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FINANCE
INTPD0UCTIDN
Earlier it was very diIIicult to take a loan
Irom the Iinancial institutions. Interest
rates were high and a lot oI
documentation was there. But today
when there are a large number oI
Iinancial institutions in India, who are
providing credit Iacility, it has become
very easy to take a loan.
Terms and conditions are liberal
i.e. low interest rates, less documentation
etc. Interest rates are becoming globally
competitive and declining continuously.
Now a day just think oI purchasing a car
and car-Iinancing companies will start
knowing at your door and ringing your
phone.
Project Report on Credit Card & Debit Card
Future of HDFC Bank
Project Report on Loan Schemes of Banks -
Customer Awareness
Financial institutions have adopted liberal credit policies. They enquire less about end
use oI Iunds. Various types oI loans are there and easily available at cheap rates.
When we take the case oI home loans, it is a very saIe area oI loans Irom the point oI view
oI Iinancial institutions. They are easier to increase their share in the home loan sector. So they
are coming with the attractive schemes. Customers can have the beneIit oI liberal terms and
conditions as well as tax beneIits iI they choose to take a home loan. So the use has gain
attention. The increasing number oI home loans available today as strengthened the middle class
individual to venture Iorth and IulIill his dreams.
Today, the demands oI the current social status necessitate that varied means are tapped
into in order to achieve the ultimate goal-better living Home loan proposals are thus gaining
popularity due to their easy-installments schemes, low interest rates and high returns on the
standards oI living. While a home loan generally includes Iinancial Ior home extension, home
improvement loans are well as loans Ior property medication; the terms are more commonly
applied to Iinance schemes Ior purchasing houses.
Home Loan
Home loans are loans you have access to, depending on whether you want to buy or build
a house and can also be used to repair or extend an existing house.
Who can avail of these loans?
According to lending institutions, any Indian resident who is over 21 years oI age at the
beginning oI the loan and below 65at its maturity can avail oI the loan. Salaried Employees as
well as SelI- Employed citizens can apply. NRI Salaried and RBI SelI Employed, under RBI
guidelines, can approach only nationalized banks and other HDFC Ior loans.
Why should one option for a loan to buy a house?
Taking a loan seems like a good option when the money at hand is insuIIicient to buy the
house oI your dreams. Consider couples in their twenties and thirties. They enjoy a good income
currently, buy their accumulated capital isn`t enough to purchase a house. Whereas a home loan
can give them access to capital their current earnings.
Also, iI you take a 10 years old loan when you are thirty, you could repay it by the time
you`re Iorty. So you don`t have to be burdened with the interest and are Iree to plan your
retirement savings.
The uantum of Ioan that one can avaII of :
Loan sanctioned depend on your repayment capacity which is based on your current
income and your Iuture repayment capacity. You would include your spouse`s name to enhance
the loan amount.
The maximum loan can be sanctioned varies with each bank/institutions and ranges Irom
Rs.10 lakhs to Rs. 1 crore.
enefIts of takIng a home Ioan:
A home loan is very diIIerent Irom a personal loan like a car loan Ior instance. You can
utilize a home loan Ior Iinancing an asset that will hold its value and even appreciate over the
period oI the loan. Though its price could Iluctuate in the short terms, Total Estate will show
capital appreciation over the years.
The value oI your house generally while the loan remains constant. II you had opted to
wait, save up and buy a house, it would, in the long run cost you much more; home loans also
come with many tax beneIits.
Tax benefIts of takIng a home Ioan:
The income tax authorities look with Iavor upon those servicing a housing loan Irom
speciIied Iinancial institutions. And, it is up to you to be wise enough to take advantage oI this.
SectIon 24 of the Income Tax:
Interest on loan till Rs.1.5 lakhs per annum is exempted Iorm income tax (under section
23/24(1) oI th Income tax act).
Section 88 of Income Tax Act:
You get a 20 rebate on repayment oI principle during a Iinancial year. Once again, over
the years, the principle repayment eligible Ior rebate has been enhanced Irom Rs.10,000 to the
current limit oI Rs.20,000 Stamp duty, registration Iee or transIer oI such house property to the
assesses is also considered under this amount.
Financial Institutions, which give, home loans:
Leading Banks
Housing Iinance companies
Financial implications of availing a loan, small or big.
There are several expenses involved apart Irom repayment oI the actual loan amount:
1. Processing fees- A processing Iee (PF) is charges at the time oI submission oI the
application Iorm and covers expenses incurred Ior processing the application Iorm. This
Iee has to be paid upIront by the customer in some cases, it is non-reIundable.
2. Administration fees- to meet operating expenses.
3. Pre-EMI- A simple interest calculated on the disbursement amount in case oI a plot
under construction.
4. EMI- The EMI is an abbreviated Iorm oI the equated money installment and is simply
reIerred to as monthly installment in common parlance. And, being a selI-explanatory
term that is exactly what it is. The amount you will have to pay you Iinancier every
month when repaying your loan. Being a monthly payment, at the end oI the year, you
would have paid 12 EMIs.
Types of Ioans avaIIabIe
Broadly two types- Iixed rate and variable rate loans; while the Iormer deals with a Iixed
rate oI interest over the entire duration oI the loan, the latter has the rate oI interest changing
according to the Iluctuations in the market.
oan that one can avaII
Up to 85-90 oI the total cost based primarily upon the individual`s payback capacity.
eneral conditions that govern a home loan:
These are likely to vary with respect to the diIIerent types oI housing loans:
The maximum period oI the loan is normally Iixed by HFIs. However, HFIs do provide
Ior diIIerent tenors with diIIerent terms and conditions.
The Installment that you pay is normally restricted to amount 45 oI your monthly
gross income.
You will be eligible Ior a loan amount, which is the lowest as per your eligibility. This
is calculated on the basis oI your gross income and payback capabilities.
Some HFIs insist on guarantees Irom other individuals Ior due repayment oI your loan.
In such cases you have to arrange Ior the personal guarantee beIore the disbursement oI
your loan tasks place.
Most HFIs have a panel oI lawyers who go through your property documents to ensure
that the documents are clear and are not misrepresented. This is an added beneIit that you
get when you avail oI a loan Irom an HFI.

You repay the loan eIther
through 0eductIon agaInst Salary, Post dated cheques, and standIng
InstructIons or by Cash/00.

Contents
1. ntroductIon
2. DbjectIves
J. Fesearch |ethodology
4. Home Loan Scheme of 7arIous 8ank
S8 Home Loan Scheme
PN8 Home Loan Scheme
8D8 Home Loan Scheme
H0FC Home Loan Schemes
5. AnalysIs E FIndIng
. LImItatIons
7. FecommendatIons and ConclusIon
8. Annexure :
QuestIonnaIre
8IblIography