A PROJECT REPORT ON

DIFFERENCES BETWEEN
HOUSING-LOANS PROVIDED BY SBI AND HDFC BANK

SUBMITTED BY:- VAGHELA MANISHA D.

BMS/BBA :–3rd YEAR, SEMESTER: - 5th

SUBMISSION DATE:-18 -9-2012

ACADEMIC YEAR:- 2012-2013

vaghela_manisha13@yahoo.com BY:MANISHA VAGHELA 1

ACKNOWLEDGEMENT

There is always a sense of gratitude which one express towards others for their help
and supervision in achieving the goals. This formal piece of acknowledgement is an
attempt to express the feeling of gratitude towards people who helpful me in successfully
completing of My Project .

I would like to express my deep gratitude to our principle MISS. DEVIBEN DAVE
and our HOD MISS SHILPA BHATT . Special thanks to PRF. I. M . TRIVEDI who
guided me to work honestly and to give valuable suggestion for improving my work Last
but not least I would also like to place of appreciation to all Family members or Bank
managers whose responses were of utmost importance for the project.

vaghela_manisha13@yahoo.com BY:MANISHA VAGHELA 2

 Above all no words can express my feelings to my parents, friends all those
persons who supported me during my project. I would like to give special
thanks to My Brother and My Father whose cooperation & support has helped
me a lot in collecting necessary information.

I would also like to thank almighty God for his blessings showered on me
during the completion of project report.

- MISS. MANISHA VAGHELA

T.Y B.M.S SEM:-5TH

ROLL. NO. 33

vaghela_manisha13@yahoo.com BY:MANISHA VAGHELA 3

OBJECTIVES OF THIS STUDY

 To study the Differences Between Housing-Loans Provided By SBI

And HDFC Bank

 To study the cost of home loans provided by the SBI and HDFC BANK.

 To know the consumer perception about the home loan of SBI and
HDFC BANK.

 To know the procedure for taking housing loan of SBI and HDFC
BANK.

 To search the different types of housing loans of SBI and HDFC BANK.

 To know the necessary documents which are needed for taking housing
loan of SBI and HDFC BANK.
vaghela_manisha13@yahoo.com BY:MANISHA VAGHELA 4
FLOW OF PRESENTATION
 CURRENT RATE OF INTREST ON HOUSING LOAN PROVIDED BY SBI AND HDFC

 INTRODUCTION OF HOUSING LOAN

 TYPES OF HOUSING LOAN

 ADVANTAGES OF HOUSING LOAN

 DISADVANTAGES OF HOUSING LOAN

 PROCEDURE FOR GETTING HOUSING LOAN

 DOCUMENTS NEEDED FOR HOUSING LOAN

 HOUSING LOAN PROVIDED BY STATE BANK OF INDIA (SBI)

 FEATURES AND INTREST RATE

vaghela_manisha13@yahoo.com BY:MANISHA VAGHELA 5

  HOUSING LOAN PROVIDED BY THE HOUSING DEVELOPMENT FINANCE
CORPORATION LIMITED (HDFC)

 FEACHURS AND INTREST RATE OF HDFC BANK LOAN

 DIFFERENCES BETWEEN HOUSING-LOANS PROVIDED BY SBI AND HDFC BANK

 WAY SHOULD YOU TAKE HOME LOANS FROM SBI AND NOT HDFC?

 WHICH IS THE BEST BANK FOR HOME LOAN ?

 Conclusions

 BIBLIOGRAPHY

vaghela_manisha13@yahoo.com BY:MANISHA VAGHELA 6

SHOULD YOU SHIFT TO LOWER HOME LOAN RATES OR SWITCH LENDERS?
Preeti Kulkarni, ET Bureau Apr 5, 2012, 06.42AM IST times of india

vaghela_manisha13@yahoo.com BY:MANISHA VAGHELA 7

INTRODUCTION OF HOUSING LOAN

 Everyone dreams of owning his own land and property

one day and to turn this dream into reality is what the
system of home loans do in India.

 Now a day there is a cut throat competition in each and

every sector of economy. It is same for banking sector.

 Now a days rural people are migrating towards urban areas

for employment as well as for education purpose. So they
are demanding more for housing loan.

vaghela_manisha13@yahoo.com BY:MANISHA VAGHELA 8

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

 Taking home loans these days has become simpler.

With the RBI regularly bring down interest rates;
taking home loans have become extremely easy.

 Housing loans which were 16.5% to 18% a few years ago

fell by 11.5% to 13%. With interest rates going down,
people increasingly number apply to take these loans.
vaghela_manisha13@yahoo.com BY:MANISHA VAGHELA 9
TYPES OF HOUSING LOANS

 Home Purchase Loans:

 Home Improvement Loans:
 Home Extension Loans:
 Home Conversion Loans:
 Land Purchase Loans:
 Stamp Duty Loans:
 Bridge Loans:
 Balance-Transfer Loans:
 Re-finance Loans:
 NRI Home Loans:

vaghela_manisha13@yahoo.com BY:MANISHA VAGHELA 10

ADVANTAGES OF HOME LOANS:-

 Help in owning a home:-

 Attractive interest rates:-
 Loan period:-
 Door-Step Services:-
 No requirement of guarantor:-
 For accidental death insurance :-

vaghela_manisha13@yahoo.com BY:MANISHA VAGHELA 11

DISADVANTAGES OF HOME LOANS:-

 High Cost:-
 Fluctuating interest rates :-
 Delays in processing :-
 Problems in disbursement:-

vaghela_manisha13@yahoo.com BY:MANISHA VAGHELA 12

PROCEDURE FOR GETTING HOUSING LOAN
 Step 1: Application form
 Step 2: Personal Discussion
 Step 3: Bank's Field Investigation
 Step 4: Credit appraisal by the bank and loan sanction
 Step 5: Offer Letter
 Step 6: Submission of legal documents & legal check
 Step 7: Technical / Valuation check
 Step 8: Valuation
 Step 9: Registration of property documents
 Step 10: Signing of agreements and submitting post-
dated cheques
 Step 11: Disbursement

vaghela_manisha13@yahoo.com BY:MANISHA VAGHELA 13

DOCUMENTS NEEDED FOR HOUSING LOAN

Completed loan application form with one passport size

photograph
Proof of individual’s identity (any one of the following)
 Passport
 Photo PAN card
 Defense identity card
 Voter's identity card
 Driving license
 Photo ration card
 Government identity card
Proof of residence (any one of the following)
 Passport
 Ration card
 Telephone (land/mobile) bill

vaghela_manisha13@yahoo.com BY:MANISHA VAGHELA 14

  Electricity bill
 Driving license
 Society outgoing bill
 Voter's identity card
 Life Insurance Policy
 Only Passport can be used as both Proof of individual's identity and Proof of
residence.
Proof of age (any one of the following)
 Passport
 Valid driving license
 Voter's identity card
 Birth certificate
 School leaving certificate
 LIC Policy or Premium receipt clearly indicating the applicant's age
 Letter from the employer stating the age of the employee

vaghela_manisha13@yahoo.com BY:MANISHA VAGHELA 15

 HOUSING LOAN PROVIDED BY STATE BANK OF INDIA (SBI)

vaghela_manisha13@yahoo.com BY:MANISHA VAGHELA 16

 FEATURES AND INTEREST RATES

1.)ELIGIBILITY:
 Minimum age: 18 years as on the date of sanction
 Maximum age: 70 years. i.e. the age by which the loan
should be fully repaid, subject to availability of
sufficient, regular and continuous source of income for
servicing the loan repayment.

vaghela_manisha13@yahoo.com BY:MANISHA VAGHELA 17

 2.)REPAYMENT

 Repayment period: Maximum 30 years (or) Up to the

age of 70 years (the age by which the loan should be
fully repaid) of the borrower, whichever is early.
 Moratorium period (Repayment holiday): The
moratorium period is included within the maximum
repayment period.

vaghela_manisha13@yahoo.com BY:MANISHA VAGHELA 18

All Rate are floating only

(Base Rate= 10.00% p.a.)

vaghela_manisha13@yahoo.com BY:MANISHA VAGHELA 19

HOUSING LOAN PROVIDED BY THE
HOUSING DEVELOPMENT FINANCE
CORPORATION LIMITED (HDFC)

vaghela_manisha13@yahoo.com BY:MANISHA VAGHELA 20

FEATURES AND BENEFITS OF HDFC HOME LOANS

1. Home loan:
2. Home improvement loan:
3. Home extension loan:
4. Land purchase loan:
5. Loan cover term assurance plan:
6. Automated repayment of home loan emi:
7. Customer privileges:

vaghela_manisha13@yahoo.com BY:MANISHA VAGHELA 21

DIFFERENCES BETWEEN
HOUSING-LOANS PROVIDED BY SBI AND HDFC BANK

vaghela_manisha13@yahoo.com BY:MANISHA VAGHELA 22

SBI V/S HDFC

vaghela_manisha13@yahoo.com BY:MANISHA VAGHELA 23

  HDFC’s new home loan product comes at a fixed rate
of 8.25 per cent per annum for the first three years (up
to March 2012). However, these rates are applicable for
loans up to Rs. 30 lakh and a maximum tenure of 20
years, and not on the other two slabs, i.e., loans
between Rs. 30 lakh and Rs. 50 lakh; and Rs. 50 lakh
and above.

vaghela_manisha13@yahoo.com BY:MANISHA VAGHELA 24

 2.)

vaghela_manisha13@yahoo.com BY:MANISHA VAGHELA 25

  HDFC’s new loan offer is in direct competition with
SBI’s Easy Loan scheme, but it is difficult to guess the
winner. Now let us have a rundown on SBI’s Easy Loan
scheme. Loans under this scheme are offered at a fixed
rate of 8 per cent for the first year, 8.5 per cent the next
two years and thereafter at a floating rate of 2.75 per
cent below

vaghela_manisha13@yahoo.com BY:MANISHA VAGHELA 26

  its benchmark rate (SBAR, State Bank Advance Rate)
or at a fixed rate of 1.25 per cent below SBAR.
Currently, SBAR stands at 11.75 per cent. The
comparative rates of both SBI and HDFC are given in
Table 1. Recently, SBI extended its special loan offer till
March 31, 2013 to maintain its credit growth target and
build up retail portfolio in lieu of a slump in
commercial lending.

vaghela_manisha13@yahoo.com BY:MANISHA VAGHELA 27

 3. HOME LOAN TAX IMPLICATIONS

vaghela_manisha13@yahoo.com BY:MANISHA VAGHELA 28

  Here, we have analyzed HDFC and SBI offers in terms
of interests paid in the first three years, total interest
paid and effective interest rate for the complete tenure
(refer Table 2 and 3). In Table 2, we see that there is a
marginal difference in the first 3-year interest
components of both the lenders. However, in terms of
total interest payments, HDFC scores over SBI; HDFC
borrowers save Rs. 75,683 in interest compared to SBI
borrowers. The effective interest rate in case of HDFC
comes to 8.69 per cent compared to SBI’s 8.85 per cent.

vaghela_manisha13@yahoo.com BY:MANISHA VAGHELA 29

4.

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  However, in case of a Rs. 60-lakh loan (refer Table 3),
interest component in the first 3 years varies
considerably, i.e., 19.90 per cent and 22.34 per cent of
the total interest paid for SBI and HDFC, respectively.
If the borrower is looking to prepay his/her loan, SBI’s
offer would be a good bet in this case. SBI also scores
over HDFC in terms of total interest paid, and thus,
the effective interest rate comes to 9.69 per cent for
SBI in comparison to 9.78 per cent for HDFC. Here,
HDFC borrowers end up paying Rs. 70,348 more than
SBI borrowers.

vaghela_manisha13@yahoo.com BY:MANISHA VAGHELA 31

WHY HDFC BANK IS BEATING THE HELL OUT OF STATE
BANK OF INDIA?

 On Tuesday, an astonishing thing happened. HDFC

Bank briefly overtook the State Bank of India (SBI)
and became India’s most valuable bank when SBI’s
balance-sheet is five times bigger than HDFC Bank’s—
even without counting the former’s five major
subsidiaries.
 Though Wednesday saw things reverse a bit, the fact is
investors now think the two banks are worth more or
less the same – around Rs 1,10,000 crore each, give or
take a bit. It is only a matter of time before HDFC Bank
overtakes it permanently.

vaghela_manisha13@yahoo.com BY:MANISHA VAGHELA 32

Way should you take home loans from SBI and not
HDFC?
 The war is on but there is nothing new in it. Banks and
financial institutions are offering lower floating rate loans
to new borrowers while old borrowers are made to pay high
rate of interest of the floating rate.

 As usual banks and financial institutions are not passing

new rates to the existing customers.

 One of friend Rahul Sharma borrowed money for home

loan from HDFC three years back. He is currently paying
11.5% rate of interest for a loan amount of 23.5 lakhs while
new borrowers in the same category are eligible for floating
rate loans at 10.5% ( See table below). This results into huge
cost of 1% on loan of 23.5 lakhs.

vaghela_manisha13@yahoo.com BY:MANISHA VAGHELA 33

  Since banks and financial institutions do not pass the
benefit of floating rate of interest to new borrowers,
where should you borrow your money from a bank i.e.
SBI or a financial institution i.e. HDFC. While existing
rate of interest is indeed a key consideration, you
should also evaluate whether you will benefit from
reduced floating rate of interest.

vaghela_manisha13@yahoo.com BY:MANISHA VAGHELA 34

Conclusions

 Housing loan are necessary for making own house for

middle class people. This project report can be used
for necessary information regarding Differences
Between housing-loans provided by SBI and
HDFC bank. The project report is based on SBI and
hdfc bank’s housing loan . I try my best to satisfy my
project topic. I use all relevant information regarding
housing loan which help me to compare two bank’s
housing loan facility policy ,rule and regulations .

vaghela_manisha13@yahoo.com BY:MANISHA VAGHELA 35

BIBLIOGRAPHY

 1.)BOOKS:
 The Indian financial system & development - Vasant Desai
 2.)VISIT :
 SBI –Neelam baugh branch HDFC – BRANCH - DOWN
CHOCK,BHAVNAGAR
 3.) SITES :
 www.sbi.com [History, introduction & other more]
 Wikipedia.org / wiki / bank
 www.wikipedia.com
 www.managementparadise.com
 www.scribd.com
 www.hdfcbank.com
 http://en.wikipedia.org/wiki/HDFC_Bank
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  https://www.sbi.co.in/user.htm?action=viewsection&lang=
0&id=0,1,20,115
 https://www.sbi.co.in/?action=viewsection&lang=0&id=0,1
,20,115,742
 http://jerinjoseph.wordpress.com/2011/02/02/sbi-home-
loan-process-explained-in-steps/
 http://www.rediff.com/money/2009/feb/13perfin-sbi-8-
percent-home-loan-rate-lure.htm
 http://articles.economictimes.indiatimes.com/2012-03-
27/personal-finance/31244886_1_prime-lending-home-
loan-customers-base-rate

vaghela_manisha13@yahoo.com BY:MANISHA VAGHELA 37

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