INTRODUCTION TO THE INDUSTRY

THE HISTORY OF INDIAN HOME LOAN

Home loans in Indian have made buy property in Indian in spite of the skyrocketing
prices. Todays we find considerable Real Estate Investment in India, either in the field of
residential property in India or commercial properties in India. Home loans in India are disbursed
by many banks as loan banking is one of the most important function of the financial services in
India property Dealers and Real Estate consultants in India usually recommend that we
undertake appropriate home loan or Mortgage loan counseling so that we can Buy Apartment in
India at an affordable Mortgage Rate purchasing the home of your dreams is not an easy task
Especially when you plan to buy a home on loan. Home loan means that you buy a house on
installments. In simpler terms when you want to own a home and cant afford to pay the amount
in lump sum, you can pay it in monthly installments with an interest rate.
The interest rates of home loans are expected to go down even further according to
analysts who fore see a cut down in the rates by the RBI in the wake of decision taken us Federal
Reserve to cut its rates by a significant margin.
There are number of companies offer cheap home loans at a low interest rate you can
avail loan against existing house for renovation or expansion etc. there are many nationalized
banks that offer finance for affordable housing India Housing has put together a comprehensive
data to provide you with the cheapest Home Loans available in the market. We have listed all the
important housing finance institutes and some of the top home finance banks providing lowest
interest rates.
In the last few years, housing loan scenario in India has changed drastically. It has taken a
front seat and people are looking forward to owning their own house. It is no more dream that
required lifetime saving and a difficult decision to make. Today the new home purchase loan is
much easily available and is much cheaper than what was available earlier. Banks are now
everywhere and the schemes are implemented even in villages and smaller loans. The housing
loans are popular there 100, however the activity of building flats is little slow. It would not be
wrong to say that there has been a boom there is also a boom in the number of home loans
mortgage brokers in India.

The main reason for this boom in home loan market is the change in government policies.
It is our governments motivation that the home loan interest rates in India have fallen
considerably. Lot many banks are offering home loans and this is available at low EMI (Equated
Monthly Installments). High EMIs are now a thing of past today lending rate is in the range of
7.5% to 15% again there are different types of home loans available today. The interest rate
available is also of two different types one is the fixed rate loan the other is the floating rate loan.
In the fixed rate loan whatever interest is fixed on the start of loan is carried on for the complete
period however, in the other one the interest rate is not fixed and as the interest rate goes up or
low the effect is directly transferred to the person who is taking the loan. In the last few years the
floating interest rate has been a favorite among most of the people taking home loans.
There is also a trend to opt for home construction loan. This loan is available to those
who want to design their homes according to their requirement. In other words, this loan is meant
for those who themselves want to construct their new home. As shares earlier taking a loan is not
a difficult task. However, before taking a loan one must realize that the bank will be for a longer
period u usually15 to 20 year so one must ensure faith and integrity in bank. Apart from low rate
of interest, the bank should also provide some value added services. The other thing is to look
into facility to build a good building is very important.
Taking home loans these days has become simpler with the RBI regularly bring down
interest rate; 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 these loans in India includes ICICI Bank, HDFC Bank, SBI & Axis Bank.

INTRODUCTION TO THE STUDY

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 ones 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. E c o n o mi c r o l e o f c o m m e r c i a l b a n k s i n t h e p r e s e n t t i me s , t h e R B I
a d v i s e d b a n k s t o encourage the flow of credit for housing finance. With the RBI reducing
bank rate, the home loan market rates nose-diving by 50 basis points.
Housing is a primary human need next in importance only to food a n d c l o t h i n g . A
f i r s t p r i o r i t y f o r a y o u n g s t e r w h o b e g i n s l i f e i s therefore to plan for a
h o u s e . Th i s t a k e s p r e c e d e n c e o v e r o t h e r household expenditure and creature
needs. Housing, however, is a major expenditure and cannot be funded out of a family's
normal monthly income or savings. The prospective homeowner must look for a loan substantial
in size and so structured that he can repay it o v e r a l o n g e r p e r i o d o f t i m e , i n m a n y
c a s e s a l m o s t o n e ' s e n t i r e working life. Loan is offered to a borrower to purchase or build a
new house on the basis of his/her eligibility and the bank's lending rules. One of the
important basic human needs is shelter. House is the ultimate encouragement for house finance
subsidiaries by offering number of tax concessions to individuals. With
the overall encouragementg i v e n t o t h i s s e c t o r , a n u m b e r o f p l a y e r s e n t
e r e d i n h o u s i n g finance.One of the most important benefits of taking a home
loan are the interest rate that is allowed on the home loan. Fixed and
variablei n t e r e s t r a t e o p t i o n s a r e a l s o a v a i l a b l e f o r h o m e l o a n s . M a n y
financiers also offer home improvement loans at the same interest rate as they offer the home
loans.
The section 5 (b) of the Banking Regulation Act 1949 defines Banking as,"
Accepting for the purpose of lending or investment of deposits of money from the public,
repayable on demand or otherwise and withdraw able by cheque, draft or otherwise."A "home
loan" is a credit to a consumer for the purchase or t r a n s f o r ma t i o n o f t h e p r i v a t e
i m mo v a b l e p r o p e r t y h e o w ns o r a i ms t o a c q u i r e s e c u r e d e i t h e r b y a m o r t g a g e
o n i m mo v a b l e property or by a surety commonly used in a Member State for that
purpose."A home loan requires you to pledge your home as the lender's security for
repayment of your loan. The lender agrees to hold the title or deed to your property

until you have paid back your loan plus interest. In simple words a home loan is
a fund or the loan which the buyer has taken from any financial institution or b a n k
t o p u r c h a s e a n e w h o m e a t a n a g r e e d r a t e o f i n t e r e s t specified during the
contract. H o me l o a n i s t h e f i n a n c e b o r r o w e d f r o m a b a n k o r f i n a n c i a l
i n s t i t u t i o n t o b u y o r m o d i f y a r e s i d e n t i a l r e a l e s t a t e p r o p e r t y. Any Resident or
Non-resident individual who is planning to buy a house in India can apply for a Home loan. If
you have decided t o b u y a p r o p e r t y i n t h e n e a r f u t u r e yo u c a n e v e n a p p l y f o r a
loan before you select your property.

OBJECTIVES OF THE STUDY

To identify the reason for availing home loans in nationalized and private banks.
To analyze the impact of EMI and interest on loans charged by banks on the customer.
To identify level of services which they expect from bank.

LIMITATIONS OF STUDY
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.

QUESTIONNAIRE
1. Age of respondents
a) Below 30

b) 30-40

c) 40-50

d) 50 Above

2. Income of respondents
a) Below 2 lakhs

b) 2-4 lakhs

c) 4-6 lakhs

d) 6 lakhs and Above

3. Occupation of respondents
a) Self-employed

b) Professional

c) Salaried

4. Monthly savings
a) Below Rs.2500

b) 5000

5. Indicate the current residential status

a) Own house

b) Rented house

6. What is your purpose of loan

c) 8500

d) 10000

d) Others

a) Personal loan

b) Home loan

c) Education loan

d) Other

7. How much type of loan you have

a) 1

b) 2

c) 3

d) 4

8. Please indicate the value of the loan amount

a) Between Rs.5 lakhs to 6 lakhs

b) Between Rs.7 lakhs to 8 lakhs

c) Between Rs. 9 lakhs to 10 lakhs

d) Between Rs. 10 to 12 lakhs

9. Please indicate the type of interest rate charged on the loan

a) Fixed interest rate

b) Floating interest rate

10. The areas to be improved by Housing Finance Institutions in providing better services to
customers and society
a) Attractive schemes

b) Simple terms & conditions

c) Low interest rate

d) Use of new technology

11. Do you think the interest charged by bank on the basis of RBI
a) Yes

b) No

12. The Mortgage process has been explained thoroughly

a) Agree

b) Disagree

c) Strongly agree

d) Strongly disagree

13. How do you rate the documentation procedure of bank

a) Agree

b) Disagree

c) Strongly agree

d) Strongly disagree

14. Are you satisfied with service provided by Housing Financial Institutions
a) Satisfied

b) Dissatisfied

c) Highly satisfied

d) Highly dissatisfied

15. What type of services offered by bank

a) D-Mat A/C

b) Mutual fund

c) E-Instruction

d) Digitally signed statement

16. What the people think about the banks

a) Necessity for protection security
c) A compulsory tool for SAVING

b) Imposition of a burden of expenses

d) Others Pls specify

17. Which banks home loan product do you find most reliable
a) SBI

b) ICICI

c) HDFC

d) Axis bank