A STUDY ON HOME LOAN OF HDFC BANK LTD.

BY: KUMARI SURABHI 12DM053 AMLAN MOHANTY 12DM029 SUSHMITA PAUL 12DM049 RISHA MISHRA 12DM047 DEEPIKA MOHANTY 12DM084

HDFC BANK LTD.

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 liberalisation of the Indian Banking Industry in 1994. The bank was incorporated in August 1994 in the name of 'HDFC Bank Limited', with its registered office in Mumbai, India. HDFC Bank commenced operations as a Scheduled Commercial Bank in January 1995. The objective is to build sound customer franchises across distinct businesses so as to be the preferred provider of banking services for target retail and wholesale customer segments, and to achieve healthy growth in profitability, consistent with the banks risk appetite.

CONT.
The bank has three key business segments: Wholesale Banking The Bank's target market is primarily large, blue-chip manufacturing companies in the Indian corporate sector and to a lesser extent, small & mid-sized corporates and agri-based businesses. Retail Banking The objective of the Retail Bank is to provide its target market customers a full range of financial products and banking services, giving the customer a one-stop window for all his/her banking requirements. Treasury Within this business, the bank has three main product areas Foreign Exchange and Derivatives, Local Currency Money Market & Debt Securities, and Equities .

Financial Highlights - Quarter ended December 2012

Net profit up by 30.0% to 18.6 Bn Gross advances increased by 24.2% to ` 2,432 Bn Deposits up by 22.2% to 2,841 Bn CASA ratio at 45.4% Net Interest Margin at 4.1% Core Cost-to-income ratio at 47.1% Gross NPA / gross advances at 1.0% Net NPA / net advances at 0.2% Capital adequacy ratio (CAR) - total 17.0% of which tier I at 10.9%

HOME LOAN
Home Loan is a Secured Loan offered against the security of a house/property which is funded by the banks loan, the property could be a personal property or a commercial one. The HDFC Advantage Pioneers of Housing Finance in India with over 33 years of lending experience Widest range of Home Loan Products Most experienced and empowered personnel to ensure smooth & easy processing. Counselling and advisory services for acquiring a property Loan from any office for purchase of home anywhere in India Loan approval even before a property is selected Flexible loan repayment options Free & safe document storage

HOME LOAN PRODUCTS

Home loan
Home improvement loan Home extension loan

Rural housing finance

1)Home Loan: Home loans for individuals to purchase (fresh / resale) or construct houses. Application can be made individually or jointly. HDFC finances up to 80% of the cost of the property (including the cost of the land) based on the repayment capacity of the customer.

2)Home Improvement Loan: HIL facilitates internal and external repairs and other structural improvements like Painting, Waterproofing and Roofing, Plumbing and Electrical Works, Tiling and Flooring, Grills, Aluminum Windows compound walls and much more. HDFC finances up to 85% of the cost of improvement. This is however subject to 80% of market value as assessed by HDFC.

3)Home Extension Loan:

HEL for adding more space to your existing home for meeting the requirements of your growing family be it an extra bedroom for your children, a reading room for yourself or a cozy coffee corner. HDFC finances up to 85% of the cost of extension. This is however subject to 80% of market value as assessed by HDFC.

ELLIGIBILITY FOR HOME LOAN

Salaried AGE 21years to 58years Self employed 21years to 65years

Income

Rs.1,20,000 (p.a)

Rs.1,50,000 (p.a)

Loan Amount Offered

2,00,000 - 1,00,00000

2,00,000 - 2,00,00000

Tenure

5years-20years

5years-20years

Current Experience

3years

2years

Processing Fee

11000/- or 0.5%

11000/- or 0.5%

DOCUMENTS REQUIRED
Salaried Customers Self Employed Professionals Self Employed Businessman Application form with photograph Application form with photograph Application form with photograph Identity and Residence Proof Latest Salary-slip Identity and Residence Proof Identity and Residence Proof

Education Qualifications Education Qualifications Certificate and Proof of business Certificate and Proof of business existence existence Last 3 years Income Tax returns (self and business) Last 3 years Profit /Loss and Balance Sheet Business profile Last 3 years Income Tax returns (self and business) Last 3 years Profit /Loss and Balance Sheet Last 6 months bank statements (self and business) Processing fee cheque

Form 16

Last 6 months bank statements

Processing fee cheque

Last 6 months bank statements Processing fee cheque

LOAN SANCTIONING PROCESS

A home loan is a long term commitment of 15-20.It is desirable that a proposed borrower should first understand the stages of obtaining a Home Loan. Listed below are the steps for HDFC home loan process: Step 1: Application Form The process starts with formal application of the Home Loan. HDFC would provide a form that demands some basic information about the proposed borrower. Step 2: Personal Discussion HDFC Bank Home Loan approving department would go for a personal discussion with the customer to judge the aspirant. Step 3: Bank's Field Investigation The bank normally outsource agency to do a verification of the applicants residence and place of work.

 Step 4: Credit appraisal by the bank and loan sanction HDFC would then compute your eligibility based on your income documents and verification reports and sanction the loan. Step 5: Offer Letter As a confirmation of the loan approval the borrower would receive a sanction letter from the bank stating the loan amount, tenor, rate of interest and all other terms under which the loan gets approved. Step 6: Submission of legal documents & legal check After loan authorization the bank would ask for the property related documents to validate that the proposed property is free from any litigations.

 Step 7: Technical / Valuation check HDFC would send engineer to do an exact valuation of the proposed property. Step 8: Signing of agreements and submitting post-dated cheques The borrower at this stage needs to sign the home loan agreement as an acceptance to the terms and conditions of the sanction. Step 9: Disbursement HDFC would finally disburse the loan amount based on the work progress or as per builder demand. HDFCs dedicated team of experts would maintain transparency throughout the process and offer a complete package to meet housing finance requirements of the borrower.

INTEREST RATES
1. Adjustable Rate of Home Loan Loan under Adjustable Rate is linked to HDFC LTD Retail Prime Lending Rate (RPLR). The rate on your loan will be revised every three months from the date of first disbursement, if there is a change in RPLR, the interest rate on your loan may change. 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.

CONT.
Applicable Variable rates % 10.15% Basis : RPLR minus Spread RPLR - 6.25

Loan Slabs Upto and including Rs 30 lacs Over Rs. 30 lacs

10.40%

RPLR - 6.00

2. Tru Fixed Home Loan Under this rate the customer has the option to choose a Fixed Interest Rate Period (FIRP) between 3 to 10 years Post the fixed rate period the loan will automatically convert to a variable rate product. The customer also has the option, subject to HDFC LTD eligibility norms to take a complete fixed rate term product for a fixed term of 3 to 10 years.

CONT.
Or, he can avail a long term loan of 15 to 20 years with a part fixed and part floating for the entire tenor of the loan. The full disbursement of the loan, irrespective of the fixed period chosen, shall have been availed within the first 3 years from the date of first disbursement of the loan. Post the fixed rate period the interest rates applicable on the loan shall be the then applicable HDFC LTD RPLR minus the spread as applicable currently on the loan amount being availed under this product.

Loan Slabs Up to and including Rs 10 lacs Rs.10.01 lacs to Rs.75 lacs Over Rs.75 lacs

Interest Rates during the Fixed Interest Rate Period ( % ) 10.75

11

11.25

OTHER CHARGES
Charges for late payment of EMI : 2% per month Cheque swapping charges : Rs.500/Bounce Cheque Charges : Rs.500/Duplicate Statement Charges (per statement) : Rs.100/- per page, Maximum Rs.300/Issue of Duplicate Provisional Interest Certificate : Rs.300/Issue of Duplicate Interest Certificate : Rs.300/Duplicate Balance Certificate : Rs.300/Issue of Amortization Schedule (Duplicate) : Rs. 300/Switch from Variable to Fixed : Not Applicable Switch from Fixed to Variable : Not Applicable Photocopy of Documents : Rs.500/-

BENEFITS TO CUSTOMERS
Automated Repayment of Home loan EMI You can give us standing instructions to repay your Home Loan EMIs directly from your HDFC Bank Savings Account, thus, saving you the trouble of procuring, signing and tracking post-dated cheques. HDFC also offers In-house scrutiny of Property documents for your complete peace of mind. Customer privileges If you are an existing HDFC Home Loan customer, you can avail of other loans (such as Personal Loans,Car Loans, Two-wheeler Loans and Loan against securities) at lower interest rates.

 Loan cover Term Assurance Plan HDFC Standard Life Insurance Company Ltd. offers an insurance plan. LCTAP provides a lump-sum payment on the unfortunate demise of the life assured. This pure risk plan is designed in a way that the cover decreases as you repay your home loan making it a low cost premium insurance plan.

RURAL HOUSING FINANCE

HDFC offers home loans in rural areas for: - Agriculturists - Dairy Farmers - Planters - Horticulturists Construction of houses on plot owned by you Addition of more rooms or floors to your existing house Renovation & improvement of your house Purchase of a new house

FEATURES
For Agriculturists: If you are a farmer/planter/horticulturist/dairy farmer etc. having your own land and looking to build your own home, get in touch with us. Specially Designed Housing Loans for Agriculturists. Loan eligibility on the basis of land owned by you and the crops being cultivated. Housing Loan in residential area of your own village Loans for buying house or flat in city of your choice

 For Salaried & Self Employed: Everyone wants a place to call home what better place than your village or town to own one. Housing Loans for homes in rural areas for Salaried persons Housing Loans for homes in rural areas for Self Employed Businessmen or Self Employed Professional.

DOCUMENTS
Agricult urists Application form with photograph Salaried Customers Application form with photograph Self Employed Professionals Application form with photograph Self Employed Businessme n Application form with photograph

Identity and Residen ce Proof Last 6 months bank stateme nts Processi ng fee cheque

Identity and Residence Proof

Identity and Residence Proof

Identity and Residence Proof

Last 6 months bank statements

Last 6 months bank statements

Last 6 months bank statements (self & business) Processing fee cheque

Processing fee cheque

Processing fee cheque

INCOME DOCUMENTS
Copies of Title Documents of Agricultural Land depicting Land holding Copies of Title Documents of Agricultural Land depicting crops being cultivated Statement of last 2 years of loans availed Latest Salary Slip Education Qualificatio ns Certificate and Proof of business Education Qualificatio ns Certificate and Proof of business

Form 16

Last 3 years Income Tax returns (self and business

Business profile & Last 3 years Income Tax returns

Last 3 years Profit /Loss and Balance Sheet

Last 3 years Profit /Loss and Balance Sheet

CUSTOMER SATISFACTION SURVEY

When have you taken Home Loan from HDFC Ltd.?

SAMPLE SIZE- 16

Before 1 year Before 2 to 3 year More than 3 years

Out of the people we have Surveyed i.e 16(Sample Size) ,44% Customers had taken their loan before 1 year followed by 31% people who have taken it for more than 3 yrs

Reason for taking Home Loan from HDFC Ltd.?

Reason for taking Home Loan from HDFC Ltd.? Faster Processing
Interest Rates Brand image of the Bank Margin Amount Others

In Our Survey We Found that 7 people i.e 44% people have taken home loan from HDFC because of its brand name followed by its processing fees that is 31% And interest rate that is 25%

How do you rate the Interest rates charged by HDFC Ltd.?

Highly Satisfactory Satisfactory Average Dissatisfactory Highly Dissatisfactory

This above figure shows us that how people have rated the interest rate charged by HDFC . we found that 47% people were satisfied ,24% of people were highly satisfied and 29% feel that its actually more when compared to other Housing Loan Companies.

How do you rate the EMI of HDFC Ltd.?

Highly Satisfactory Satisfactory Average Dissatisfactory Highly Dissatisfactory

On this particular question of the EMI plan of we got response like 25% people felt that the EMI that they are paying is better, and they are highly satisfied with it, same 25% people felt it was only satisfactory for them, And out of the rest 50%, 25% people rated it average while the rest 25% people felt that the are paying a bit more for the EMIs.

How do you rate the Sanctioning Time of HDFC Ltd.?

Highly Satisfactory Satisfactory Average Dissatisfactory Highly Dissatisfactory

People were actually very much satisfied with the sanctioning time of their loans out of 16 peoples we interviewed 8 peoples i.e. 50% of people felt that they are highly satisfied and other 50 % very also satisfied although not highly satisfied but they were satisfied.

How do you rate the Sanctioning Procedure of HDFC Ltd.?

Highly Satisfactory Satisfactory Average Dissatisfactory Highly Dissatisfactory

This is the area HDFC should focus upon as we found some of the people were dissatisfied with their sanctioning procedure. Although 50% of people were satisfied but there were some people like 44% who said the procedure was average and 6% people felt it was dissatisfactory

How do you rate the home loan services provided by your bank as compared to other bank?
Highly Satisfactory Satisfactory Average Dissatisfactory Highly Dissatisfactory

When the customers were asked about the overall service of the home loan when compared with other banks people had mixed results about it like 31% people were Highly satisfied same percentage of people also rated it Average and Satisfactory but 6% people found it Dissatisfactory.

Are you satisfied with HDFC Ltd. Home Loans?

Yes No

The people who have taken HDFC housing loan were actually satisfied with the home loan. Out of 16 people we surveyed 15 of them i.e. 94% were satisfied and 1 person out of the 16 felt they dint match up to his expectation which formed 6% of the total sample size.

FINDINGS
We found that people were satisfied with the interest rates charged by HDFC bank ltd. People have taken home loan from HDFC because of its brand name followed by its processing fees and interest rate. People felt that the EMI that they are paying is better, and they are highly satisfied with it. People were highly satisfied with the sanctioning time of loan of HDFC bank.

CONCLUSION
Overall ,customers are highly satisfied with HDFC bank ltd. and their housing loan services. HDFC bank is the one of the best option for taking home loan.