S.K.

Patel Collage of Institute of

Management
And
Computer Studies
Subject: Managerial Financial Services
Group Members
Vishal Gohil (23)
Milan patel

(80)

Vipul Savani (99)

Bhavin Sheta (100)
Sagar Virani (118)
Submitted to: Prof. Ranjani Shreenivasan
Submitted on: 13th December 2014

Home Loan Procedure

With the increasing competition in the market for offering Home
Loans, the otherwise tedious process of availing loans has gone a
tremendous change in the recent years. However, there is still
some process involved in the procurement of Home loan. It is
advisable for you to first look at the different stages required for
obtaining a Home Loan. The followings are the step by step
procedure of getting home loan:
Step 1 : Application form
The first step involved in applying for home loan is the
procurement of application form from the HFC of your choice. The
Performa of application every HFC (Housing Finance Companies)
is different from the other but about 80% information required to
be furnished is the same. Along with the application form
necessary documents like address proof, age proof, proof of
income, bank balance etc. are also to be attached with the
application form before it is submitted to the HFC. Along with all
these documents HFCs also ask for processing fee of the home
loan that varies 0.25% to 0.50% of the total loan amount.
Step 2 : Personal Discussion
After successfully filling the application form and submitting it to
the authority the next step is face to face with bank or HFC where
you have applied for the home loan. The bank first evaluates the
papers submitted and summons the applicant for the personal
discussion regarding the home loan applied for. It is advisable that

you carry all your original documents of whose copy you have
submitted along with the application.
Step 3 : Bank's Field Investigation
The next step is the field investigation done by the HFC or banks.
They sent their representatives to the existing residence of the
applicants or their offices for the validation of the documents
submitted. This is the essential part for the banks to establish the
trust

with

the

applicants.

Step 4 : Credit appraisal by the bank and loan sanction

This is the make or break stage of the process. The bank or HFC
will establishes repayment capacity based on your income, age,
qualifications, experience, employer, nature of business etc. to
access your credential. The bank can refuse your loan application
is any discrepancy is found at this stage. But if every thing goes
according to the conditions negotiated by both the parties then
the bank or HFC sanction the loan that may be unconditional or
with some conditions levied.
Step 5 : Offer Letter
After the sanction of the Home Loan, the applicant gets
offer letter from the bank or HFC with the following
details:
Loan amount
Rate of Interest
fixed or variable ROI
Tenure of the loan
Mode of repayment

General terms and conditions of the loan

Special conditions, if any
If the terms and conditions are agreed the applicant has to sign
the duplicate copy of the offer letter and that is to be submitted
to the Bank or HEC.
Step 6 : Submission of legal documents & legal check
The bank or the HFC now asks for the legal documents of the
property involved for applying home loan. All the legal documents
of the property involved have to be submitted. The bank does all
the legal checks on the property. The documents remain with the
bank until the repayment of the Home loan.
Step 7 : Technical / Valuation check
The Banks or HFC then go about the technical valuation of the
property. The experts of the bank visit the site that has to be
purchased and value it as per the existing rules and regulations.
The valuation of the property is the most important aspect that
the bank considers before financing any property.
Step 8 : Registration of property documents
After the legal and technical valuation of the property the draft
documents has to be cleared by the lawyer and stamping and
registration of the documents is needed.
Step 9 : Signing of agreements and submitting post-dated
cheques

Now it is time of signing the final agreement of the home loan.

After the signing of the agreement a bunch of Post dated cheques
are to be submitted as agreed on the agreement paper.
Step 10 : Disbursement
It is time for the final Disbursement of the Home Loan. After the
bank or HFC ensures financing the property is involves no risk
they pay the final amount that is agreed upon. The mode of
payment varies from full to part payment. In the case of under
construction property the mode is part payment and in the case
of ready possession properties disbarment is full and final.

India bulls Housing Finance

Maximum loan
80% of the cost of the property (including the cost of the land)
and based on the repayment capacity of the customer for loans
beyond 20 lacs. We offer upto 85% of the cost of the property if
your loan requirement is upto 20 lacs
Maximum Term
20 years subject to your retirement age
Applicant and Co- Applicant to the loan
Home Loans can be applied for either individually or jointly.
Proposed owners of the property,
will have to be co-applicants. However, the co-applicants need
not be co-owners

Adjustable Interest Rate Home Loan

Loan under Adjustable Interest Rate is linked to benchmark rates
of IHFL. The rate on your loan may be revised from the following
month,

if

there

is

change

in

the

benchmark

rate

of

IHFL. However, the EMI on the home loan disbursed will not
change*. If the interest rate increases, the interest component in
an EMI will increase and the principal component will reduce
resulting in an extension of term of the loan, and vice versa when
the interest rate decreases.
Purpose
Purchase of Flat, row house, bungalow from developers,
existing freehold properties,
properties in an existing co-operative housing society or
apartment owner's association
Construction of residential dwelling unit on a plot already
owned.
Purchase of residential plot and / or construction thereon
Extension of existing residential property (adding floors, new
rooms)
Renovation of existing residential property
Interest Rate
Variable rates

Loan Amount

Variable rates%

Upto and including Rs 25

lacs

10.15% to 11.00%

More than Rs 25 Lacs

11.00% to 12.00%

Fixed n floating
Loan Amount

Fixed Rate Tenor

Rates

lacs

Fixed for 2 years

10.15% to 11.00%

More Than Rs 25 Lacs

Fixed For 1 Year

10.75% to 11.50%

Upto and including Rs 25

After the completion of Fixed Rate Tenor, the rate of interest

applicable on loan will be the prevailing Variable Rate Of Interest
basis the Margin adjusted to Reference Rates at the time of loan
agreement execution.
Processing Fee
Upto and including Rs 10
lacs

Rs 5000

Rs 10.01 Lacs to Rs 25 lacs

Rs 7500

Over Rs 25 Lacs

0.50% to 1.00%

Advantage

Home loans come with a dual advantage, tax benefits and rent
saving. Both these elements contribute towards EMI outflow.
Appreciation in the property value is an additional bonus. We
ensure that our customers get maximum benefits through their
home loans.
Here is a list of benefits that you can avail when you take an
Indiabulls home loan:
Approval of loan even if property is yet to be selected
Online access of Loan account
Funding available for NRI customers
Facility for funding for builders under construction and ready
properties
Experienced staff to provide doorstep services
Quick processing and disbursal of loans

Tax benefit
The income tax authorities offer certain benefits and exemptions
to individuals who have taken a housing loan from specified
financial institutions.

Section 24 of the Income Tax Act

Interest paid on capital borrowed for the acquisition, construction,

repair, renewal or reconstruction of property is entitled to a
deduction. Rs 1,50,000 is the maximum amount eligible for
deduction in the case of self-occupied property and for rented out
property there is no limit of amount of deduction.
Section 80C of the Income Tax Act.
You can get a maximum Rs.1,00,000 deduction from the Income,
on repayment of principal during a financial year. Stamp duty,
registration fee or other such expenses paid for the purpose of
transfer of such house property to the assessee is also considered
under this amount.

Home Loans (other than Plot loans)

Floating Rate Loans o Nil prepayment / foreclosure fees applicable
Fixed n Floating (Dual Rate) Loans o Fixed Interest Rate Period of the Loan: Nil prepayment /
foreclosure fees applicable for all such payments from own
sources. Any prepayments from other than own sources
to attract prepayment fees of 2% of the amount prepaid. The
expression "own sources" for this purpose would imply any
source other than by borrowing from a Bank/HFC/NBFC
and/or any Financial Institution.

o Floating Interest Rate Period of the Loan: Nil prepayment /

foreclosure fees applicable The expression "own sources" for
this purpose would imply any source other than by borrowing
from a Bank/HFC/NBFC and/or any Financial Institution.

Home Loans for Plot purchase :

o Nil prepayment / foreclosure fees applicable during the Initial
3 years from the date of last disbursement of the loan OR
where the construction of dwelling unit is completed on the
plot. (Borrower is required to submit proof of completion of
house construction as deemed appropriate by IBHFL where
prepayment is after the initial 3 yrs from the date of last
disbursement of the loan).
o Prepayment fees of 2% of the amount prepaid applicable on
all such payments after the initial 3 years from the date of
last disbursement where the construction of dwelling unit is
not completed on the plot, unless specifically mentioned in
the borrowers loan agreement.
o Where such loan has been transferred by way of buy-over
from any other Bank/HFC, the initial period of 3 years to be
treated from the date of last disbursement of the buy-over
Bank/HFC.
o Services Tax as applicable on pre-payment / foreclosure fees.

The above fees/charges are subject to change without prior notice

Documents require
o Application form: duly signed
o Processing Fee Cheque
o Know Your Customer documents: Name & date of birth
proof, address proof, signature proof, identity proof
o Income documents
- If salaried: Salary slips, Form 16 and bank statement
- If self employed: ITRs with financial statements, Bank statement
Property Documents

HBN Housing Finance Ltd.

Home loan
With HBN housing, we help you to form your dream house and the
hearth that form your paradise. HBN gives you an opportunity to
purchase

your

dream

house

and

provide

assistance

to your housing related requirements. HBN housing loan comes

with

unmatched

Home loans ranging from 3 lakhs to 25 lakhs

Attractive interest rates

Up to 80%... of property valuation

Longer tenor of up to 15 years

Insurance provided on your home loan

Counselors visit at customers ease

Doorstep delivery and pick up of documents.

advantages:

Documents Required
For a salaried person, the following documents are
required:

3 months salary slip

Last 6 months bank statements

Form 16 of the last two years

For a self-Employed person, the following documents are

required:
Last 3 years Balance sheet, profit & loss account, computation of
income & IT return attested by CA.

Certificate of practice (if applicable)

Latest one year bank statement

Business profile Property Documents:

Photocopies of complete chain of legal documents of property.
LAP
Any loan facility given to a person to fulfill his needs against the
mortgage of property is called loan against property. The
mortgage can be equitable mortgage by depositing original chain
of property in favor of the company. You can take a loan for the
purpose of business, wedding of your dreams; fund your child
education and much more. HBN has designed Loan Against
Property to enable you to maximize the power of your property.
Features and Benefits:
Attractive interest rates
Insurance provided on your given loan
Quick disbursal of the loan
If you are HBN customer for 6 months or more, you are
entitled to a special discount on the processing fees.

 Hassle free documentation

Documents Required
For

salaried

person,

the following

documents

are

required:
3 months salary slip
Last 6 months bank statements Form 16 of the last two
years

For a self-Employed person, the following documents are

required:
Last

years

Balance

sheet,

profit

&

loss

account,

computation of income & IT return attested by CA.

Certificate of practice(if applicable)
Latest one year bank statement
Property Documents:
Photocopies of complete chain of legal documents of property

Construction and renovation

Constructing a house in india is one of the largest investments a

person make thus increasing the importance of construction

and renovation loans. A Construction/Home Renovation Loan is
a type of loan that lets you access the equity in your home as a
source of financing for large renovations or a newly-constructed
home. We would like to enchance your dream projet with the
help of HBN Housing where we consider financing both single
and

multiple

stories.

Loan for construction basically means that once you have

purchased the home and now you want finance to undergo
construction or expand your house. It may include any type of
construction you want to undertake like constructing more
rooms or you have a plot and you want to build your dream
home. Renovation of home is much desired to suit the latest
style and technologies.A Renovation Loan is made to fund
internal improvements to an existing home.

Features:(a) Competitive interest rates

(b) Quick and easy processing
(c) Lower interest rates
(d) Counselors visit at customer ease
(e) Door step delivery and pickup of documents
(f) Fast approvals
Documents Required
For a salaried person, the following documents are

required:

3 months salary slip

Last 6 months bank statements

Form 16 of the last two years

For a self-Employed person, the following documents are
required:

Last 3 years Balance sheet, profit & loss account,

computation of income & IT return attested

Certificate of practice(if applicable)

Latest one year bank statement

Business profile

by CA.

Property Documents:
Photocopies of complete chain of legal documents of property.

Recovery policy of loan

General Terms of the Loan:
1. The repayment schedule terms for the loan such as repayment
frequency, interest
calculation frequency, amortization frequency, repayment mode
and method of calculation
of interest would be clarified to the customer.

2. The general terms of repayment and calculation of interest and

charges are also displayed
on companys branches.
3. Change if any terms of the loan are being intimated to
customer in writing.
Guidelines for Recovery of Overdues:
1. HBNHFL would follow multiple methods of recovery including
reminder letter, personal visit, follow up with guarantors.
2. HBNHFL would contact the customer at the place of his choice
and in absence of any specified choice, at the place of his/her
residence or place of work.
3. HBNHFL would respect the privacy of customers.
4. Identity and authority of persons authorized to represent
HBNHFL for follow up and recovery of overdues would be made
known to the borrowers at first instance.
5. HBNHFL would document the efforts made for recovery of
overdues and the copies of communication set to borrowers, if
any would be kept on record.
6. All assistance would be given to resolve disputes or differences
regarding dues in mutually acceptable and in an orderly manner.

7. Normally HBNHFL would contact the customer between 10Am

-6PM unless the special circumstances of his/her business require
HBNHFL contact to the customer at different time.
8. Opportunity would be provided to the customer in case of
default.
9. Attitude during telecalling and recovery visit would be to
maintain decency and reasonable decorum would be maintained
at all times provided the same is reciprocated to customers.
10. All written and verbal communications would be in simple
business language and HBNHFL would adopt civil manner in
interaction with customers.

Giving notice to Borrowers

While written communication, telephonic reminders or visit by
HBNHFLs authorized representatives to the customers place or
his/her residence would be used as loan follows up measures.
HBNHFL would not initiate any legal proceedings or other
recovery measures including repossession of security without
giving due notice in writing. HBNHFL would follow all such
measures as required under law for recovery.

Recovery/Possession/Repossession of
Property/Security
Repossession of property/security would be aimed at recovery of
overdues and not to deprive the borrower of property/security.

The recovery process through repossession of security/property

would involve repossession, valuation of property and realization
of security through appropriate means. All these would be done
only after issuing the notice as detailed above. Due process of law
would be followed while taking repossession of property/security.
HBNHFL would take all the reasonable care for ensuring the safety
and security of property after taking custody, in ordinary course
of business.

Valuation and Sale of Property

Valuation and sale of property/security repossessed would be
carried out as per law and in fair transparent manner. HBNHFL
would have the right to recover from borrower and the balance
due, if any after sale of property/security. Excess amount if any,
obtained on sale of property would be returned to borrowers after
meeting all related expenses provided HBNHFL is not having any
claim against the borrower.

Engagement of Recovery Agency:

HBNHFL does not have any external recovery agency. However if
HBNHFL take the help from external agencies and at such time,
due care shall be taken to ensure that the external agency would
follow the same policy as the HBNHFL would.
The Board of Directors of HBNHFL would provide for the periodical
review of the compliance of the Recovery Policy and the
functioning at various levels of Management.

HDFC home loan

SALIENT FEATURES:

Quick & Hassle free home loans.

Customized repayment options to suit your needs.
Doorstep assistance on your Home Loan.
Expert legal and technical counseling to help you make the

right home buying decision.

Integrated branch network for availing and servicing the loan
anywhere in India.

Who Can Apply

You can apply individually or jointly for Home Loans. All proposed
owners of the property will have to be co-applicants. However, all
co-applicants need not be co-owners. Generally co-applicants are
close family members.
Loan Term
The maximum period of repayment of a loan shall be up to
30 years for the Telescopic Repayment Option under the
Adjustable Rate Home Loan. For all other Home Loan

products, the maximum repayment period shall be up to 20

years.
The

tenure

of

the

loan

is

also

dependent

on

the

customers profile, age of customer at maturity of loan, age

of property at loan maturity, depending upon the specific
repayment scheme as may be opted and any other terms
which may be applicable based on prevalent norms of HDFC.

Maximum Loan Amount

Loan Amount

Maximum Funding*

Up to Rs.75 lacs

80% of the property cost

Above Rs.75 lacs

75% of the property cost

Types of Home Loans

Adjustable Rate Home Loan
A Home Loan under the Adjustable Rate is linked to HDFC's Retail
Prime Lending Rate (RPLR). If there is a change in our RPLR, the
interest rate on your loan will be revised once in three months
depending on the date of your first disbursement with or without
a change in EMI. If the interest rate increases, the interest

component in an EMI will increase and the principal component

will reduce resulting usually in an extension of term of the loan,
and vice versa when the interest rate decreases.
TruFixed Plus Home Loan 2 Year Fixed Rate Variant
A TruFixed Plus Home Loan offers you a part fixed rate term and a
part adjustable rate term. Under this variant of the TruFixed Plus
Home Loan, you can avail of a fixed rate for a maximum term of 2
years, post which the loan will automatically convert to an
adjustable rate, adding up to a total term of 20 years.
TruFixed Plus Home Loan 3 Year Fixed Rate Variant
A TruFixed Plus Home Loan offers you a part fixed rate term and a
part adjustable rate term. Under this variant of the TruFixed Plus
Home Loan, you can avail of a fixed rate for a maximum term of 3
years, post which the loan will automatically convert to an
adjustable rate, adding up to a total term of 20 years.

INTEREST RATES
RPLR: 16.75%
Loan Slab
Any
Amount

Interest

Rates (% p.a.)*
Loan 10.15 to 10.65

RPLR

Minus

Spread
RPLR - (6.60 to
6.10)

Adjustable Rate Loan

RPLR: 16.75%
Loan Slab

Interest

RPLR Minus

Rates (%

Spread

p.a.)
and 10.50 to 11.00

RPLR - (6.25

including Rs.30 lacs

Rs.30.01
lacs 10.75 to 11.25

to 5.75)
RPLR - (6.00

onwards

to 5.50)

Up

to

TruFixed Plus Loan 2 Year Fixed Rate Variant [Limited Period

Offer]
RPLR: 16.75%

Loan Slab

Interest

Post The Fixed Rate Term The

Rates During Applicable Interest Rates Shall

The

Fixed

Year Be

The

Prevailing

to

p.a.)*
and 10.25 to 10.75

RPLR (6.60 to 6.10)

including Rs.
30 lacs
Rs.30.01
lacs to Rs.75

Of

Rate Interest Under Adjustable Rate

Term (%
Up

Rate

10.50 to 11.00

RPLR (6.60 to 6.10)

lacs

Rs.75.01

10.50 to 11.00

RPLR (6.25 to 5.75)

lacs onwards
TruFixed Plus Loan 3 Year Fixed Rate Variant [Limited Period
Offer]
RPLR: 16.75%
Loan Slab

Interest
During

Rates Post The Fixed Rate Term

The

3 The

Year Fixed Rate Rates

Term (% p.a.)*
Up

to

and 10.75 to 11.25

Applicable
Shall

Interest
Be

Prevailing Rate Of Interest

Under Adjustable Rate
RPLR (6.25 to 5.75)

including Rs.30
lacs
Rs.30.01

lacs 10.75 to 11.25

RPLR (6.00 to 5.50)

to Rs.75 lacs
Rs.75.01

lacs 11.00 to 11.50

onwards

DOCUMENTS

The

RPLR (6.00 to 5.50)

Following are the documents you would need to submit for all
applicants

co-applicants

along

with

the

completed

and

signed Application Form for loan approval:

Purpose

Documents
1. Valid Passport
2. Voter ID Card

Proof

of

both

identity

3. Aadhaar Card
4. PAN Card with Allotment Letter

and residence (any For the complete list of KYC documents click
1)

here
1. PAN Card
2. Last 3 months' Salary Slips
3. Last

months'

Bank

Statements,

showing salary credits

Proof of income
Other documents

4. Latest Form-16 and IT returns

1. Employment Contract / Appointment
Letter in case current employment is
less than 1 year old
2. Last

months'

Bank

Statements

showing repayment of any ongoing

loans
3. Passport size photograph of all the
applicants / co-applicants to be affixed
on the Application Form and signed
across
4. Cheque for processing fee favouring

HDFC Ltd.
1. Copy of the Allotment Letter / Buyer
Agreement
Property

related

2. Receipt/(s) of payment/(s) made to the

documents

developer

REPAYMENT OPTIONS
Step Up Repayment Facility (SURF)
SURF offers an option where the repayment schedule is linked to
the expected growth in your income. You can avail a higher
amount of loan and pay lower EMIs in the initial years.
Subsequently, the repayment is accelerated proportionately with
the assumed increase in your income.
Flexible Loan Installments Plan (FLIP)
FLIP offers a customized solution to suit your repayment capacity
which is likely to alter during the term of the loan. The loan is
structured in such a way that the EMI is higher during the initial
years and subsequently decreases in proportion to the income.
Tranche Based EMI
If you purchase an under construction property you are generally
required to service only the interest on the loan amount drawn till
the final disbursement of the loan and pay EMIs thereafter. In case
you wish to start principal repayment immediately you may opt to

tranche the loan and start paying EMIs on the cumulative

amounts disbursed.
Accelerated Repayment Scheme
This option provides you the flexibility to increase the EMIs every
year in proportion to the increase in your income which will result
in you repaying the loan much faster.
Telescopic Repayment Option
With this option you get a longer repayment tenure of up to 30
years. This means an enhanced loan amount eligibility and
smaller EMIs.