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A PROJECT REPORT

ON

“A STUDY OF HOME LOAN IN HDFC BANK”

Submitted in partial fulfillment of the requirements

for the award of the degree

MASTER OF BUSINESS ADMINISTRATION

to

Guru Gobind Singh Indraprastha University, Delhi

Under the Guidance of Submitted by:

Dr. Ajay Pratap Singh Chirag Chauhan
(Prof. TIAS) MBA-IV Sem, (Ist Shift)
Enrollment No.: 0211700391

Session :2016-2018

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DECLARATION

I hereby declare that the project work entitled “A STUDY OF HOME LOAN IN HDFC

BANK” is a record of an original work done by me and this project work is

submitted in the partial fulfillment of the requirements for the award of the degree of

Master of Business Administration. The project has not been submitted to any other

University or Institute for the award of any degree or diploma.

Date:

Place:
CHIRAG CHAUHAN
Roll NO. 02117003916
MBA 4th Sem. (1st Shift)

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ACKNOWLEDGEMENT

I express my sincere gratitude and extend whole-hearted thanks to my Research Project

Guide Dr. Ajay Pratap Singh (Faculty) for her valuable guidance and encouragement

throughout the entire research work. I would like thank to, Mr. Adarsh Sharma (Finance

Manager) for their immense support during the research period.

CHIRAG CHAUHAN
MBA 4th Sem. (1st Shift)

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TABLE OF CONTENTS

S.No Topic Page no

1 Introduction 6-17

2 Company profile 18-33

3 Objective of study 34-35

4 Importance of study 36-37

5 Review of literature 38-41

6 Research methodology 42-47

7 Analysis and data collection 48-72

8 Conclusion 73-74

09 Recommendation and suggestion 75-77

10 Findings 78-79

11 Future scope of the study 80-81

12 Bibliography 82-85

13 Questionnaire 86-91

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INTRODUCTION TO HOME LOANS

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Home is a dream of a person that shows the quantity of efforts, sacrifices luxuries and

above all gathering funds little by little to afford one’s dream.Home is one of the things

That everyone one wants to own. Home is a shelter to person where he rests and feels

comfortable. Many banks providing home loans whether commercial banks or financial

institutions to the people who want to have a home.

HDFC-(Housing Development And Finance Corporation) Home Loan, India have been

serving the people for around three decades and providing various housing loan according

to their varied needs at attractive & reasonable interest rates. Owing to their wide network

of financing, HDFC Housing Loans provides services at your doorstep and helps you find a

home as per your requirements.

Many banks are providing home loans at cheapest rate to attract consumers towards them.

The more customer friendly attitude of these banks, currently offer to consumers cheapest

loan over homes.

With the RBI reducing bank rate, the home loan market rates nose-diving by 50 basis

points. The HDFC Bank and Standard chartered bank has become the first player in this

sector to announce a housing loan for a 20 years period.

HDFC also provides with Home Improvement Loan for internal and external repairs and

other structural improvements like painting, waterproofing, plumbing and electric works,

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tiling and flooring, grills and aluminium windows. HDFC finances up to 85% of the cost of

renovation (100% for existing customers).

Current status is that HDFC reduced home loan rates by 50 basis points for all its existing

floating rate customers.

1.1 ADVANTAGES OF HOME LOAN:-

Attractive interest rate:-

The various banks offer attractive interest rates to boost and help their customers.

Many banks provide loans on fixed or floating rates to facilitate consumers as per their

needs.

Help in owning a home:-

The home availed by a person with the help of banks, because they provide technical and

financial assistance to customers for owning their dream home.

No requirement of guarantor:-

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The commercial banks now a day, liberlise their laws regarding home loans. Some of banks

don’t even require the guarantor to grant loan to their consumers. They also make

consumers free by reliving him to find a guarantor to complete the proceedings of availing

loan.

Door-Step Services:-

These doors to step services are provided from enquiry stage to the final disbursement

takes place such services are beneficial for customers in present busy life. Banks like ICICI

bank and standard chartered bank provide door to step services to customers to borrow

loan.

Loan period:-

There are many banks which provide maximum loan tenures upto 15-20 years based on the

loan amount and the creatibility of customers. This relieves the customers to repay loan

amount till a long period.

For accidental death insurance:-

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Some banks provide free accidental death insurance with housing loan which is also

beneficial for the customers.

These benefits or advantages of home loans are responsible for making than so popular

among customer that a person who doesn’t have their home and want to buy, they do it with

home loan. Home loans help such persons in making their dream home.

1.2 DISADVANTAGES OF HOME LOANS:-

The main disadvantages of home loans are high lightened as below:

(1) Delays in processing:-

Many times, there are huge delays in processing of providing home loans because various

formulations to be fulfilled in this process. Due to these delays customers feel mentally as

well as financially weak.

(ii) Fluctuating interest rates :-

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Some banks give home loans at floating rates, which fluctuate at Different intervals due to

some reasons. These changes sometimes, may lead to increase in interest rate which will

increase the cost of home loans to the customers

(iii) High Cost:-

The public sector banks charge high processing cost for home loan’s sanctioning. They are

forced to pay serious charges at various stages to fulfill the requirements. Some consumers

are not able to pay such charges so such people could not avail the benefits of home loan

schemes.

(iii) Problems in disbursement:-

There are many problems in disbursement of home loan amount. There are some delays in

disbursement of loan amount to the customers due to legal formalities. This causes

problems to the customers.

These are limitations or disadvantages of home loans. But some times some banks charges

high installments to repay loan amount. Such also causes problem to customers. These

limitations can be removed by providing good and promote services to the customers.

1.3 DISBURSEMENT OF HOME LOANS:-

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Terms & conditions:-

a) Rate of interest = 8.40%-8.95% or 10.15%-10.45% ( R.B.I )

b) Time period = 10 – 20 years

c) Limit = minimum 5 lacks.

Maximum 500 cr. Or above

Some questions asked by the customers:-

d) Location = NCR OR DELHI [ Area are authorized by G.D.A]

e) Registery

f)Passing map

g) Marketing value of property

Conditions regarding co-applicants: -

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All Housing Finance Institutions lay down conditions on who can be co-applicants. All co-

owners to the property. Need to be co-applicants to the loan necessarily. These institutions

do not permit minors to join in as either coowner or as co-applicants because a minor is not

eligible to enter into a contact as per law. They do not permit even friends or relatives who

are not blood relatives to take a property jointly.However, Income of co-applicants can be

clubbed together to get higher loan eligibility. Given below is a Table that throws light on

acceptable relationship of a co-applicant for clubbing of income.

Income Clubbing of Co-applicants:- It is as follows:-

Combination Income Clubbing: -

 Husband-Wife: - Income of husband-wife can be clubbed.

 Parent - son: - It can be clubbed if only son is there but not if any male sibling exists.

 Brother-Brother: - If they are currently staying together and intend to stay together in

the new property, then only, their income-can be clubbed for above purposes.

 Brother-Sister: - No clubbing-is possible.

 Sister-Sister: - No clubbing is possible.

 Parent-Minor- Child: - No clubbing is possible in this case also.

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a) The income of the salaried individual is considered in the following manner:-

Gross monthly income as it appears on the salary slip

Less:- Any non regular variable income appearing on the salary slip (including overtime,

etc.)

Add: - 50 per cent of the average variable income of the last six months.

Add: - Any fixed cash/voucher payments for which proof can be submitted.

Add: - 50 per cent of the average variable cash/voucher payments with proof like traveling

reimbursement etc.

Add: - HRA receivable if not being received already in the salary slip.

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Average of the net profits of last 2 years as it appears in the profit and loss account (Returns

need to be filed for the same. They should be filed regularly before the due date is over).

Less: - Any income, which is unusual and non-recurring in nature like sale of some asset,

etc which affects profits substantially,

Add: - Any expense that is unusual and non-recurring in nature like repairs and

maintenance that has not been capitalized and effect profit adversely.

Add: - 50 per cent of the average depreciation of the last two years. The above income is

calculated for the calculation of eligibility using IIR and FOIR norms.

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CUSTOMER PROFILE

Documents:-

If customer is self employed:-

A) I.D PROOF:-

-pan card
-driving license
-voter i.d card

B) ADDRESS PROOF:-

-Aadharcard
-pass book
-Electricity bill
-telephone bill ( landline/ postpaid)
-rashan card
-rent agreement ( if customer are live in rent)

C) BUSINESS PROOF :-

-visiting card
-compay profile
-letter head

D) BANK STATEMENT:-

-LAST 6 MNTH BANK STATEMENTS ( UPDATE )

-COMPUTATION P&L A/C , BALANCE SHEET

E) INCOME TAX RETURN :-

- LAST 3 YRS . SALARY SLIP

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2 PHOTOS / PROPERTY CHAIN PAPER

IF CUSTOMER IS SALARY BASED :-

A) I.D PROOF :-

-PAN CARD
-DRIVING LICENSE
-3YRS . SALARY SLIP
-JOINING LETTER
- OFFER LETTER + RELEVANT LETTER

B) ADDRESS PROOF :-

(SAME AS )

C) BANK STATEMENT :-

(SAME AS )

D) INCOME PROOF :-

- SALARY SLIP
- FORM 16

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COMPANY PROFILE

OF

HDFC HOSING DEVELOPMENT FINANCE CORPORATION LTD

6.1 INTRODUCTION:-

Housing Development Finance Corporation Limited , founded 1977 by Ravi Maurya

and Hasmukhbhai Parekh, is an Indian NBFC, focusing on home mortgages. HDFC's

distribution network spans 243 outlets that include 49 offices of HDFC's distribution

company, HDFC Sales Private Limited. In addition, HDFC covers over 90 locations

through its outreach programmes. HDFC's marketing efforts continue to be concentrated on

developing a stronger distribution network. Home loans are also Sharcket through HDFC

Sales, HDFC Bank Limited and other third party Direct Selling Agents (DSA).

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HDFC Incorporated in 1977 with a share capital of Rs 10 Crores, HDFC has since emerged

as the largest residential mortgage finance institution in the country. The corporation has

had a series of share issues raising its capital to Rs. 119 Crores. The gross premium income

for the year ending March 31, 2014 stood at Rs. 2,856 Crores and new business premium

income at Rs. 1,624 Crores. The company has covered over 8, 77,000 lives year ending

March 31, 2014.

HDFC operates through almost 450 locations throughout the country with its corporate

head quarters in Mumbai, India. HDFC also has an International Office in Dubai, UAE

with service associates in Kuwait, Oman and Qatar. HDFC is the largest housing company

in India for the last 35 years.

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SNAPSHOT-I

 Incorporated in 1977 as the first specialized Mortgage Company in India.

 Almost 90% of initial shareholding in the hands of domestic institutes and retail

investors. Current 77% of shares held by foreign institutional investors.

 Besides the core business of mortgage HDFC has evolved into a financial

conglomerate with holdings In:

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CHART:- 6.2

HDFC
LTD

23.26%
72.26% 60%
HDFC
HDFC HDFC
BANK (inclusive
STANDARD ASSET
of warrants)
LIFE MANAGEMENT

 HDFC Standard Life insurance Company- HDFC holds 72.26 %.

 HDFC Asset Management Company – HDFC holds 60%

 HDFC Bank- HDFC holds 23.26%.

 Intelenet Global (Business Process Outsourcing) – HDFC holds 50%.

 HDFC Chubb General Insurance Company – HDFC holds 74%.

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SNAPSHOT-II

 Loan Approvals Rs. 805 billion.

(Up to Dec 2017) (US $ 18.30 billion.)
 Loan Disbursements Rs.669 billion
(Up to Dec. 2017) (US $ 15.20 billion)
 Housing Units financed 2.5 million.
 Distribution
 Offices 181
 Outreach Programs 90

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HDFC Limited
jjjjjjjj

Type Public (BSE: 500010)

Founded 1977
Headquarters Mumbai,India
Ravi Maurya
Key people
Hasmukhbhai Parekh
Industry Housing Finance
Revenue US$ 1.49 billion (2008)
Employees 1,029
Website www.hdfc.com

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KEY EXECUTIVE HDFC HOUSING DEVELOPMENT FINANCE CORP LTD :-

Mr. Deepak S Parekh: - serves as Executive Chairman and Chief Executive Officer of the

Board of Housing Development Finance Corp. Ltd., (HDFC). He joined HDFC Limited in

a senior management position in 1978. He was inducted as a whole-time director of HDFC

Limited in 1985 and was appointed as its Executive Chairman in 1993. He is the Chief

Executive Officer of HDFC Limited. Mr. Parekh is a Fellow of the Institute of Chartered

Accountants (England & Wales).

Mr. K.M Mistry: - The Managing Director of the Corporation. He has been employed with

the Corporation since 1981 and was the executive director of the Corporation since 1993.

He was appointed as the deputy managing director in 1999 and the Managing Director in

2000. He is also a member of the Investors’ Grievance Committee of Directors.

Ms. Renu S. Karnad: - The Executive Director of the Corporation. She has been

employed with the Corporation since 1978 and was appointed as the Executive Director of

the Corporation in 2000. She is responsible for overseeing all aspects of lending operations

of HDFC.New Delhi.

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BOARD OF DIRECTORS:-

Mr. D S Parekh - Chairman Mr. D N Ghosh

Mr. Keshub Mahindra - Vice Chairman Dr. S A Dave

Ms. Renu S. Karnad - Executive Director Mr. S Venkitaramanan

Mr. K M Mistry - Managing Director Dr. Ram S Tarneja

Mr. Shirish B Patel Mr. N M Munjee

Mr. B S Mehta Mr. D M Satwalekar

GROUP COMPANIES:-

 HDFC Bank: World Class Indian Bank- among the top private banks in India.

 HDFC AMC: One of the top 3 AMCs in India- Preferred investment manager.

 Intelenet Global: BPO services for international customers.

 CIBIL: Credit Information Bureau India Limited.

 HDFC Chubb: Upcoming Private companies in the field of General Insurance.

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6.3 JOINT VENTURE

HDFC Standard Life Insurance Company Limited was one of the first companies to be

granted license by the IRDA to operate in life insurance sector. Reach of the JV player is

highly rated and been conferred with many awards. HDFC is rated ‘AAA’ by both CRISIL

and ICRA. Similarly, Standard Life is rated ‘AAA’ both by Moody’s and Standard and

Poor’s. These reflect the efficiency with which HDFC and Standard Life manage their asset

base of Rs. 15,000 Cr and Rs. 600,000 Cr. respectively.

HDFC Standard Life Insurance Company Ltd was incorporated on 14 th August 2000.

HDFC is the majority stakeholder in the insurance JV with 81.4% staple and Standard of as

a staple 18.6% Mr. Deepak Satwalekar is the MD and CEO of the venture.

HDFC Standard Life Insurance Company Ltd. Is one of India’s leading Private Life

Insurance Companies, which offers a range of individual and group insurance solutions? It

is a joint venture between Housing Development Finance Corporation Limited (HDFC

Ltd.) India’s leading housing finance institution and the Standard Life Assurance Company,

a leading provider of financial services from the United Kingdom. Both the promoters are

will known for their ethical dealings and financial strength and are thus committed to being

a long-term player in the life insurance industry- all important factors to consider when

choosing your insurer.

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Business Growth:-

The company commands a market share of over 60% in the housing finance sector.

Leveraging on its brand equity HDFC has also entered the Indian Mutual Fund scene quite

recently. HDFC was the only applicant to be given clearance by the government, to enter

the Rs 250 bn life insurance business. This in itself speaks volumes about the

management’s professional reputation.

Financial year 2000 proved to be a boon for housing finance companies, as the tax benefits

announced in the budget, coupled with the low real estate prices and rising disposable

incomes, spurred housing demand. As a result, demand for housing finance too has

registered high rates of growth. The housing sector has now been recognized as an engine

of economic growth and HDFC is well placed to capitalise on this surge in demand.

Against this backdrop, HDFC logged in an excellent performance. The company’s

approvals and disbursements during the first half of financial year 2001 witnessed a year on

year growth of 33% and 32% respectively. The robust growth in itself is a conclusion that

HDFC’s business is far less susceptible to any economy downturn.

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(TABLE:-6.2) Financial Snapshot

Growth ratios FY15 FY16 FY17 1HFY18

Operating income 13.7% 21.6% 15.2% 21.1%

Other income 331.7% -24.6% -54.0% 346.8%

Net profits 18.3% 13.8% 20.4% 19.8%

Approvals 28.9% 25.2% 30.3% 33.4%

Disbursements 31.1% 24.4% 31.2% 31.5%

% change compared to corresponding previous period The entry of new players has not in

any way significantly reduced HDFC’s domination in terms of volume. However, the

increased competition has led to a decline in interest spread (the difference between interest

income earned and interest paid). Over the last couple of years HDFC’s spread has shrunk

from 2.1% in financial year 1997 to 1.8% in financial year 2000. When it comes to

containing risk, the company’s track record is among the best in the financial sector.

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During the financial year 2017, HDFC has reduced the quantum of loans where payment

was in arrears to just 0.9% of its portfolio. This is because individuals account for nearly

70% of its total outstanding loans. The high level of an individual investor’s personal

contribution in a house makes the possibility of default less likely.

In keeping with its tradition of playing safe, HDFC is diversifying its business. The

company has chosen the acquisition route to increase its assets and customer base in its

core business of housing finance. Its recent acquisition of Home Trust Housing Finance and

Gruh Finance will not only increase its size but will also bring the economies of scale.

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BUSINESS OBJECTIVES:- The primary objective of HDFC is to enhance residential

housing stock in the country through the provision of housing finance in a systematic and

professional manner, and to promote home ownership.

Another objective is to increase the flow of resources to the housing sector by integrating

the housing finance sector with the overall domestic financial markets.

ORGANISATIONAL GOALS:- HDFC’s main goals are to :-

a) develop close relationships with individual households,

b) maintain its position as the premier housing finance institution in the country,

c) transform ideas into viable and creative solutions,

d) provide consistently high returns to shareholders, and

e) to grow through diversification by leveraging off existing client base.

In addition to home building loans, HDFC also offers home extension, home improvement

and home conversion loans. It also helps to identify and value properties. HDFC also offers

depository services in form of term deposits.

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TABLE:-6.5
CONSOLIDATED EARNINGS:-
(As at March 31, 2017)

HDFC consolidated

Return on Equity 27.8% 28.2%

Return on Average Assets 2.7% 2.7%

Earnings per share (Rs) 85 95

Profit after Tax (Rs in billion) 24.36 27.13

Total Assets (Rs in billion) 810.99 925.83

DISTRIBUTION NETWORK: - HDFC’s distribution network spans 254 outlets that

include 54 offices of HDFC’s distribution company, HDFC Sales Private Limited (HSPL).

In addition, HDFC covers over 90 locations through its outreach programmes. Distribution

channels form an integral part of the distribution network with home loans being

distributed through HSPL, HDFC Bank Limited and other third party direct selling

associates.

To cater to non-resident Indians, HDFC has offices in London and Dubai and service

associates in Kuwait, Oman, Qatar, Sharjah, Abu Dhabi and Al Khobar, Jeddah and Riyadh

in Saudi Arabia.

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HDFC HOME LOAN ADVANTAGE :-

 Home loan counselling sharing over 30 years of home loan experience

 Door step service

 Helps in finding Dream home

 Wide Product Range

 Multiple Repayment Option

 Wide Network of financing

 Post disbursement service

 Loan repayment option

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OBJECTIVES OF STUDY

There is no strongest foundation for your dream home, than a cheap loan. Home loans have

become those stronger foundations for people who want to own a home. The main

objectives of the study are as follows:-

1) The main objective of this study is to know the Customers perceptions about home loans

of HDFC housing development finance corporation LTD.

2) Generating good business to the company by promoting and selling the products of

HDFC LTD.

3) To study the problems faced by customers in obtaining the home loans.

4) Visiting the customers and closing the deal.

5) To learn about various aspect of hdfc home loan ltd.

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IMPORTANCE OF THE STUDY

The main purpose of this study is to attain the knowledge of the processing system of home

loans. The main purpose of the study is as follows:-

 To know the ideas of customers about home loan products and services.

 To study the satisfaction level of customers about home loans.

 To study the problems faced by customers in obtaining the home loans.

 To learn about various aspect of HDFC home loan ltd.

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REVIEW OF LITERATURE

4.1 SUMMARY:-

• After going through previous studies of Home loans I came to conclude that-

• There is growth of home loans after 2008.

• Home loans have an inverse relation with interest rates i.e. when interest rate low the

demand of home loans increase. (Ojha 1987)

• People are going more towards home loans than private mortgage insurance. (Bernstein

2008)

• Government taking various steps to encourage people to go toward home loans. (Haavio,

Kauppi 2000)

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 Growth of home loans are due to increase of living standard of people, shifting

from joint family to nuclear family .(Lacourr, Micheal 2007)

 There are some problems also attach with these home loans such as time i.e filling

of application of loan to closing ,people have their own specified needs from these

home loans which are not fulfilling. (Lacour Micheal 2006).

 SBI provide a very low interest rate on home loans as compared to other banks.

(SBI May 2000)

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4.2 Now after this conclusion the details of reviews are below-

Burstein David (2009) examined in his study taken from 2001 to 2008 that in this period

there is increase use of home loans as compared to private mortgage insurance (PMI).he

have divided his study into four sections. Section 1 describes why people are going more

for home loans than PMI. the main reason for this that now home loans market provide

Piggybank loans for those people who don’t have 20% of down payment. Section 2 tells

the factors responsible for the growth of home loans and the risks on shifting toward home

equity market without any PMI coverage. PMI can protect lenders from most losses up to

80% of LTV and the absence of PMI will result in considerable losses in an environment.

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RESEARCH METHODOLOGY:-

Research methodology is a way to systematically show the research problem. It may be

understood as a science of studying how research is done scientifically. It is necessary for

the researcher to know not only the research methods but also the methodology.

This Section includes the methodology which includes. The research design, objectives of

study, scope of study along with research methodology and limitations of study etc.

 To know the Customers perceptions about home loans of HDFC housing

development finance corporation LTD.

 To study the satisfaction level of customers about home loans.

 To study the problems faced by customers in obtaining the home loans.

 To make comparative study of disbursement of home loans by commercial banks,

 The study shall be conducted in the manner enumerated below-

3.1- RESEARCH DESIGN:-

This project is based on exploratory study as well descriptive study. It was an exploratory

study when the customer satisfaction level was studied to suggest new methods to improve

the services of HDFC LTD in providing home loans and it was descriptive study when

detailed study was made for comparison of disbursement of home loans by commercial

banks.

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3.2 – SOURCES OF DATA :-

To fulfill the information need of the study. The data is collected from primary as well as

secondary sources-

A - PRIMARY SOURCE:-

I decided primary data collection method because our study nature does not permit to apply

observational method.

In survey approach we had selected a questionnaire method for taking a customer view

because it is feasible from the point of view of our subject & survey purpose. We conducted

100 sample of survey in our project to judge the satisfaction level of customers which took

home loans.

• Sample size;-

For the questionnaire I have taken the sample size of 100 customers of HDFC LTD.

B – SECONDARY SOURCE:-

It was collected from internal sources. The secondary data was collected on the basis of

organizational file, official records, news papers, magazines, management books, preserved

information in the company’s database and website of the company.

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3.3- SAMPLING:-

Sampling refers to the method of selecting a sample from a given universe with a view to

draw conclusions about that universe. A sample is a representative of the universe selected

for study.

3.4 SAMPLE SIZE :-

Large sample gives reliable result than small sample. However, it is not feasible to target

entire population or even a substantial portion to achieve a reliable result. So, in this aspect

selecting the sample to study is known as sample size. Hence, for my project my sample

size was 100.

The Sample Size consists of both the Professional and Business class people. IT peoples,

Doctors, Jewelers, Timber Merchants & Real estate Agents are taken as Sample.

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3.5 SAMPLING TECHNIQUE:-

Random sampling technique was used in the survey conducted.

3.6 TOOLS OF ANALYSIS:-

Data has been presented with the help of bar graph, pie charts, line graphs etc.

3.7 PLAN OF ANALYSIS:-

Tables were used for the analysis of the collected data. The data is also neatly presented

with the help of statistical tools such as graphs and pie charts. Percentages and averages

have also been used to represent data clearly and effectively.

3.8 DATA COLLECTION INSTRUMENT DEVELOPMENT :-

The mode of collection of data will be based on Survey Method and Field Activity. Primary

data collection will base on personal interview. I have prepared the questionnaire according

to the necessity of the data to be collected.

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3.9 LIMITATIONS OF THE STUDY:-

This study also includes some limitations which have been discussed as follows:

i) The sample size of 100 customers and 4 banks might prove a limitation because of

difficulty in generalization of results.

ii) To collect the data from various banks was quite difficult due to non- cooperation of

some banks. This proved to be major limitation of the study.

iii) To access such a large number of customers was difficult because of non-cooperative

attitude of respondents.

iv) Lack of data was also the other limitation of the study as some of banks do not have

proper data on topic.

v) There was limitation of time to conduct such a big survey in limited available time.

vi) Ignorance and reluctant attitude of customers was also a major limitation in this study.

Thus above all were the limitations in this research study. The maximum efforts were made

to overcome these limitations in the study.

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ANALYSIS & INTERPRETATION

The analysis is based on the responses given by customers through questionnaires.

AGE GROUP OF SURVEYED RESPONDENTS

TABLE 9.1:

Age group No. of Respondents

18 - 25 years 127
26 - 35 years 67
36 - 49 years 46
50 - 60 years 24
More than 60 years 6

CHART-9.1:

Analysis:- From the chart above we find that 47% of the respondents fall in the age group
of 18 – 25 years, 25% fall in the age group of 26 – 35 years and 17% fall in the age group
of 36 – 49 years.
Therefore most of the respondents are relatively young (below 26 years of age). and 6%
respondent’s age are 50-60 years and 2% respondent’s age are 60 to above years.

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GENDER CLASSIFICATION OF SURVEYED RESPONDENTS

TABLE-9.2
Sr. No. Category No. of Respondents Percentage
1 Married 140 70%
2 Unmarried 60 30%
Total 200 100%
Base 200 respondents

CHART-9.2

Interpretation

From the table and graph above it can be seen that

 70% respondent’s are married.

 30% respondent’s are unmarried.

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Educational qualification of respondent’s

TABLE-9.3
Sr. No. Category No. of Respondents Percentage
1 Under graduate 50 25%
2 Graduate 80 40%
3 Post graduate 70 35%
Total 200 100%
Base 200 respondents

CHART-9.3

Interpretation

From the table and graph above it can be seen that

 25% respondent’s are under graduate.

 40% respondent’s are Graduate.

 35% respondents are Post graduate.

Number Of year’s Are You in Delhi ?

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TABLE-9.4
Sr. No. Category No. of Respondents Percentage
1 Less than five years 78 39%
2 More than five years 122 61%
Total 200 100%
Base 200 respondents

CHART-9.4

Staying years in Delhi

Interpretation
From the table and graph above it can be seen that

 39% respondent’s are in Dehradun is less than five year’s.

 61% respondent’s are in Dehradun is more than five year’s.

CUSTOMER PROFILE OF SURVEYED RESPONDENTS

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TABLE 9.5:
Customer profile No. of respondents
Student 7
Housewife 5
Working Professional 116
Business 49
Self Employed 24
Government service employee 24

Chart-9.5

Interpretation

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From the table and graph above it can be seen that:-51% of the respondents are working

professionals, 22% are into business and 11% are self-employed, 11% of the respondent’s

are government service employee and 3% of the respondents are student and 2% of the

respondents are house-wife.

ANNUAL HOUSE HOLD INCOME?

TABLE-9.6
Sr. No. Category No. of Respondents Percentage
1 Less than 2 lacs 98 49%
2 Between 2 to 5 lacs 62 31%
3 Between 5to 8lacs 30 15%
4 More than 8 lacs 10 5%
Total 200 100%
Base 200 respondents

CHART-9.6

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Interpretation
From the table and graph above it can be seen that

 49% respondent’s annual household income is less than 2 lacs.

 31% respondent’s annual household income is between 2 to 5 lacs.

 15% respondent’s annual household income is between 5 to 8 lacs.

 5% respondent’s annual household income is more than 8 lacs.

Do you know about HDFC housing development finance corporation LTD?

TABLE 9.7:

Category No. of Respondents

Yes 164

No 16

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CHART:-9.7

Awareness about HDFC LTD

Interpretation:-
From the table and graph above it can be seen that

 91% respondent’s are known about HDFC LTD

 9% respondent’s are not known about HDFC LTD

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Table 9 .8:-

Reasons for getting the home financed

Sr.No. Number of Reasons Percentage

a. Non-availability of funds 36

b. Reluctance to pay cash in one go 35

c. Tax benefit 24

d. Any other 5

GRAPH:- 9.8

Interpretation :-

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To interpret the response of the questions, the figures shows that most of the customers find

the problem in availability of funds i.e. 36% and very less number of customers found

problem in paying cash in one go is 35%, customers get housing loan for tax benefits is

24%. This was the expected response because a large number of people find a problem of

availability of funds which works as an obstacle in owning a dream home.

In today's life, people hardly earn both means and ends of life and they don't have much of

money to buy a home or a land to construct house because of cost of property. So, they take

the advantage of home loans provided by different banks at different terms feasible to the

customers. There are very less number of people, who don't own home even when they

have sufficient funds and they take the advantage of home loans because they don't want to

pay huge cash in one go. On the basis of study, it is concluded that most of people lack of

money in fulfilling their dreams and few of them were reluctant to pay cash in one go and

wanted to pay their home loans slowly in installments.

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Table-9.9

From where you have got your home financed

Name of Banks / company Percentage of customers

HDFC LTD 55

Punjab National Bank 15

Standard Chartered Bank 07

ICICI BANK 20

Any other 03

To understand the response more effective and closely, it has been showed

diagrammatically as follows :-

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GRAPH:- 9.9

From where you have got your home financed

Interpretation:-

The analysis showed that a large number of customers prefer HDFC LTD as compared to

others. The data shows that 7% of customers took loan from Standard Chartered Bank, 20%

of customers from ICICI BANK, 15% Customers took loan from Punjab National Bank,

55% of customers took loan from HDFC LTD and a 3% of customers fall under the

category of 'Any other' which included State Bank of India, Canara Bank, Punjab and Sind

Bank, etc.

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The data shows that most of people prefer HDFC LTD compared to public sector banks and

other private banks. This is because of the extra services provided by HDFC LTD.

However, there is less difference in figures of ICICI Bank and Punjab National Bank. But

there is considerable difference in figures of the two private sector banks i.e. ICICI bank

and Standard Chartered Bank. As ICICI is the market leader in the home loans sector. This

may be the reason for such difference in Standard Chartered Bank's percentage and ICICI

Bank's percentage. Another reason for specialized services in home loans, more amounts of

loans, and efficient query handling.

However, the analysis showed that the people prefer HDFC LTD for home loan because of

their services and excessive feat compared to other banks.

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Table-9.10Sources of information about Home Loans Scheme

Sources of information Percentage of customers

Newspapers 49

Magazines 16

Banners/Hoardings/Pamphlets 11

Word of mouth 20

Any other source 04

CHART:-9.10 percentage of source of information about home loans scheme

Sources of information about Home Loans Scheme

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Interpretation:-

The data shows that around 20% of customers got information from source of 'Word of

Mouth' which includes information from friends, relatives, colleagues etc. 49% of

customers got information from newspapers, only 16% of customers from magazines and

4% of customers got information about home loans schemes under 'Any other source' and

11% through Banners/ Hoardings/Pamphlets .

Table-9.11
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Opinion about the services of HDFC LTD

Services of HDFC LTD Percentage of customers agreeing

Strongly Agree Neutral Disagree Strongly

Agree disagree

a. Professionally 86% 10% 4% - -

managed

b. Reliable & 67% 33% - - -

transparent

c. Socially responsible 75% 10% 15% 4% -

d. Customer care 20% 68% 8% - -

e. Query handling 20% 76% 4% - -

GRAPH-9.11

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Opinion of customers about HDFC LTD

Interpretation:-

Customers from HDFC LTD are quite satisfied from their services like query

handling and customers social responsibility of banks towards customers and

professionally managed services. They don't give so good response to reliability and

transparency services of banks. So, customer's satisfaction level toward HDFC LTD

services is lightly satisfied.

Table-9.12

Opinion of customers about home loan schemes

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HDFC LTD :-

Services of HDFC Percentage of customers agreeing

LTD
Strongly Agree Neutral Disagree Strongly
Agree disagree
a. Amount of loan 60% 35% 5% - -

b. Legal formalities 42% 45% 14% - -

c. Interest rates 32% 56% 12% - -

d. Repayment options 26% 64% 10% - -

e. Security demanded 20% 32% 48% - -

f. Installments 55% 40% 5% - -

g. Services 45% 30% 18% 6% 1%

h. Processing for 55% 24% 18% 3% -

sanction of loan

GRAPH:- 9.12

Percentage of satisfaction level of customers of HDFC LTD

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Interpretation:-

The analysis shows that the customers of HDFC LTD gave 60 percent of amount of loan

and legal proceedings, 56% to interest rates, 45% to proceedings and services, 55% to

installments. So, customer of HDFC LTD didn't give response regarding the services of the

bank / company except to the amount of loan and legal formalities.

TABLE:- 9.13

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DATA GIVES PREFERENCE OF RESPONDENTS OF HOME LOANS

COMPANIES AND BANKS

NO.OF
COMPANY’S NAME (%)
RESPONDENTS

HDFC LTD 78 78
STANDARD CHARTERED
2 2
BANK
ICICI BANK 10 10
PNB 7 7
SBI 3 3
TOTAL 100 100

GRAPH:-9.13

NO. OF RESPONDENTS

INTERPRETATION:-

From the table and graph above it can be seen that:-

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78% of the people contacted prefer HDFC LTD to any other and therefore it is ranked

no.1 by that percent of respondents.

PROBLEMS FACED BY CUSTOMERS IN AVAILING HOME LOANS

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There are everything in the world has good or bad points. No doubt banking industry/

company has made many efforts to enhance the customer satisfaction but customer still

faced some problems. These are high lightened as below:

1) The customer does not have proper knowledge about different home loan products so

they face problem in making a good deal.

2) There are procedural delays, which harass the customers lot. This will crush the curtsy of

customers to avail the home loan.

3) The attitude of bank employees some times non cooperative and it creates a hurdle in

building trust and Confidence among customers about banks.

4) The banks do not take into account the paying capacity of customers. So some customers

are not able to get amount of loan needed by them.

So above discussed are the problems which faced by customers while availing home loans.

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CONCLUSION

1) In my study we came to know that many peoples are interested to take a home loan from

HDFC LTD to construct their homes.

2) Home loans have long period when compare to other personal loans and other loans. So

peoples are confused to take a home loan.

3) Even though the interest rates are high peoples are willing to take a loan from HDFC

LTD due to some reasons.

4) The interest rates also some what high when compare to other banks

5) The loan sanction process is low when compare to other banks.

6) For disbursement process is also it will take low time when compare to other banks

Finally the whole research was carried out in a systematic way to reach at exact results. The

whole research and findings were based on the objectives. However, the study had some

limitations also such as lack of time, lack of data, non-response, reluctant attitude and

illiteracy of respondents, which posed problems in carrying out the research. But proper

attention was made to Carry out research in proper way and to make accurate conclusion

for the HDFC LTD which may beneficial for banks to enhance their customer base.

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RECOMMENDATIONS AND SUGGESTIONS

These suggestions have been discussed as follows:-

1) To increase their customers, the HDFC LTD should provide specialized services in this

sector. These services can be such as proper guidance to the customer regarding the

processing of loans, especially for the customers who are illiterate.

2) To satisfy their customers and for good dealings in future, the HDFC LTD should make

prompt disbursement of loan amount to the customers so that they can buy or construct

their dream home as early as possible.

3) The HDFC LTD should use easy procedure, or say, less lengthy procedure for the

sanctioning of loan to the customer. There should be less number of legal formalities, in

case this exists, then, these should be completed in less time. This will be helpful in

attracting more customers.

4) Although the interest rates on specific norms, yet customers seek less interest rate which

can lower their cost of house. So banks should try to lower their interest rates. Needles to

say, that the bank which is having lower interest rates, have the maximum clients for loans.

5) HDFC LTD provide loan according to the repaying capacity of the customer and his/her

eligibility. Due to which, some customers are not able to get amount of loan needed by

them. So, the HDFC LTD should soften their norms regarding the loan amount.

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6) Create awareness: The Company has to take care of awareness creation about the

products and services among the customers.

7) Charges: The Company has to reduce the mortality and administration charges.

8) The company has to reduce their interest rates on home loan products and services.

9) The company has to identify the potential customers.

10) Company should consider the present competition and should act according to the

customer needs.

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FINDINGS

1. HDFC LTD having good brand image in the minds of customers.

2. Majority of the people got loans from HDFC LTD only

3. Most of the customers are not aware of the products of HDFC home loans

4. Some of the customer’s felt that the interest rates are some what high

5. Some of the customer not having good faith on private banks like Standard

chartered bank, HSBC bank etc.

6. Most of the people are directly go to HDFC to apply a home loan

7. Some of the customer of HDFC already benefited through HDFC home loan

products and services

8. Customer awareness is medium about HDFC products.

9. HDFC LTD providing good services to their customers.

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FUTURE SCOPE
OF
THE STUDY

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FUTURE SCOPE OF STUDY

The Indian housing finance industry has grown by leaps and bound in few years. total

home loans disbursements by banks has risen which witnesses phenomenal growth from

last 5 years. There are greater number of borrowers of home loans. so by this study we can

find out satisfaction level of customers and problems faced by them in obtaining home.

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Bibliography

 Berstain David(2008), “Home equity loans and private mortgage insurance: Recent

Trends & Potential Implications”, Vol.3 No.2, August 2008, Pp. 41 - 53

 Dr. Rangarajan C. (2001), “A Simple Error Correction Model of House

Price”.Journal of Housing Economics Vol. 4, No. 3,pp 27 – 34

 Fanning (1982), “The Demand for Home Mortgage Debt” Journal of Urban

Economics, Vol 11 No 2, November, pp. 770-774

 Godse (1983), “looking a fresh at banking productivity”, Journal of Real Estate

Literature, Vol. No. 13, Page 141 to 164.

 Haavio, Kauppi(2000) , “Residential Lending to Low-Income and Minority

Families: Evidence from the 1992 HMDA Data," Federal Reserve Bulletin,Vol no

80(2), December 2000 Pp-79-108

 Kulkarni (1979), “Development responsibility and profitability of banks” Journal of

Economic Perspectives, Vol 9 No 1 ,pp. 26-32.

 La courr, Micheal(2007) , “Economic Factors Affecting Home Mortgage Disclosure

Act Reporting” The American Real Estate and Urban Economics Association, Vol.2

No. 2 May 18, 2007, Pp. 45 -58

 La cour Micheal(2006) , “The Home Purchase Mortgage Preferences Of Lowand-

Moderate Income Households”, Forthcoming in Real Estate Economics , Vol 18, No

4 , December 20, 2006, p. 585.

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 Van dell ,Kerry D(2008), “Subprime lending and housing bubble:tail wag

dog?”International Journal of Bank Marketing, vol 21,no 2, pp. 53-7

 Brochure on home loans from HDFC LTD

NEWS PAPERS

 The Times of India

 Financial Express

WEB PAGES:-

http://www.hdfcindia.com/

http://www.hdfcindia.com/others/popup/news/hdfc_fin_result_june_30_08.html

www.hdfc.com

http://www.iloveindia.com/real-estate/housing-finance- companies/hdfc.html

http://www.loansnews.info/Home-loan/hdfc-home-loans/

http://www.hdfcindia.com/loans/hm-loan-documents.asp

http://www.thinkplaninvest.com/2009/01/hdfc-will-cut-home-loan-rates/

http://www.suncorp.com.au/suncorp/personal/home_loans/tips/faq.aspx

http://investing.businessweek.com/research/stocks/people/people.asp?ric=HDFC.BO

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http://www.economywatch.com/companies/forbes-list/india/housing-development-

finance-corporation.html

http://www.hdfcindia.com/loans/home-loan.asp

http://docs.google.com/gview?

a=v&q=cache:woJTMDV1HLYJ:www.hdfc.com/pdf/32AGM

%2520speech.pdf+hdfc+housing+finance+development+product&hl=en&gl=in

http://www.munichre.com/en/press/press_releases/2007/2007_10_30_profile_hdfc.aspx

http://www.hdfc.com.mv/faq.htm

http://ayaanbayaan.com/hdfc-ltd-financial-results-indian-gaap-for-the-period-april-to-

june-2009/

http://www.valuenotes.com/press/pr_HDFC_250ct05.asp?

ArtCd=70013&Cat=C&Id=100

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QUESTIONNAIRE

Dear Sir/ madam I am Chirag Chauhan M.B.A from (TIAS,GGSIPU). I am preparing a

project report on A STUDY ON HOME LOANS. For this I have designed a Questionniare

to know your views and satisfaction level of home loans .please fill the given as per your

thinking and experiences with this. I will be thankful to you for this.

Name: ………………………………………………………………………………………

Address: ……………………………………………………………………………………

Contact No :®………………( O)……………… (M)…………………………………….

City: ………...............Pin: ………………….State: ……………………………………..

1. Name: ____________________

2. Age:

(a) Below 30 (b) 30-40 (c) 40-50 (d) Above 50

3. Occupation:

(a) Professional (b) Self-employed (c) Salaried

(e) Others

4. Which income group do you belong? (Per annum)

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(a) Below 2 lakhs (b) 2-4 lakhs

(c) 4-6 lakhs (d) 6 lakhs and above

5. Have you ever taken Home loan before?

(a) Yes (b) No

6. If yes, from which Bank/company?

(a) ICICI (b) HDFC (c) UTI

(d) Centurion bank of Punjab (e) others

7. Are you satisfied with the services provided? (on 5 point scale)

_____________________________________________________________________

Highly dissatisfied Neutral satisfied highly

satisfied dissatisfied

8. While taking loan, which things attract you the most?

(a) Interest rates (b) Service Provided

(c) Pay back period (d) Schemes

(d) Others

9. Even if the Interest rate is high for the personal loans, you will go for it?

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(a) Yes (b) No

10. How much loan amount you took?

(a) Less than 1 lakhs (b) 1-5 lakhs

(c) 5-10 lakhs (d) more than 10 lakhs

11. Even if the Interest rate is high for the Home loans, you will go for it?

(a) Yes (b) No

12. Do you own a home…?

Yes [ ] No [ ]

If Yes, then, Proceed………

13. Have you get it financed?

Yes [ ] No [ ]

If Yes, then, proceed……..

14. What is reason for getting it financed?

1. Non availability of funds [ ]

2. Reluctance to pay cash in on go [ ]

3. Tax benefit [ ]

4. Any other (please specify).........................................

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15. From which of the following banks/ company you have got if financed?

Standard Chartered Bank [ ] State Bank of India [ ]

ICICI Bank [ ] HDFC LTD [ ]

Any other (please specify)...........................................

16. From where have you got information about home loans scheme?

(Check list)…………………..

Newspapers [ ] Magazines [ ]

Hoarding/banners [ ] Word of mouth [ ]

Any other (please specify)...........................................

17. What problems did you face while getting home loans?

a. Lack of knowledge

b. Procedural delays and non cooperation

c. Any other (please specify)........................................

18. Did you face any problem after sanction of loan?

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______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

19. What suggestions do you want to give for improvements in home loans Scheme?

______________________________________________________________________

______________________________________________________________________

______________________________________________________________________

THANKS

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