MAJOR RESEARCH PROJECT

Synopsis
“Comparative Study on various Home loan scheme of Public v/s Private sector bank”

A research project submitted as partial fulfilment for the award of the

Degree of master of business administration MBA
Batch (2017-19)

Submitted by:- Project guider:-

Nandani Choubey Mrs. Pallabi Mukherjee
MBA 3rd sem

Dep. Name: IBMR IPS ACADEMY

Rajendra Nagar , AB Road Indore-452012(M.P)
Affiliated to: Devi AhilyaVishwavidyalaya,
Indore
 Contents

1. Introduction

2. Details of company

3. Scope of Study

4. Review of Literature

5. Objective

6. Methodology
a) Research Design
b) Tools for data collection
c) Tools for data analysis

7. Bibliography / Webliography
 Introduction of Home Loan

“Home is where, there is one to love us”

-Charles Swain

In the recent year, the demand of home loan has increased dramatically. Part of the
reason for this increase is because the accessibility of loans has gotten bigger. Today,
home loans are available in the market at very low & good rates that meet the demands of
many home buyers.

A home represents the largest asset that typically people have & this is why home loans
have such a huge impact in the loan market today. When a person purchases a home, he
or she will be investing a huge amount of cash. Many people can’t come up with the
whole money to pay out the house, while some other can’t ever afford to invest money
for the house they will like to purchase. In past, this is how home loans have turned out to
be a benefit for people, who want to buy the home of their choice, but cannot afford it at
the time.

Nowadays home buyers don’t have to worry much about the source of money for their
home. Home loans have made the life of many house buyers much easier. But house
buyers should be very careful when choosing a home loan. Before doing anything else,
borrowers should make a thorough research of the current interest rates in the market, &
then opt or go for any home loan. Buyers could even go for home loans, by understanding
mortgages. This way, the borrowers can get a loan after pledging or securing any asset or
securities of their own, against amount of money borrowed by them.

When getting a home loan, the individuals should consider taking care of different
aspects related to the home loan. An individual should be very careful when deciding the
principal amount of the home loan being borrowed. Or else, the person may end up with a
very high principle amount and then he or she will have to pay more interest for the
money being borrowed unreasonably.

Something else a buyer should consider is the interest factor associated with every home
loan. Interest is surely an unnecessary burden that comes attached with the home loan.
Interest is that additional amount that the borrowers have to pay, for borrowing the loan
from the lender. The main idea is for a borrower to accept the loan with the lowest
interest rate possible. In order for this to happen, the person should do a complete
research of the current interest rate in the market so that he won’t end up getting cheated
by the home loan lenders.
 Profile of sampled Banks

Public sector bank :-

 STATE BANK OF INDIA (SBI)

Private sector bank :-

 The Housing Development Finance Corporation Limited (HDFC)

 Background of SBI

State Bank of India (SBI) is an Indian multinational, public sector banking and financial
services company. It is a government-owned corporation headquartered in Mumbai,
Maharashtra. The company is ranked 216th on the Fortune Global 500 list of the world's biggest
corporations as of 2017. It is the largest bank in India with a 23% market share in assets, besides
a share of one-fourth of the total loan and deposits market.

SBI has helped more than 40 lakh families for HOME LOAN and has been the largest
MORTGAGE LENDER.SBI offers Home Loans with loan tenure upto 30 years, the loan EMI
can be at low rates, to make it more affordable and convenient to meet your needs. The process
and disbursal takes little longer time than expected but your need is fulfilled with affordable
rates.SBI has an option of FLEXIPAY HOME LOAN. Now NRI customers can also complete
their dreams by setting their house in INDIA through SBI. Women have special offers and also
middle class families can avail their dream through SBI with Pradhan MantriYojana.

SBI Bank Home Loan Interest Rate:

SBI Home Loan not only offers attractive benefits and terms for its home loan options but the
bank also offers low competitive rates on its home loan.
As of 26 Nov 2018, the applicable interest rate for SBI home loan 8.30% to 8.60% for women
and 8.35% to 8.65% for general customers. The above mentioned rates are irrespective of the
loan amount.
 Background Of HDFC

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 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.
HDFC is India’s premier housing finance company and enjoys an impeccable track record
in India as well as in international markets. Since its inception in 1977, the Corporation
has maintained a consistent and healthy growth in its operations to remain the market
leader in mortgages. Its outstanding loan portfolio covers well over a million dwelling
units. HDFC has developed significant expertise in retail mortgage loans to different
market segments and also has a large corporate client base for its housing related credit
facilities. With its experience in the financial markets, strong market reputation, large
shareholder base and unique consumer franchise, HDFC was ideally positioned to promote
a bank in the Indian environment.
 Home Loan Interest Rates HDFC
HDFC home loan interest rates are in the range of 8.80% to 9.55%, with special discounted rates
for specific category of borrowers such as ladies borrowers for whom the bank offers the lowest
interest rate of 8.80%.

Products Interest Rates

HDFC Home Loan Floating 8.80% - 9.05%

Plot Loan Floating 8.80% - 9.55%

Rural Housing Finance Floating 8.80% - 9.70%

HDFC Home Improvement Loan 8.80% - 9.05%

HDFC Home Extension Loan 8.80% - 9.05%

HDFC Short Term Bridging Loan 9.90%

HDFC Home Loan Top Up 8.80% - 9.00%

 Need of study

“Every one of us needs a place of our own, which we call as HOME”

Purchasing the home of your is not an easy task. Especially when you plan to buy a home on
loan. Home loan means tht you buy a house on installment. In simpler term when you want to
own a home & cannot afford to pay the amount in lump sum, you can pay in it monthly
installment with an interst rate . There are number of companies offer cheap loans at a low
interest rate you can avail loan against existing house for renovation or expansion etc. The
demand for home loans will not sag much. The reason is a substantial rise in the income-
generating capability of India youth. My research work will help the loan seeker to understand
various schemes of house loans given by HDFC & SBI bank.
 Review of literature

Housing finance all over the world are undergoing tremendous

changes and have acquired great significance in the present day context
of liberalization, globalization and modernization of the society. A good
number of research works have been undertaken by individual
researchers and institutions invariably dealing with different aspects of
housing finance. A brief review of the major studies which are
particularly pertinent for the present study is attempted here.
By analyzing the question of housing in the country, Ananda Bose,
C.V (1996) emphasized the need for propagating cost-effective and
environment friendly building technology. He also underlined the need
for bringing out a new design and construction culture, avoiding costs and
eliminating wrong notions.

1) In an article entitled “Is Housing Finance Safe as Houses?”,

Srinivas Subbarao,P (2006) explained the factors influencing the housing

finance, advantages of housing finance to banks and the drawbacks in
housing loans. He highlighted the fact that Non-Performing loans in the
Indian housing finance sector are much higher than those experienced in
a developed market such as the U.S. This is a reflection of the industry’s
aggressive marketing tactics and some inadequacies in appraisal
standards and systems. Banks therefore should concentrate on providing
loans within the prudent credit norms for eligibility and margin. If the
Banks have not taken the prudential norms for housing loans they have to
conduct recovery mela instead of present loan mela.
 2) Praveen Gupta (2005), in his article, “Housing Finance Companies

– An Insight into Regulatory Aspects”, stated that HFCs, both in public

and private sectors, play an important role in providing housing finance in
India. He critically evaluated some key regulatory aspects pertaining to
HFCs in the light of various directives and guidelines issued by the NHB.

3) Avtar Singh Sahota (2005) in his article, “Schemes on Rural

Housing”, narrates the new demand for dwelling units as a result of rapid
growth of population and deterioration of old housing stock and the
Governments commitment to provide shelter to all. He also made an
evaluation of the various housing schemes for the rural poor and the
initiatives taken by the state Governments. He suggested that while
searching for technology option in rural housing, certain predominant
aspects should be kept in view, such as, using locally available materials
in abundance, using traditional though validated construction practices
and technologies, using improved construction systems, and adopting
options, which are least energy consuming and environment – sensitive.

4) In the article titled “Huge Untapped Potential”, Nitin Palany (2004)

described the evolution of housing finance industry and stated that there
is a huge potential for housing finance which can be tapped across the
country. He also stated that there is room for every player in the housing
finance market. He opined that in the midst of the information explosion,
borrowers sometimes find it difficult to decide the right lender for which
he has given a check-list to borrowers to take a right decision.
 5) In the article titled, “Growth at a Brisk Pace”, Rao,R.V.S (2003),

stated that the housing finance sector has been growing at a brisk pace
due to the increased demand for housing consequent to the lowering
interest rates, tax concessions and increasing incomes. To meet the
increased demand for housing and the lower probability of losses
prompted varied players to enter the sector. He opined that however, not
all players are likely to succeed and to withstand competition they should
render technology-enabled value added services.
 Objections of the study

 To study the differences between Housing-loans Provides by SBI & HDFC Bank
 To study the cost of home loans provided by the SBI & HDFC BANK
 TO know various rates available while providing home loan.
 To understand current scenario of the “ India Housing Finance”.
 To know the necessary documents which are needed taking housing loan of SBI & HDFC
BANK.
 RESEARCH METHODOLOGY

 Research Designe

Research methodology is a way to systematically solve the research problem. Itis a way
of written game plan for conducting research. In this we describe the various steps that
are taken by a researcher. So it is therefore desirable to designa research methodology.
For this research the research methodology is designedas under:

 Source of data collection

(i) Primary Data:

A survey will be conducted to get the primary information. It is the data which is
collected directly that is for the first time in my project I will be Used :
• Personal Interview
• Questionnaire

(ii) Secondary Data:

For the secondary data, the pamphlets of various schemes from different bankshave been
obtained.

 Analysis of data:

I will do analysis of my questionnaire manually

 WEBLIOGRAPHY

WWW.google.com
http://www.sbibank.com//homeloans
https://www.hdfcbank.com//homeloan
https://www.loannews.info/home-loan/hdfc-home-loan/