square the value of 24.296 The value of ‫ א‬2 = 24.5 5 Lakh 5 to 10 Lakh 10 to 15 Lakh 15 to 25 More than 25 Lakh Total 0 0 1 0 0 0 3 2 0 0 0 1 0 0 0 0 0 0 0 0 0 0 4 3 3.5 to 5 More than 5 Total 0 1 0 5 1 2 0 0 0 0 1 8 34 .636 is within the acceptance region. Thus we accept the null hypothesis There is significant relation between income of a respondent and amount of Home loan Table 10.F. =26.) = (r-1) x (c-1) = 16 ‫א‬2 tab = (at 5 % confidence level)= 26.5 2.10 Other Banks Loan Amt Up to Income( in Lakh) Up to 1.5 to 3.5 to 2.5 1.636 ‫א‬2 tab.

5 2.000 0.057 Degree of freedom (D. 0.016 0.25 0 0 Fo-fe 0 0 0 0 0 0 0 0 0 0 0.000 0.000 0.000 0.13 0.000 0.75 0 0 (fofe)2 0.000 0.000 0.100 1.000 0.62 0.000 0.000 0.000 0.017 0.000 0.000 0.296 Here ‫א‬2 cal < ‫א‬2 tab.250 1.293 ‫א‬2 tab = (at 5 % confidence level)= 26.fo 0 0 0 0 0 0 0 0 0 0 1 3 0 0 0 0 2 1 0 0 0 0 1 0 0 fe 0 0 0 0 0 0 0 0 0 0 0.000 0.75 0 0 0.000 0.250 0.000 0.37 0.000 0.000 0.5 1 0 0 0. Hence Ho is accepted As figure shows the sample Chi Square the value of 5.000 5.000 0. Thus we accept the null hypothesis There is significant relation between income of a respondent and amount of Home loan 35 .250 0.000 0.500 0.063 0.000 0.057 ‫א‬2= Σ (O-E)2 E = 5.) = (r-1) x (c-1) = 16 The value of ‫ א‬2 = 5.87 0.62 0. =26.000 0.009 0.37 1.000 0.000 0.000 0.5 -1 0 0 -0.370 0.620 2.000 0.000 0.384 0. -0.F.25 0 0 -0.000 0.057 The value of ‫ א‬2 = 5.000 0.000 (fofe)2/fe 0.000 0.000 0.057 ‫א‬2 tab. 0.000 0.057 is within the acceptance region.563 0.137 0.5 0.083 0.

5 to 2.5 0 0 1 0 3.Housing Finance Companies Gruh Finance Table 10.5 to 5 More than 5 Total 0 1 5 to 10 Lakh 10 to 15 Lakh 15 to 25 Lakh More than 25 Total 0 0 4 0 0 1 3 2 0 0 0 0 0 0 0 0 0 1 9 1 0 4 2 8 0 0 1 1 3 14 36 .5 to 3.5 1.12 Loan Amt ‘ Income( in Lakh) Up to 5 Lakh Up to 1.5 2.

000 0.000 0.43 -2.280 3.14 0 0.79 (fofe)2 0.28 0.000 0.796 0.43 0 0.000 0.503 37 .624 (fofe)2/fe 0.078 2.078 0.000 0.64 2.000 0.071 -0.084 0.005 0.64 0.000 6.000 0.14 0 -0.580 0.005 0.071 -0.000 0.185 0.071 0.000 0.071 0.130 2.21 -0.000 0.000 0.13 fo 0 0 0 0 0 0 0 1 0 0 1 4 3 0 0 0 0 2 0 0 0 0 2 0 1 fe 0 0 0 0 0 0.21 fo-fe 0 0 0 0 0 0.64 0.000 0.071 -0.000 0.071 0.Arranging Observed & Expected Frequencies As Follows: Table 10.000 0.588 0.28 0.000 0.723 0.36 1.324 0.57 5.57 0 0.000 0.29 0 0.203 0.000 0.045 0.000 0.045 4.000 0.410 0.71 0 0.071 0.000 0.005 0.071 0.071 0.57 0 0.85 1.85 0.000 0.000 0.28 1.891 0.000 0.280 0.005 0.000 0.071 0.044 0.21 0.28 0.43 0 0.

38 . Thus we accept the null hypothesis .) = (r-1) x (c-1) = 16 The value of ‫ א‬2 = 6.There is significant relation between income of a respondent and amount of Home loan.293 Here ‫א‬2 cal < ‫א‬2 tab.‫א‬2= Σ (O-E)2 E = 6.F. =26.503 Degree of freedom (D. Hence Ho is accepted As figure shows the sample Chi Square the value of 6.503 ‫א‬2 tab = (at 5 % confidence level)= 26.293 ‫א‬2 tab.503 is within the acceptance region.503 The value of ‫ א‬2 = 6.

DHFL Table 10.000 0.040 0.000 0.000 0.000 0.6 0 0 0 0.5 2.2 -0.5 to 3.000 0.050 0.14 Loan Amt Up to Income( in Lakh) 5 Lakh Up to 1.6 0 0 0 0.360 0.033 .2 fo-fe 0.5 1 1 0 0 3.900 0.040 (fofe)2/fe 0.5 to 5 More than 5 Total 0 2 5 to 10 Lakh 10 to 15 Lakh 15 to 25 Lakh More than 25 Total 0 1 2 0 0 0 0 0 0 0 0 0 0 0 0 0 1 2 2 0 0 3 0 0 0 0 0 0 0 5 Arranging Observed & Expected Frequencies As Follows: Table 10.4 0.600 0.8 1.5 1.15 fo 1 0 0 0 0 1 1 fe 0.000 0.360 0.2 39 (fofe)2 0.5 to 2.6 -0.

000 0.000 0.000 0.000 0.000 0.000 0.917 is within the acceptance region.000 0.F.8 0.000 0.293 The value of ‫ א‬2 = 2. Thus we accept the null hypothesis There is significant relation between income of a respondent and amount of Home loan 40 .917 ‫א‬2= Σ (O-E)2 E = 2.000 0. =26.000 0.640 0.000 0.000 0.000 2.000 0.000 0.000 0.533 0.) = (r-1) x (c-1) = 16 ‫א‬2 tab = (at 5 % confidence level)= 26.000 0.000 0.000 0.000 0.0 0 0 0 2 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0.000 0.917 The value of ‫ א‬2 = 2.917 Degree of freedom (D.000 0.000 0.8 1.000 0.640 0. ‫א‬2 tab.917 Here ‫א‬2 cal < ‫א‬2 tab.000 0.000 0.800 0.8 0 0 0 0 0 0 0 0 0 0 0 0 0 0.293 Ho is accepted As figure shows the sample Chi Square the value of 2.000 0.2 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 -0.000 0.000 0.000 0.000 0.000 0.

000 0.000 .230 0.000 0.221 0.LIC Housing Finance Table 10.5 0 3 5 4 0 0 2 0 0 0 0 0 0 0 0 0 0 3 7 4 1 16 3 3 1 0 0 0 5 19 Arranging Observed & Expected Frequencies As Follows: Table 10.5 to 2.5 1.000 0.091 0.000 0.000 0.000 0.000 0.5 to 5 More than 5 Total 0 0 5 to 10 Lakh 10 to 15 Lakh 15 to 25 Lakh More than 25 Total Up to 1.47 0 0 0 41 (fofe)2 0.16 Loan Amt Up to Income( in Lakh) 5 Lakh 0 0 0 0 3.000 0.000 0.000 0.52 0.48 -0.000 0.5 to 3.000 (fofe)2/fe 0.47 0 0 0 fo-fe 0 0 0 0 0 0 0.5 2.000 0.000 0.000 0.000 0.17 fo 0 0 0 0 0 0 3 0 0 0 0 fe 0 0 0 0 0 0 2.470 0.000 0.

63 0 0 0 4.000 0.000 0.000 0 0.122 0.000 0.296 Here ‫א‬2 cal < ‫א‬2 tab.5 2 0 0 0 4 0 0 0 0 1 3 1 0 5.000 0.953 is within the acceptance region.63 0.953 The value of ‫ א‬2 = 10.304 2.36 0.137 0.000 0.22 4.000 0.000 2. Thus we accept the null hypothesis There is significant relation between income of a respondent and amount of Home loan 42 .000 0 0.F.9 0.000 -3.953 Degree of freedom (D.78 0 0 -0.000 0.000 0 0. Hence Ho is accepted As figure shows the sample Chi Square the value of 10.000 0.64 0.000 0 0.928 1 1.953 ‫ א‬2 = Σ (O-E)2 E = 10.21 0.1 0 0 0 3.21 10.410 -0.397 0 0.318 0.448 6.630 0.000 10.810 0.9 0.810 0 0.736 0.9 1.) = (r-1) x (c-1) = 16 ‫א‬2 tab = (at 5 % confidence level)= 26.000 0 0.

5 25 106.5 12.5 37.5 20 12.5 53. 100 53.25 400 156.5 12.063 9.5 20 7.25 .063 25.25 3 3 2 2 4.063 9.000 4.25 3 2 2 Y 7.25 625 156.5 7.Correlation Analysis The coefficient of correlation is the second measure that we can use to describe how well one variable is explained by another.000 4.063 9.25 25 25 400 400 156.000 y2 56. When we are dealing with samples.000 4.25 3 3 2 4.25 56.5 7.000 4.5 25 12.25 156.25 5 4.25 156.000 9.5 15 85 37.25 156.063 25.5 37.5 12.000 9.5 12.063 18.000 18.25 400 156.25 400 56.25 156.25 56.000 18.5 15 25 43 x2 18.063 9. sample coefficient of relation is denoted by r and is the square root of sample coefficient of determination.5 x*y 31.5 22.5 10 10 85 85 37.25 37.25 3 2 3 3 2 4.18 X 4.5 12. SBI Table 10.25 4.5 5 5 20 20 12. 60 15 37.5 7.000 18.000 18.25 5 4.000 18.000 4.000 4.25 156.25 156.25 156.875 62.000 9.5 20 12.000 4.25 56.5 12. Here we have used r to study the relation between income of respondents and the home loan amount.000 9.5 12.

474 r = 0.25 12.16)(12.5.3.5 15 4.25 7.17.500 5481.000 400 5 5 1.5.39 a = ȳ .bẍ = 1.17) 346.000 56.689 44 .25 377.25 ∑x =98.5.5 53.42 r2 = =12.5 1317.5 9.25 7.31(3.5. ∑xy=1317.n ȳ2 = 0.nȳ2 ∑y2 .000 25 7. ∑x2=346.5 15 4.25 20 100 25.17 b=∑xy-n ẍȳ ∑x2 -.063 156.000 56.000 56.16)^2 b= 3.16 ȳ= 12.5 22.5 346.25 5 1 2 3 98 7. ∑y2= 5481.25 ẍ= 3.5 9.5. 18.nẍ2 ∑y=377.4(3.2 3 4. 1317.31( 3.16) a ∑y + b∑ xy .5 22.000 56.

5 9 56.25 4.112 r = 0.875 18.25 22.5 xy x2 y2 22.25 37.5 7.25 3 3 3 57.25 r2 = a ∑y + b∑ xy .Here the sign for r is positive.5 12.25 22.5 9 156.875 18.75 y 7.25 15 4 56. This shows that amount of home loan is more dependent on income of respondents.0625 56.5 177.5 7.5 7.25 15 9 25 22.1875 1881.25 22.n ȳ2 = 0.5 7.25 559.25 25 4 156.5 9 56.nȳ2 ∑y2 .5 12.19 x 3 3 3 3 3 3 2 2 2 1 5 3 4.5 7. Thus.5 9 56.25 7.375 191.25 31.25 22.336 Here the sign for r is positive.5 7. ICICI Table 10.0625 56.5 9 56.25 22.5 9 156.5 9 56.5 12.5 9 56.25 3 4.0625 156. This shows that amount of home loan is more dependent on income of respondents. Thus.25 100 25 400 22.5 7.25 25 4 156.25 53.5 7.5 7.25 31.5 12.5 9 56. the relation between the two variables is direct. 45 .5 9 56.5 20 7.5 12.5 5 7. the relation between the two variables is direct.25 37.5 1 56. 18.

5 37.5 5 12.25 y 5 12.5 12.25 156.20 X 3 4.25 56.5 15 25 784. 31.5 12.5 12.5 37.5 247.25 25 25 25 156.25 r2 = a ∑y + b∑ xy .5 37.25 4.5 12.nȳ2 ∑y2 .0625 18.5 5 12.25 25 156.5 37.27 Here the sign for r is positive.5 37.0625 4 25 4 4 4 9 4 9 18.25 156.25 4.25 156.5 12.5 12. 10 62.3 y2 25 156. the relation between the two variables is direct.5 7.5 5 5 5 12.25 25 25 25 156.0625 18.n ȳ2 = 0. 15 15 15 37. 46 .25 156.5 12.25 2 5 2 2 2 3 2 3 4.0625 9 9 9 9 9 9 9 9 9 9 9 4 265.0729 r = 0.5 15 25 25 15 10 15 53.25 3 3 3 3 3 3 3 3 3 3 3 2 80.25 156. This shows that amount of home loan is more dependent on income of respondents.0625 18.25 156.875 53.25 25 156. 53.25 4.25 156.25 156.25 156.5 5 5 5 12.HDFC Table 10.25 2681. Thus.5 37.5 12.5 12.5 12.25 156.5 xy 15 53.25 56.5 7.375 x2 9 18.

5 9 56.25 22.0625 56. Thus.5 xy x2 y2 15 9 25 31.5 7.875 18.25 31. This shows that amount of home loan is more dependent on income of respondents.5 25 156.n ȳ2 = 0.75 r2 = a ∑y + b∑ xy .625 115. 47 .25 29.0625 56.5 12.1875 518.484 r=0.5 62.25 22.875 18.5 7.nȳ2 ∑y2 .5 7.25 3 5 3 4.0625 56.5 9 56.696 Here the sign for r is positive.5 9 56.25 62.25 3 4.75 y 5 7.875 18.Other Banks Table 10.25 240.25 31.5 7.5 7.25 22. the relation between the two variables is direct.21 x 3 4.

5 22.5 22.5 62.25 56.5 7.5 5 7.5 25 15 22.5 583. x2 9 9 25 9 25 9 18.25 156. the relation between the two variables is direct.5 12.5 62.5 37.5 53.287 r = 0.5 7.536 Here the sign for r is positive. Thus.25 2 r2 = a ∑y + b∑ xy .22 x 3 3 5 3 5 3 4.5 160 xy 37.25 156. 48 .5 12. 22.25 56.0625 y2 156.5 12.25 156.Housing Finance Companies Gruh Finance Table 10.25 156.0625 9 25 4 9 9 9 9 178.5 7.25 y 12.nȳ2 ∑y2 .25 156.25 3 5 2 3 3 3 3 48.5 12.5 37.25 156.5 37.25 625 156.25 56.5 12. This shows that amount of home loan is more dependent on income of respondents.25 25 56.n ȳ2 = 0.5 12.5 25 12.

063 9.5 156.5 56.5 56.000 25.000 4.063 18.25 7.25 22.5 56.000 281.000 25.875 4.5 56.5 2 5 25 10 5 12.5 1368.25 31.063 18.000 4.25 157.5 56.25 31.5 2 7.000 9.5 156.5 4.000 18.nȳ2 ∑y2 .875 3 12.000 4.25 31.n ȳ2 r =0.25 15 70.000 18.25 62.5 3 7.000 25.25 15 3 7.5 5 7.25 37.875 3 7.5 56.063 9.5 56.5 5 7.25 7.LIC Housing Finance Table 10.25 37.5 4.24 = 0.313 b=∑xy-n ẍȳ r2 = a ∑y + b∑ xy .000 9.875 3 7.5 56.5 56.25 37.5 56.5 56.25 7.0576 Here the sign for r is positive.5 56.000 18.23 x Y y2 xy 5 7.5 56.25 37.875 x2 25.5 56.25 22. the relation between the two variables is direct.5 4.75 581.063 9.25 7.875 4.25 31.5 56.25 22. This shows that amount of home loan is more dependent on income of respondents.000 25.5 5 7.5 3 5 25 15 2 7.25 7. Thus. 49 .25 37.25 31.25 22.000 9.

50 .5 5 32. Thus.25 25 218.n ȳ2 = 0.5 22.5 10 75 x2 4 1 9 9 4 27 y2 56.nȳ2 ∑y2 .25 56.5 xy 15 5 22.5 7.24 x 2 1 3 3 2 11 y 7.DHFL Table 10.75 r2 = a ∑y + b∑ xy . the relation between the two variables is direct.582 r =0.25 25 56.5 5 7. This shows that amount of home loan is more dependent on income of respondents.763 Here the sign for r is positive.

51 .

52 .  Banks capture 67% of our sample and 33% of people go for Housing Finance companies.  36 % have chosen SBI which is highest amongst the group.  47 % have chosen LIC Housing Finance which is highest amongst the group.  Currently 30 % of people are paying Floating Interest Rate from 9% to 11% and 5 % are paying Floating Interest Rate between 11% to 13%. Only 2% out of the sample of 125 has chosen Land Loans.  At the time of Disbursement 55 % of people were paying Floating Interest Rate more than 13% and 39 % of people were paying Floating Interest rate ranging from 11% to 13%. which is 42 % and 32 % respectively.  40 % of people go for the Home Loan ranging from 5 Lakh to 10 Lakh.  50 Individuals have given average rating and 47 Individuals are satisfied with the Time Duration for Loan Sanctioning. which ranges from less than 5 Lakh to 15 Lakh.  38 % of people prefer the time duration of 10 years to 15 years to pay home loan.11.5 Lakh to 5 Lakh.  67 Individuals have given average rating to Processing Fees.  55 Individuals have given average rating and 38 Individuals are satisfied with the Ease Of Documentation.  36 % of people pay fixed rate of interest which is more than 13%. HDFC stands at the second position with 31 %. Gruh Finance is having the second largest portion of 34 %. are having the income range of 2.  53 Individuals have given average rating to Interest rate charges and 28 Individuals are dissatisfied. Most of the people going for the loan. Findings  Maximum number of people prefers the Home Loan for First Purchase in Ready Construction and Under Construction property.  64 % of people go for Floating rate of interest.

 46 % of people are having income between 2.  91% of the sample are Male and 9 % are Female  55 % of the sample is having Graduation and 39 % is having Post Graduation as their Educational Qualification.5 Lakh and 22 % are having income between 3. 53 .  31 % of people are private employees.  14 Individuals are having Home Loan with Insurance Cover.5 Lakh to 5 Lakh.  17 people are willing to transfer their loan.5 Lakh to 3. 43 Individuals which is of the 125 respondents have given average rating to charges for late payments and 16 are dissatisfied .  60 people have taken suggestion from their friends and relatives for Home Loan to approach the Home Loan Provider. 37 % of people are Businessman/woman 21 % of people are professional and 11 % are Government employees.  13 Individual are willing for the prepayment of the Home Loaan.

54 .

Recession in the Indian economy and different steps taken by the RBI for the recovery of the same is having the positive impact on the floating rates of interest in Home Loan. 55 . Above mentioned factors affect this sector positively or adversely but one of the major factors which is helping this sector to grow is rapidly increased population and people are accepting this as a need rather than a financial burden. Popularity of Floating rate of interest is more compared to fixed rate of interest due to flexibility according to economic condition Main purpose of Housing Finance Companies is to provide Home Loan but still people are more inclined to go for a Bank when it comes to taking a Home Loan. rather than believing it as a risk cover people are taking it as an additional burden on their ongoing EMIs. Majority of population of India consist of middle class people. This Housing survey reflects the same fact that it is dominated by the middle class people when it comes to take the Home loan. Conclusion The Government of India and the Reserve Bank of India have been constantly providing an enabling environment for the furtherance and development of the housing finance sector and Two Million Housing Programs which are being monitored annually by the Ministry of Urban Affairs and Poverty Alleviation. Concept of insurance with Home Loan is not much popular in Home Loan takers. To give the boost to the economy and to control the money supply in the market RBI has reduced the interest rates for home loans. Reason for dissatisfaction among the Home Loan taker is high fixed interest rate which is paid by these people so they are more willing for prepayment and transfer of Home Loan.12.

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