INTRODUCTION

Introduction to Home Loans.

Home is an integral part of a human being, who since his childhood, dreams to have living space of
his own. Once in a lifetime investment requires loan to do it and that is how the home loan comes into
scheme of things. Buying a home is dream for everyone. Due to the rising price of properties, it has
almost become impossible for an average earning person to buy a home through lump sum payment.
Therefore, the concept of home loan has come into existence. There are plethora of housing finance
institutions and banks both in public and private sector which offer home loans. Choosing one
institution and one offer for home loan amidst the thousands available options have become a very
complex task in our country. Apart from this, there are intricate business jargons and technicalities
that make this job more tough and difficult. Through this study, I propose to identify the critical
factors impacting the growth and distinguishing the growth pattern in home loan portfolio particularly
in public sector banks in India.

Home is a necessity to all human beings and owning a home is a dream for everyone. Earlier only
a few people had the privilege to have an own home but now with the availability of home loans
provided by banks many people’s dream has come true. These are loans which are provided either to
buy an already built ready to occupy a home or a flat or to construct a home.

Are you looking for a home loan? If yes, read our article Introduction to Home Loans on
BankandFinance.com and educate yourself before you start applying for house loans. Almost every
citizen wishes to purchase their own house in their name and in this day and age, land and property
prices have increased significantly, offering an attractive investment for individuals in India.

A Home Loan is taken out from a bank or financial company in order to purchase/construct a new
house or reconstruct an existing mortgage. There are several different ways in which an individual can
get a home loan mortgage. Over the past few years, many new banks and housing finance companies
have opened up and are providing attractive and low lending rates. There are many housing finance
lenders which we work with who are ready to give you the latest information about the bank of
mortgage rates.

An individual who is looking for housing loans should be aware of all his requirements and then
he/she can search for housing finance services in India. Without knowing the requirements it is
difficult to understand the process of a home loan. A borrower who is ready to go for house loans
should check their monthly incomes and the location of the borrower. You will also want to look into
getting home insurance quotes for your new home. Given the present economic conditions, the prices
of properties are rapidly on the rise especially in the major cities across India. This is making it
difficult for middle class families to afford these huge investments. Keeping this fact in mind, bank of
mortgage services in India considered these facts and came up with attractive mortgage interest rates
so that the middle class families can take a home lending bank loans. Borrowers should consider each
and every aspect of home lending from selecting the property to closing the finance loan amount. The
borrowers will be maintaining a long-term relationship with the finance company so it is wise to take
a loan from a bank which you feel comfortable with.

The core function of commercial banks is granting of credit. Although banks offer a wide spectrum of
financial services, lending has traditionally been their main function. Banks profess experience,
expertise and flexibility in lending which gives them a clear competitive advantage over other
financial institutions. Lending of funds to businessmen, traders and industrial enterprises is one of the
most important activity of a commercial bank.

The term “LOAN” refers to the amount borrowed by one person from another. The amount is in the
nature of loan and refers to the sum paid to the borrower. Thus, from the point of view of the
borrower it is ‘borrowing’ and for the bank it is ‘lending’. Loan may be regarded as ‘credit’ granted
where the money is disbursed and its recovery is made on a later date. It is a debt for the borrower.
While granting loans, credit is given for a definite purpose and for a predetermined period. Interest is
charged on the loan at an agreed rate and intervals of payments.
NEED OF THE STUDY
In the era of growing importance of financial status, there is an increased importance for various
financial institutions which provide such loans.

In the post reforms period, banks are facing tough competition due to interest rate regime. In today’s
buyers market, banks are facing cut throat competition. Hence they are introducing new loan products
to meet the requirements of the various segments of the society to know the importance of the retail
lending in banks.

In this background the topic of personal lending schemes of HDFC BANK LIMITED is chosen as
the subject matter of this project. The findings of the project may be considered by HDFC BANK
LIMITED while formulating the policies for increasing the volume of personal lending schemes.

As the country is witnessing globalization, privatization and liberalization wave with a strong
influence in culture and its implication, the need for loan have become inevitable at present scenario,
hence there is a need to study the progress and trends. Since more and more competitors have entered
the market with many features in their services.

The study is also required to analyze the views of the borrowers and to analyze the satisfaction level
of customers. It helps to know in detail the Loans and Advances provided by the bank, right from its
inception stage, growth and future prospects.
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:-

● To know the more objective of this study is to know the Customers perceptions about home
loans of HDFC  LTD.
● To know the customer perceptions about home loans of Indian overseas bank
● To analyze various methods of operating home loan
● To gain knowledge about various home products
● To study the satisfaction level of customers about home loan
SCOPE OF STUDY

1. The study is limited to only Indian overseas this study is mainly related to the individuals who
are interested in taking home loans from banks to fulfill their dreams.
2. The study is mainly related to all the loans provided by Indian overseas only
3. Company has undergone rapid changes in the past 5 years due to many policy decisions
relating to capital markets, banking sector & licensing policy.
RESEARCH METHODOLOGY
Research methodology is a way to systematically solve the research problem. It is a way of written
game plan for conducting research. In this we describe the various steps that are taken by a researcher.
So it is therefore desirable to design a research methodology. For this research the research
methodology is designed as under:

Housing loan is one of the emerging portfolios of both Private and Public sector banks. The national
housing policy of the Government of India emphasize that the incentive to be given to customers
buying residential properties .Accordingly in income tax there has been concessions / tax sops for the
individual buyer for home use.60-65%

Tax sops given by the government for housing loans have been instrumental in driving growth in this
sector. The government allows tax benefits to both the home loan consumer and the lender.

SAMPLING DATA COLLECTION

● Primary Data:

For the collection of primary data, researcher constructed and administered a pretested structured
questionnaire from the borrowers and officers executives of the selected banks. Institutional
questionnaire was framed to collect the responses from bankers and the individual questionnaire was
constructed to collect the responses from the urban population who have borrowed at least one of the
loans mentioned earlier from the selected banks and their sister concerns during the years 2016 to
2020.

● Home Interview
● Questionnaire
● Secondary Data:
● For the secondary data, the pamphlets, Annual reports, Articles, News papers books and
Websites of various schemes from different banks have been obtained.
 LIMITATIONS

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

 The sample size of 100 customers might prove a limitation because of difficulty in
generalization of results.
 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.
 To access such a large number of customers was difficult because of non-cooperative
attitude of respondents.
 Lack of data was also the other limitation of the study as some of banks do not have
proper data on topic.
 There was limitation of time to conduct such a big survey in limited available time.
 Ignorance and reluctant attitude of customers was also a major limitation in this study.