INTRODUCTION

"It was never so easy to build your own house" A roof over one's head and ground beneath one's feet count as the bare necessities of life. Theres nothing quite like owning a home, however humble, to give one that warm and glowing feeling. But when one buys a home, one has much more than a feel-good purchase in mind: its also a crucial investment decision, perhaps the biggest spending decision of one's life. There are ample opportunities today for young salaried investors to plan their moves early and buy a house at the right time and at the right price. In the process, not only do they fulfill that cherished dream of owning a house, but also put themselves on the path to acquiring property that would meet the needs and aspirations of their growing family, even as it leads to wealth creation. Every individual aspires to own a home. But many either spend a lifetime saving to purchase a house or exhaust money on monthly house rents. Take a house loan and let the monthly rent (easily converted into affordable EMIs) build you your dream home. Profitable Proposition The overall demand in the residential sector has grown by about 7 -8 per cent annually for the period 99-2005 as compared to the period 93-99. The growth is on account of two main factors: One, income-tax exemption; Two, with no similar rebates available for individuals in the high-income group, they are creating a second asset. Most banks have changed the way interest is calculated from annual rests to monthly rests. Under the annual rests method, the EMIs (equated monthly installments) one pays through a year are factored in as part-repayment of the principal component only at the end of each year. In other words, one has to pay interest even on the installments one has paid until theyre reduced from the principal at the end of each year. Under monthly rests, the principal is lowered by the appropriate amount each month. The thumb rule being that the more frequently interest is calculated, the better for the creditor. Recently, HDFC added monthly rests on its fixed-interest loans apart from annual rests. As a result, the fall in EMIs on fixed-interest loans (where the interest rate is constant for the entire tenure of the loan, irrespective of changes in the lending rates) is more pronounced than on floating-rate loans (where the loan interest rate varies with

changes in the interest rates). For example, the EMI on a 15-year, fixed-interest loan for Rs 15 lakhs has come down by Rs 840; the corresponding fall in the EMI on a floating-rate loan is only Rs 465. Apart from lowering the cost of one's loan, the switchover to monthly rests has another advantage: it makes it easier to compare loans. With increasing competition, lenders are also lowering and in some cases, even waiving-service charges (processing fee, administrative fee and so on). Even a one percent point reduction in the processing fee translates into a saving of Rs 15,000 on Rs 15 lakhs loan for borrowers. No lender has announced a permanent lowering of service charges, but theyre offering these at special events or for specific periods. A decision on whether one should go in for a fixed-rate or a floating-rate loan is a function of two factors: One's perception of where interest rates in the economy are headed, and one's capacity to ride the interest rate changes. A floating-rate loan lets one take advantage of further falls in interest rates, but one stands to lose if interest rates rise again. In other words, floating rate loans make sense only when the interest rates are high and are expected to fall. On the other hand, a fixed-interest loan immunizes oneself to interest rate jumps. If, however, interest rates fall, one can foreclose one's loan and refinance at a lower rate-either with another lender or, increasingly, with the same one. Locking in Choosing a housing loan is not a straightforward decision. There are several ways in which interest can be calculated. Some lenders charge interest on monthly outstanding balances (or rests), others on yearly rests and still others on daily rests. So, ones EMIs on the same loan and tenure may differ greatly, depending on whom one borrows from. Heres a tip: ones monthly payment is the lowest when interest is charged on a daily reducing balance. Processing and other fees too add to the cost. Also, remember, that lenders allow one to switch fr om a fixed rate loan to a floating rate loan, but not the other way.

Research objectives
The purpose of research is to discover answers to questions through the application of scientific procedure. The main aim of research is to find out the truth which is hidden and which has not been discovered yet. Though each research study has its own specific purpose, I may think of research objectives as falling into a number of following broad groupings:-

Research objectives of the project are as follows: 1) To study the loan approvals and disbursement by the various banks. 2) To study the perception of the customer about the banks. 3) To look the competitor Home Loan Policies 4) Main purpose of taking a home loan from the different banks. 5) To study the various schemes offered by various banks with a view to arrive at the most favored or popular scheme for implementation in our own organization and to affect changes and improvements to own existing schemes and policies. 6) To find out the tariff changes charges by banks in comparison to each other 7) To help banks to know where it lacks in loans and how for the performance of other banks is better so that individual figure out the common problems being faced by the customers while dealing in the loan department so that further individual can improve its services and schemes offered by them to their customers. 8) To know the flow of resources to the housing sector by integrating the housing finance sector with the overall domestic financial markets. 9) To know the Development of close relationships with individual households of banks. 10) To know the Maintain its position as the premier housing finance institution in the country. 11) Transform ideas into viable and creative solutions. 12) Provide consistently high returns to shareholders.

Research Methodology
Data Source Primary Source: The primary source of data is being collected by preparing a Questionnaire & it was by interviewing the loan holder. Research Approach: Survey Research Instrument: Questionnaire Sample Plan Sample technique: Convenience Sampling Sample Size: 200 Contact Method: Personally Place: Ahmadabad Statistical Tools used: Simple tools like pie charts, tables have been used.