A

Project report on

“ A STUDY OF HOME LOAN”

IN

HDFC BANK

Submitted To-

In Partial fulfillment of the Requirements of

Bachelor of Business Administration (BBA)

-Submitted by –

Miss. MATADE SHRADDHA ASHOK

-Under The Guidance

Prof. PINGALE. ANKUSH SIR

THROUGH

Grammonati Mandal's

Arts,Commerce And Science college,

Narayangaon

(Department of BBA/BCA)

For the year 2020-21.

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 Index
Sr. No Chapter name Page no

1. Executive Summary 6

Introduction
• Need for the study
2. 7
• Housing Finance
Evaluation

3. Scope of study 9

4. Objective of study 10

5. Importance of Study 11

6. Research of methodology 12

7. Profile of HDFC bank 13

8. Advantages and Disadvantage 14

Home loan Scheme and it’s

9. 15
Extensions

Eligibility criteria for Home

10. 17
Loan

11. Analysis and Interpretation 19

Documents Involved in
12. 20
evaluation of Home Loan

The parameters involved in

13. 26
housing loan evaluation

The loan procedure followed

14. 31
at HDFC Bank

15 The innovation loan concept 39

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16. The future of home loan 45

17. Limitations 47

18. Finding 48

19. Suggestions 49

20. Conclusion 50

21. Questionary 51

22. Reference 54

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 Declaration
I hereby declare that .The project entitled is an outcome of my
own effort .The project is submitted to the university of Pune in Arts,commerce
and Science college Narayangaon. For the fulfillment of the Bachelor of Business
Administration examination 2020-21
Thus, the sole and honest objective for collecting the
information is only for the academic purpose and I assure that collected
information shall be restricted only for project report.

Miss. MATADE SHRADDHA ASHOK

BBA 2nd year
3rd semester

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 Acknowledgement
I would like to express my special thanks of gratitude to my teacher
Prof. PINGLE.ANKUSH SIR as well as principal prof. SHEWALE SHRIKANT SIR who
gave me the topic “THE STUDY OF HOME LOAN IN HDFC BANK”. Which also
helped me in doing a lot of research and I came to know about so many new
things.
I am really thankful to them . Secondly I would also like to thank my
parents and friends who helped me a lot in finishing this project within the limited
time. I am making this project not only for marks but to also increase my
knowledge
THANKS AGAIN TO ALL WHO HELPED ME.

Place:- Narayangaon
Miss. MATADE SHRADDHA ASHOK
BBA 2nd year

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 Executive Summary
In today’s fast paced business environment banks operating in retail space
require a change resilient vertically integrated value chain for delivering the most
competitive products and services .This need is redefining the boundaries of a
banks value chain creating greater thrust for this value add, right from the lowest
end of the delivery channels. In the loans and advances product space, this
requires an integration strategy right from sourcing evaluation and servicing to
collections , recoveries and write-off management . This case study elaborate the
delivery capability of a bank . Operating in home loans space which is faced with
challenge of rapid changing product and business processes and also to handle
large transaction volume handling due to high business volumes.
This case study focuses on the business challenges faced by one of the
largest bank having 3000 concurrent user and with over 3 million customers
worldwide. The bank needs to implement a business Process with the needed
level of automation and to build up service capability for tapping a Nationwide
market for loans and advances business of secured and unsecured portfolio.

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 Introduction

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 wants to
own .Home is a shelter to person where he rests and feel comfortable.
Many banks providing home loans whether commercial banks or
financial institution 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 and
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 requirement . Many banks are providing home
loans at cheapest rate to attract consumer towards them.The more
customer friendly attitude of these banks, currently offer to consumers
cheapest loan over homes .In view of acute housing shortage in the
country and keeping in mind the social economic role of commercial
banks in the present times.The RBI abvised banks rate .The home loan
market rates nose-diving by 50 basis points. The HDFC bank and
standard chartered banks has become the first player in this sector to
announce a housing loan for a 20 years period.No doubt it will enhance
the end cost people to plan their house over longer duration now. It has been
made easy for a person to buy that dream house. Which he dreamt of long
ago.HDFC also provides with Home improvement loan for internal and external
repairs and other structural improvement like painting waterproofing plumbing
and electric words ,tiling and flooring ,grills and aluminum 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 it’s
existing floating rate customers.

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Need for the study:-

Retail banking has been popular segment to enter into for many
banks. In the retail banking , housing sector has been most promising segment
which is promising a comprehensive growth rate of about 30 per cent for the next
five years. With the government keep on infrastructure development and
announcing various tax sops housing loan segment has been a tempted area for
many banks to enter into housing sector can be bifurcated into organization and
unorganized segment with the unorganized segments accounting for ever 75per
cent of the housing units constructed .

During the past 4-5 years the Housing sector helped by the growing housing
finance industry has witnessed significant development.

Housing finance Evaluation:-

Housing Development Finance Corporation (HDFC) was the first

housing finance company to setup operations in India in 1977. After the national
housing bank Act,1987, was passed NHB came into existence as a subsidiary of
the Reserve Bank of India ( RBI) to regulate housing finance companies and
provide them with refinancing to supplement their fund requirements.

Public sector Banks were allowed to provide housing loans directly to retail clients
only in 1988.

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 Scope of study of home loan in HDFC bank :-

1) The study is limited to only HDFC Bank this study is mainly related to
the individual who are interested in taking home loans from banks to full
fill their dreams.

2) Company has undergo rapid changes in the past 5 years due to many
policy decisions relating to capital markets , banking sector and licensing
policy.

3) To study is mainly related to all the loans provided by HDFC Bank only.

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 Objective of study of home loan in HDFC Bank:-

1. To study and understand the concept of home loan scheme and the
eligibility criteria of the customer .

2. To study and understand the documents involved in the home loan

scheme and the repayment methodology adopted by HDFC bank.

3. To understand current scenario of the 'Indian Housing Finance’.

4.To make comparative analysis of SBI , LIC (Public sector) HDFC (Private
Sector bank).

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 Importance study of home loan in HDFC Bank:-

1) The study is to help HDFC Bank to know where it lack in

loans, performance and other facilities as compare to other
Banks and figure out the problem faced by the customer
while transaction.

2) Comparison of loan scheme with four banks

HDFC,ICICI,SBI,and PNB.

3) To promote their other facilities extra service provided by

HDFC bank.

4)To reduce the documentation while opening account or

While loan disbursement.

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 Research of methodology :-

• Research methodology is a methodology for collecting all sorts of

information and data pertaining to the subject in question .The objective is
to examine all the issues involved and conduct situational analysis. The
methodology include the overall research design ,sampling procedure and
Fieldwork done and Finally the analysis procedure .

::Sampling Technique::
To study the project ,a simple random sampling technique is used .

:Data collection:
Data collection is mainly dealt with the way data is collected we have collected
data mainly through two ways.

:Primary data:
we collect primary data by visiting individual house and
meeting with individual persons.

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 Profile of HDFC Bank :-
About HDFC Bank

HDFC Bank was incorporated in August 1994,and ,

currently has an Nationwide network of 2,544 branches and
9,709 ATM's in 1399 Indian towns and cities.

The Housing Development Finance Corporation limited

(HDFC) was amongst the first to receive an ' in principle' approval
from the Reserve Bank of India (RBI) to set up a bank in the
private sector, as part of the RBI's liberalization of the Indian
Banking industry in 1994. The bank was incorporated in August
1994 in the name of HDFC Bank limited ,with it’s registered office
in Mumbai , India HDFC Bank commenced operations as a
schedule commercial Bank in January 1995.

HDFC is India’s premier housing finance company and

enjoys as impeccable track record in India as well as in
international markets. Since it’s inception in 1977. The
corporation has maintained a consistent and healthy growth in
it’s operations to remain the market leader in mortgages .It’s
outstanding loan portfolio covers well over a million dwelling
units.

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• Advantage of Home Loan:-

1) Attractive interest rates.

2) Helping in Owing a home
3) Less documents required
4) Door step service
5) Loan period

• Disadvantage of home Loan:-

1) Fluctuating interest rates.

2) Delay in Processing file.

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 Home Loan Scheme and it’s Extensions :-

A home loan scheme is generally offered to the person to

accommodate finance for purchasing the house or for renovation or extension of
the existing house .

The various existence scheme ,which are included in the home loan portfolio,are:

Home purchase loans :-

This is the basic home loan for the purchase of a new home.

Home Improvement Loans:-

These loans are given for implementing repair works and renovations in
a home that has already been purchased by you.

Home construction Loan :-

This loan is available for the construction of a new home.

Home Extension Loan:-

This is given for expanding or extending an existing home.

For .e.g addition of an extra roomer.

Home Conversation Loan :-

This is available for those who have financed the present home with
a home loan and wish to purchase and move to another home for with some
extra funds are required . Through home Conversation Loan,the existing loan is
transferred to the new home including the extra amount required ,eliminating the
need of pre-payment of the previous loan.

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• HDFC Offers:-

1. Attractive loan interest rates.

2. Home Loan amount starting from RS 2lakhs and ends up to 20

lakhs

3. Tern loans up to 20 years.

4. Free personal accident insurance ( Term and conditions ).

5. Insurance options for your home loan at attractive premium .

6. Special 100% funding for select properties.

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 Eligibility Criteria For Home Loan :-

How much an applicant can borrow?

Home Loans range from RS.1Lakh to RS.50 lakh . Your repayment period can very
from 1years to 20 years depending upon your capacity to repay .

Eligibility:-

Age:- Min= You should be at least 21years of age.

Max= At the time of loan maturity ,you should not exceed 65years of your
retirement age which ever is earlier.

Individual:-

You should have completed a minimum of 2 years of service (with a

minimum of 1 years in the current job.)

Business person /Self -employed professional:-

You must have an established business or professional practice of not less

than 3 years ,with a positive net worth and must have posted a net profit for the
last 2 years.

Note:- Minimum of RS.6000/- P.M for salaried employees or annual income of not
less than RS.1.20 lakh for Business person Self – employed professional .(spouse
/co-applicant's income can be included in the income computation).

1. Individual who are salaried or self-employed, professional, businessman are

eligible.Proprietary concerns .HUF, partnership firms or limited companies
are not eligible for this loan,where partners at their individual capacity are
free to available this loan.
2. As a customer to enhance the loan eligiblity ,all HFI's lay down condition to
who be Co applicant, co-owner to the property should necessarily be co-
applicant. Income of the co- owners can be clubbed together to get higher

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 loan eligiblity.Minors are not eligible to become co-owner, as also friend
and relative's only blood relatives are eligible to take a property jointly.

Some of the acceptable relationships where loan clubbing is possible.

3. The minimum age for the applicant and the co applicant to become eligible
for the commencement often loan is 23 years ,and co applicant can be of 18
years of age if their income is not dubbed to calculate the loan eligiblity.
4. The maximum age at the time of loan maturity for application or co-
applicant is 60 years or the retirement age whichever is earlier.

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Documents involved in evaluation of Home Loan:-
The documentation requirements for various categories of applicants
depends on their status.For this purpose all HFL's segregate their employees in
different categories They are:-
• Salaried
• Professional of Businessman

The criteria of evaluation changes according to their status.The general

documents , which remain same for all the categories are follows:-

1) Proof Age:-
Any one of the following is considered for proof of age ,they are
• Passport
• Voter's ID card
• PAN card
• Ration card
• Employer's identity card
• School leaving certificate
• Birth certificate

2) Copy of bank statements for the last 6 Months:-

Bank statement for the last six months of all operating and salary
accounts.
Bank statement for the last 6 Months of all current a/c ,if self
employed. Any other photocopies of investments held,if required by the
HFI’S .
3) Copy of latest credit card statement
4) Passport size photograph
5) Signature verification by your bankers .
6) Proof of residence
• Ration card
• PAN card

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 • Passport

• Rent agreement if any,if you are currently staying on rent.

• Allotment letter from your company if you are residing in
company quarters.

•The documents required to be provided by the salaried class are as follows:-

1) Salary slips for the last one month.

2) Appointment letter
3) Salary certificate
4) Retainer ship agreement ,if appointed as consultant.
5) From 16 issued by the employer in your name.
• Proof of Employment:-
The proof of employment is verified by the:-
1) Identity card issued by the employer.
2) Visiting card.

Employer’s details ( in case of private limited companies):

The employer's details are to be provided in addition to
the above documents for documents for a private sector
employee, they are:

1) Name of promoters /directors .

2) Background of promoters / directors.
3) Number of employees.
4) List of branches/ factories.
5) List of clients/ customers.
6) Turnover of your employer.
7) Annual reports of your employer for the last two to three
years.

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The criteria with respect to the private sector employee and employees
belonging to the public limited companies is bit more Stringent

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 The documents required to be submitted by the businessmen as follows:

Last three years profit and lass Account statement duly attested by a charted
accountant

Last three years Balance sheets duly attested by a chartered accountant.

Last three years Income tax Return duly filled and certified by income tax
authorities.

• Proof of Investments :-

1) Bank statement for the last six months of all current account.

2) Any other photocopies of investments held, as required by the HFI.

The above are the various documents required by the businessman conducted by
him, if his business profile is in the negative list,he will be throughly considered
for his credibility before dispersing loan ,the organization and property location
should not be in the negative list .

This are the additional documents which are required to be looked at before
going on for completing the pre sanction formalities with respect to disappearing
of the home loans to the business class.

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 Limitations Study of home loan in HDFC Bank:
The study was restricted in understanding the home loan as concept
so the practical implementation of the study have been difficult

The take over home loans of high interest rate for low interest rates
and their inherent risks on the banks lending profile has not been undertaken in
the study .

The mortgage home loans and it’s scope on the home loan lending
portfolio were not studied as this would lead into a relatively new kind of home
loan segment.

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 Finding :-

1. Majority of the people get loans from SBI and HDFC Bank

2. Most of the people are given important to loan tenure while choosing loan
and followed one is loan eligiblity.

3. Most of the customer are facing problem of lack of knowledge because of

they are not aware about different type of facility.

4. Majority of the people pay fixed rate of interest.

5. From the research most of people are male who have taken loan.

6. Most of the people felt that the interest rates are somewhat high and
majority of people are satisfied with the service.

7. Most of the people felt that HDFC provide good service compare to other
bank.

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 Suggestions:-

• To broaden the customer base the vast middle income strata should be fully
exploited.

• Simplyfy the procedure, reduce service charges and demand only the basic
essential proof.

• Most banks are reluctant to advance loan to the service class .E.g lawyers ,
police officers, etc.this aspect must be exploited.

• Adoption of flexible and more lenient penalty should

• Offer multiple repayment loans services.class to be exploited by offering

special reduced.

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 Conclusion:-

The study shows that HDFC home loan has product portfolio for
satisfying different consumer needs in lucrative manner but, the bank provide the
benefits like SMS alert and other features so as to make the home loans more
attractive .The home loan segment can be extended to the NRI segment ; this
would provide the bank a cutting edge and larger share of the home loan market.

The bank cantemplate on decentralizeing the operations however

taking into consideration the experience and expertise of the members at loan
department enters.

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 Questionary:-

1) Name:_________

2) Age :-

a)18-25 years.

b)26-35 years.

c)36-49 years

d)50-60 years.

e)more than 60 years

3) Material Status:-

a) Married.

b) Unmarried

4) Educational qualifications of respondent's :-

a) Undergraduate

b) Graduate

c) Post- graduate

5) occupation of respondent’s?

a) Student.

b)Housewife.

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 c) Business.

d)Self -employed

e)Govt.service employee

f) Working professional.

6) What is your Annual Household income ?

a) Less than 2lacs.

b) Between 2 to 5 lacs

c) Between 2 to 5 lacs

d) More than 8 lacs

7) Do you know about HDFC Housing Development Finance

Corporation LTD?

a) Yes

b) No

8) Reason for getting the home loan?

a) Non – availability of funds.

b)Reluctancy to pay cash in one go

c)Tax benefit

d) Any other

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9) Sources of information about home loan Scheme ?

a) Newspaper

b) Magazine

c) Banner

d) Any other sources

10) Opinion about the services of HDFC LTD ?

a) Strongly agree

b) Agree

c) Neutral

d) Disagree.

11) Did you Face any problem after sanction of loan?

__________________________________________

___________________________________________

___________________________________________.

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 Reference:-

• Desai,v, “ Indian Banking nature and problem”.

• Gordon,E, “ Banking and insurance”.

• pathak ,B,” The Indian financial system”.

• Pathak BV, “ The Indian financial management system”.

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