CHAPTER 1

INTRODUCTION

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1.1 SELECTION AND RELEVANCE OF THE PROBLEM :

Home loan is a very effective method of increasing your ability to invest in a home
and it has many benefits but a borrower has some doubts before applying for a home
loan. From buying a house to construction or renovation, there are many ways in
which a home loan is very helpful. There are many options available in the market
and choosing the best one might be a bit confusing for many borrowers. Before
choosing a home loan scheme, Check your funds and income. Make sure that you
have extra funds for any emergency. Buying a house is a huge investment and a home
loan is really helpful in making it easier but there are certain things you should check
certain factors before applying for a home loan.

Getting a Home Loan from ICICI Bank is easy and quick. We know you may need a
Home Loan for the purpose of buying or constructing a new home, and in some cases,
to renovate the house you currently live in. Whatever the reason, we keep the
paperwork and other formalities to a minimum so that you are not stressed out. Home
Loan documentation is simple. The list of documents required for a Housing Loan are

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the proof of your identity, address and income. A Home Loan is a form of financial
aid extended by banks to help you purchase or construct your house. While selecting a
Home Loan, you need to consider various aspects such as the amount offered, the
interest rate levied, the repayment options, etc. One such factor that is vital to your
selection process is the Home Loan Tenure.

Top 6 factors for selecting the right Home Loan:-

1) Home Loan Eligibility Calculator :

An essential first step is to use a Home Loan Eligibility Calculator. This tool gives
you an initial assessment of the loan amount you may qualify for based on your
income, existing debts, and other financial commitments. However, eligibility is more
than just figures; it is about understanding your financial stability and prospects.

2) Processing fees and other charges :

Look out for processing fees, administrative charges, and penalty clauses. These can
vary significantly and impact the overall cost of your loan. Some lenders offer
waivers or discounts on these fees, which can result in substantial savings.

3) Customer service and support :

Responsive and efficient customer service can significantly enhance your borrowing
experience. Easy access to your loan account, clarity on your repayment schedule, and
quick resolution of queries are essential service aspects.

4) Flexible repayment options :

Flexible repayment options can ease your financial burden. Some lenders offer
innovative solutions like step-up or step-down repayment plans, where the EMI
amount changes according to your financial lifecycle.

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5) Loan-to-value ratio (LTV) :

ratio is the percentage of the property’s value that the lender is willing to finance. A
higher LTV means you need to fund a smaller portion of the property’s value from
your pocket. However, a higher LTV might also mean a higher interest rate.

6) Insurance cover for Home Loans :

Opting for insurance coverage along with your Home Loan can be prudent. It ensures
that in case of any unforeseen circumstances, your family’s burden of loan repayment
is reduced. Check the options the lender offers in terms of the types of insurance
options offered.

RELEVANCE

Home loans are relevant for individuals seeking to finance the purchase of a home.
They play a crucial role in making homeownership more accessible by providing
funds that cover the property's cost. The relevance of home loans extends to various
aspects, including:

1) Affordability:

Home loans enable individuals to buy a home without having to pay the entire
purchase price upfront, making homeownership more affordable.

2) Financial Planning:

Home loans allow for spreading the cost of a home over an extended period, making
it easier for borrowers to budget and plan their finances.

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3) Investment:

Real estate is often considered a valuable investment. Home loans enable people to
invest in property and potentially benefit from property appreciation over time.

4) Tax Benefits:

In some regions, homeowners may be eligible for tax benefits on mortgage interest
payments, providing an additional financial incentive.

5) Economic Stimulus:

The availability and accessibility of home loans contribute to economic growth by

supporting the housing market and related industries.

6) Improving Credit Scores:

Successfully managing a home loan and making timely repayments can positively
impact an individual's credit history, potentially improving their credit score over
time.

1.2 HISTORICAL BACKGROUND OF THE PROBLEM :

Banking in India is very old. Nationalised banks are in existence since 1969.
However, Home Loans are a comparatively new product. In the 1970s, there was no
concept of Home Loans in India.

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The First Home Loan Borrower

The credit for availing the first Home Loan goes to one D B Remedios took a Home
Loan of 30,000 from HDFC in 1978 to construct his house in Malad, Mumbai. The
total cost of the house was 70,000. Thus, you can see that Home Loans are just four
decades old.

The Home Loan Scenario

In the past, the mentality of the people was to save and purchase. People used to dip
into their Provident Fund savings and retirement benefits to raise money for
constructing houses. HDFC started the trend of Home Loans in 1978. Banks were
reluctant to finance Home Loans because there was no recovery mechanism in place.
The only recourse available to banks was to file a civil suit in the court of law. The
litigation expenses were higher than the actual loan amount.

It can surprise you that the Home Loan interest rates were around 11-14% up to
1994.The average age of the Home Loan borrower was about 42 years with the
average amount of loan being 39,000 (Source HDFC).

With the opening of the economy in 1991, banks started to enter the Home Loan
market. ICICI Ltd (later on merged with ICICI Bank) ventured into the Home Loan
market in 1999. The year 2000 saw the introduction of the floating rate concept by
ICICI Bank. The rates started plummeting from around 2003-04 when floating rates
for Home Loans were in the range of 7% to 7.25%. The fixed rates were around 7.5-
8%.

State Bank of India entered the market in a big way and introduced the teaser rate
concept. They could afford to do so because of the high proportion of CASA (Current
Account Savings Account) deposits. Other banks did not have this advantage. They
resorted to measures like maintaining high Loan to Value (LTV) ratios to attract
customers.

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During the early days of Home Loans, the LTV ratio used to be less than 50%. The
increase in the competition saw the LTV ratios go up to even 120%. Subsequently, the
Reserve Bank of India (RBI) capped it at 80%. Banks have the freedom to go up to
90% in case the loan is for less than 30 Lakhs.

For many decades the only type of mortgage an average person could get was a fixed-
rate 15- or 30-year loan. In the late 1970s interest rates in the United States rose
sharply. Because the interest rate for a home loan has a direct impact on the size of the
mortgage payment (higher interest rates mean higher monthly payments), fewer
people could afford to buy homes or qualify for mortgages. This situation was made
more difficult by a high rate of inflation (the general rising of prices), which lowered
the value of any money that people had saved up. In order to encourage borrowing,
lenders responded by offering new types of mortgages with lower monthly payments
or artificially low interest rates. Among these were adjustable-rate mortgages whose
interest rate (and therefore whose monthly payments) changed over time and interest-
only mortgages whose monthly payments included only the interest on the loan and
no repayment of principal.

Over time these new types of home loans contributed to a surge in lending and a
nationwide increase in housing prices beginning in the late 1990s. This trend helped
stimulate economic growth by generating income for those who invested in existing
properties and for those involved in building new ones. The banking industry got a
boost from people taking out second or third mortgages on their homes in order to
take advantage of historically low interest rates. Some economists speculated that
these loans put the national economy at risk because a downturn in housing prices or
an increase in interest rates would leave many people with loans they could suddenly
no longer afford to repay, which could lead to a large increase in the number of
foreclosures across the country.

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ICICI was formed in 1955 at the initiative of the World Bank, the Government of
India and representatives of Indian industry. The principal objective was to create a
development financial institution for providing medium-term and long-term project
financing to Indian businesses. Until the late 1980s, ICICI primarily focused its
activities on project finance, providing long-term funds to a variety of industrial
projects. With the liberalization of the financial sector in India in the 1990s, ICICI
transformed its business from a development financial institution offering only project
finance to a diversified financial services provider that, along with its subsidiaries and
other group companies, offered a wide variety of products and services. As India’s
economy became more market-oriented and integrated with the world economy,
ICICI capitalized on the new opportunities to provide a wider range of financial
products and services to a broader spectrum of clients. ICICI Bank was incorporated
in 1994 as a part of the ICICI group. In 1999, ICICI became the first Indian company
and the first bank or financial institution from non-Japan Asia to be listed on the New
York Stock Exchange.

The Industrial Credit and Investment Corporation of India (ICICI) was a government
institution established on 5 January 1955 and Sir Arcot Ramasamy Mudaliar was
elected as the first Chairman of ICICI Ltd. It was structured as a joint-venture of the
World Bank, India's public-sector banks and public-sector insurance companies to
provide project financing to Indian industry. ICICI Bank was established by ICICI, as
a wholly owned subsidiary in 1994 in Vadodara. The bank was founded as the
Industrial Credit and Investment Corporation of India Bank, before it changed its
name to ICICI Bank. In October 2001, the Boards of Directors of ICICI and ICICI
Bank approved the merger of ICICI and two of its wholly-owned retail finance
subsidiaries, ICICI Personal Financial Services Limited and ICICI Capital Services
Limited, with ICICI Bank. The merger of parent ICICI Ltd. into its subsidiary ICICI
Bank led to privatization.

In October 2001, the Boards of Directors of ICICI and ICICI Bank approved the
merger of ICICI and two of its wholly-owned retail finance subsidiaries, ICICI
Personal Financial Services Limited and ICICI Capital Services Limited, with ICICI

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Bank. The merger was approved by shareholders of ICICI and ICICI Bank in January
2002, by the High Court of Gujarat at Ahmedabad in March 2002, and by the High
Court of Judicature at Mumbai and the Reserve Bank of India in April 2002.
Consequent to the merger, the ICICI group's financing and banking operations, both
wholesale and retail, were integrated in a single entity.

In 1955 ICICI was formed as an initiative of the World Bank. In the 1990s, ICICI
transformed its business from a financial institution limited to development projects to
a diversified financial services group. Ever progressing with the times, ICICI
addressed a need to upgrade its corporate structure to that of universal banking.

The merger of ICICI with ICICI bank seemed like a natural step in line with its newly
adopted universal outlook. This would enhance value for ICICI shareholders with
low-cost deposits, increased fee-based income, participation in the payment system
and transaction banking services. It would also greatly benefit ICICI Bank
shareholders through a large capital base and scale of operations, access to corporate
relationships built over five decades, new business segments and more.

The Success Journey

In 1994, ICICI Bank was promoted, by ICICI Limited, the Indian Financial
Institution.

In fiscal 1998, through a public offering of shares in India, ICICI’s shareholding in

ICICI Bank was reduced to 46%.

In 1999, ICICI become the first Indian company and the first bank or financial
institution from non-Japan Asia to be listed on the NYSE.

2000 saw an equity offering in the form of ADRs listed on the NYSE.

In fiscal 2001, ICICI Bank acquired Bank of Madhura, in an all-stock amalgamation.

In 2001 & 2002, ICICI propagated secondary market sales to institutional investors.

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In October 2001, the Boards of Directors of ICICI and ICICI Bank approved the
merger of ICICI and two of its wholly-owned retail finance subsidiaries, ICICI
Personal Financial Services Limited and ICICI Capital Services Limited, with ICICI
Bank.

In 2002, the shareholders along with the High Court of Gujarat and the High Court of
Judicature as well as the Reserve Bank of India, approved the merger.

In December 1996, Boards of ICICI Bank and The Sangli Bank Limited at their
respective meetings approved an all-stock amalgamation of Sangli Bank with ICICI
Bank.

In April 1997, RBI approved the scheme of amalgamation.

In August 2010, the amalgamation of Bank of Rajasthan Ltd. with ICICI Bank Ltd.
came into effect. The merger substantially enhanced the combined branch network to
over 2500 across the country.

On March 17, 2020, ICICI Bank announced the launch of 'ICICIStack', a set of the
country's most comprehensive digital banking services to ensure uninterrupted
banking experience to customers at a time when they are advised to stay indoors in
the wake of the coronavirus outbreak. At ICICI Bank, we believe that digitally-
enabled banking solutions not only empower our customers to fulfil their ambitions
but also create value for our stakeholders.

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1.3 BRIEF PROFILE OF THE STUDY AREA :

Bank: ICICI BANK

IFSC: ICIC0003402

MICR Code: 400229240

Branch Code: 003402 (Last Six Characters of IFSC Code)

Branch: Kalwa

City: Thane

District: Thane

State: Maharashtra

LOCATION :-

ICICI Bank Ltd, Thane (Kalwa) Parsik Nagar

ICICI Bank Ltd, Ground Floor, Shop No. 10 to 12, Maitri Vatika Bldg, Parsik Nagar,
Old Mumbai Pune Highway, Kalwa (W), Thane - 400605, Maharashtra, Thane,
Maharashtra, 400605.

TIMINGS :-

Tuesday 9:30 am–3 pm

Wednesday 9:30 am–3 pm

Thursday 9:30 am–3 pm

Friday 9:30 am–3 pm

Saturday 9:30am–3am

( 2nd and 4th remain closed )

Sunday Closed

Monday 9:30 am–3 pm

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Documents required for loan sanction :-

At ICICI Bank we require the following documents to sanction your home loan:

Documents Sanction :-

➢ Duly Completed Application Form

➢ Photograph
➢ Fee cheque
➢ Photo identity proof
➢ Age proof
➢ Signature verification proof
➢ Residence address proof

Documents for salaried people :-

➢ Last three months salary slips

➢ Form 16
➢ Bank statements for last 6 months from salary account
➢ Repayment track record of existing loans

Documents specific for Self Employed

➢ Income Tax Return / Computation of Total Income / Auditors Report /

Balance Sheet / Profit & Loss Account certified by Chartered Accountant for
last 2 years (3 years for Home Equity) (both for business and personal of
partners/directors)
➢ Statement for last 6 month from operating account
➢ Repayment Track record of existing loans / Loan closure letter
➢ Board Resolution in case of a company
➢ Proof of existence Bank
➢ Office Address Proof
➢ Photo Identity Proof, Residence Address Proof, Signature Verification is
required to be provided for all the main partners / directors.

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These are the documents required for sanctioning a loan. You may be asked to submit
further legal documents if required by ICICI Bank or its approved lawyers. Do retain
photocopies of all documents being submitted by you.

OVERVIEW :-

ICICI Bank Ltd in Kalva, Mumbai is one of the leading businesses in the Private
Sector Banks. Also known for Banks, Private Sector Banks and much more. ICICI
Bank offers a range of financial services, including savings accounts, loans, credit
cards, and investment options. It provides online banking facilities, mobile banking
apps, and ATMs for convenient access to services. Specific facilities can vary, so it's
advisable to check their latest offerings on their official website or contact them
directly for the most accurate and up-to-date information.

1.4 Definitions of related aspects :

A home loan, also known as a mortgage, is a financial product that enables

individuals to borrow money from a financial institution, typically a bank, to purchase
or refinance a residential property. The borrower repays the loan over a specified
period, usually in monthly installments, which include both principal and interest. The
property itself serves as collateral, and failure to repay may result in foreclosure.

ICICI Bank, headquartered in Mumbai, India, is one of the largest private sector
banks. "ICICI" stands for Industrial Credit and Investment Corporation of India,
reflecting its origin as a financial institution. The bank provides a wide range of
financial services, including retail and corporate banking, insurance, and asset
management.

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Here are key components and definitions related to home loans:

1) Principal:

The original amount borrowed to purchase the home.

2) Interest Rate:

The percentage charged by the lender on the outstanding loan amount. It determines
the cost of borrowing and influences monthly payments.

3)Loan Term:

The period over which the borrower agrees to repay the loan. Common terms are 15,
20, or 30 years.

4) Monthly Mortgage Payment:

A regular payment made by the borrower, typically consisting of principal and

interest. It may also include property taxes and home owners insurance.

5) Down Payment:

The initial payment made by the borrower when purchasing a home, expressed as a
percentage of the property's purchase price.

6) Amortization:

The gradual repayment of the loan through scheduled, fixed payments over time. In
the early years, payments are primarily interest, with more applied to the principal
over time.

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7) Fixed-Rate Mortgage (FRM):

A mortgage with a constant interest rate throughout the loan term, providing stable
monthly payments.

8) Adjustable-Rate Mortgage (ARM):

A mortgage with an interest rate that may change periodically, often in relation to an
index, affecting monthly payments.

9) Closing Costs:

Fees associated with finalizing the home purchase, including appraisal, title search,
and legal fees.

10) Equity:

The portion of the property owned outright by the homeowner, calculated as the
home's market value minus outstanding mortgage balance.

11) Foreclosure:

You generally repay a Home Loan through regular EMI payments. However, you can
also pay off the amount borrowed through a foreclosure. A foreclosure is simply the
closing of a Home Loan by paying off the entire amount borrowed in one lump sum
amount. It is part of the regular Home Loan process and allows you to pay off the
borrowed amount before the EMI schedule. You simply have to insert all required
details about your Home Loan, such as the tenure, interest rate, and loan amount.
Then you must provide the number of months for which you have already paid the
EMI and the month of foreclosure. The month in which you decide you foreclose your
loan account is known as the Foreclosure Month.

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1.5 CHARACTERISTICS :

1) Tax benefits :-

The foremost benefit of a home loan is the income tax deduction you can claim on the
interest and principal repayments. You can claim up to Rs.1.5 lakh on principal
repayments u/s 80C, up to Rs.2 lakh on interest repayments u/s 24B, up to Rs.2 lakh
on interest repayment in special circumstances u/s 80EE and 80EEA, and up to Rs.1.5
lakh on stamp duty expenses u/s 80C.

2) Lower interest rate :-

The home loan interest rate is much lower as compared to any other loan types
available. If you come across a cash crunch, you may get a top-up on the existing
home loan at a lower interest rate than a personal loan to solve the issue.

3) Due diligence of property :-

When you go through a bank to purchase a house, the bank will conduct thorough
checks on the property from the legal perspective and check if all the documents
produced are valid. This due diligence check from the bank’s end will reduce the risk
of you being scammed. If the bank approves the property, that means you and your
house are safe.

4) Long repayment tenure :-

Unlike any other loans, home loans come with longer repayment tenure, as much as
25-30 years. This is owing to the significant loan amount one will have to borrow to
purchase a house. Spreading the loan amount and interest applicable over a longer
tenure will reduce the monthly EMIs reducing the borrower’s burden.

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5) No prepayment penalty :-

When you take a floating-rate home loan, you can make prepayments towards the
loan whenever you have a lump sum at hand without having to pay any prepayment
penalty. This will help you close the home loan much before the set loan tenure.

6) Balance transfer facility :-

A balance transfer facility for a home loan allows borrowers to transfer their existing
home loan from one lender to another, typically to take advantage of lower interest
rates or better terms offered by the new lender. This process can help borrowers save
on interest costs and potentially reduce monthly payments. However, it's crucial for
individuals considering a balance transfer to carefully assess associated fees,
eligibility criteria, and any potential impact on their credit score. Conducting thorough
research and understanding the terms of the new loan is essential to make an informed
decision and maximize the benefits of a home loan balance transfer.

7) Collateral :-

In a home loan, the property being financed serves as collateral. This means that if the
borrower fails to repay the loan, the lender has the right to take possession of the
property through a legal process called foreclosure. The collateral provides security
for the lender, assuring them that they have a valuable asset they can claim if the
borrower defaults on the loan. The lender's interest in the property typically lasts until
the loan is fully repaid.

8) Amortization:-

Amortization on a home loan refers to the gradual repayment of the loan through
scheduled, periodic payments. Each payment covers both principal and interest, but
the proportion changes over time. Initially, more of the payment goes towards
interest, while later payments contribute more to reducing the loan principal. This
systematic repayment process continues until the loan is fully paid off. Amortization

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schedules outline these payments, helping borrowers understand how their mortgage
balance decreases over the loan term.

9) Prepayment penalties :-

Prepayment penalties on home loans are fees charged by lenders when borrowers pay
off a significant portion or the entire loan before the agreed-upon term. These
penalties are designed to compensate the lender for the interest income they would
have received if the borrower had stuck to the original repayment schedule. It's
important for borrowers to carefully review their loan agreement to check for
prepayment penalty clauses. Some loans may have fixed penalties, while others might
have a sliding scale that decreases over time. Additionally, some loans may allow
prepayment without penalties after a certain period. Understanding the terms related
to prepayment can be crucial, especially for those considering early repayment or
refinancing options, as prepayment penalties can impact the overall cost of the loan.
Always consult with the lender and carefully review the loan agreement to grasp the
specific conditions and potential penalties associated with prepayment.

10) Private mortgage insurance (PMI) :-

Private Mortgage Insurance (PMI) is a type of insurance that lenders often require
borrowers to obtain when they have a down payment below a certain percentage,
typically 20% of the home's purchase price. PMI protects the lender in case the
borrower defaults on the loan. PMI allows borrowers to secure a mortgage with a
lower down payment, making homeownership more accessible.

11) Loan term :-

The loan term in a home loan refers to the duration over which the borrower agrees to
repay the loan. Common loan terms for mortgages include 15, 20, or 30 years. The
chosen term affects monthly payments; longer terms generally result in lower monthly
payments but may lead to higher overall interest costs. Shorter terms often have

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higher monthly payments but can save on total interest paid over the life of the loan.
Borrowers should consider their financial situation and goals when selecting a loan
term.

12) High loan value :-

The loan value for a home loan is typically determined by factors like your
creditworthiness, income, and the appraised value of the property. Lenders generally
consider a percentage of the property's value as the loan amount, known as the loan-
to-value ratio. Higher credit scores and lower debt-to-income ratios may allow for a
higher loan value. It's advisable to consult with lenders to understand your specific
situation.

13) Flexible repayment schedule :-

A flexible repayment schedule can benefit your startup in a number of ways. First, it
can help you free up some cash flow. If you're making monthly payments on a
standard 10-year repayment plan, that's a lot of money that could be going towards
other things, like investing in your business. Second, a flexible repayment schedule
can help you manage your debt. If you have a lot of debt, it can be difficult to keep
track of everything and make sure you're making all of your payments on time. But if
you have a flexible repayment schedule, you can tailor your payments to fit your
budget and make sure you're always keeping up with your debt. Finally, a flexible
repayment schedule can give you some peace of mind. If you're worried about making
your student loan payments, it can be helpful to have a repayment plan that's flexible
and that you can adjust as needed. That way, if your income changes or your expenses
go up, you can make changes to your repayment plan so that it still works for you.

If you're a startup owner, a flexible repayment schedule can be a valuable tool. It can
help you free up cash flow, manage your debt, and give you peace of mind. So if
you're struggling to make your student loan payments work for you, consider
switching to a flexible repayment schedule. It could be just what you need to get your
business off the ground.

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14) Moratorium Period :-

Moratorium period is simply the period in any loan in which the borrower gets a
break from making the Equated Monthly Instalment or EMI payments. It is often
referred to as an ‘EMI holiday’ since there is no pressure of paying the monthly loan
instalments during this period. Moratorium periods are especially common in case of
education loans, where the student can begin paying off the EMI 6-12 months after
completing their course since they do not have a steady income during their years at
university and it takes time until they can find employment.

In case of delayed construction, lenders allow borrowers to encash their moratorium

period facility only if this clause is included in the home loan agreement between the
lender, borrower and the property developer. For under construction properties,
lenders provide a grace period of 18 months or one month post possession, whichever
is earlier whereas in case of ready-to-move-in properties, the grace period is generally
very short i.e. one month.Home buyers can typically opt for a moratorium period in
the event that the project they’ve invested in gets delayed and they are not in the
position to double their monthly outflow for their living arrangement i.e. paying rent
for the current premises they are occupying along with the home loan EMIs.Even
though the loan repayment begins the moment the home loan amount is disbursed to
the borrower, they are allowed to defer the EMI payments until they are given
possession of the house, in case of delayed construction. This grace period also allows
borrowers to maintain their budget since it gets difficult to pay for both, home rent as
well as high amount EMIs.

15) Balance transfer :-

To transfer your home loan balance, contact your existing lender to understand the
process and any associated fees. Compare offers from other lenders, considering
interest rates and terms. Once you select a new lender, submit the required documents
for approval. Keep in mind that eligibility criteria may apply.

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1.6 Different concepts pertaining to the problem :-

1) Home construction loan :-

Securing a home construction loan involves working with a lender to obtain financing
for building a new home. Typically, these loans have two phases: the construction
phase and the permanent mortgage phase. During construction, you borrow funds as
needed to pay for the building process. Once the home is complete, the loan
transitions to a traditional mortgage. Ensure a solid credit score and detailed
construction plans when applying for such loans.

2) Balance transfer loan :-

A balance transfer loan typically involves moving the outstanding balance from one
loan or credit card to another with more favorable terms, such as lower interest rates.
It can help save money on interest payments.

3) Down payment :-

A down payment on a home loan is an upfront payment made by the buyer, typically
a percentage of the home's purchase price. It's an essential part of securing a mortgage
and can affect the loan amount and interest rates. The specific amount required varies,
but it's commonly around 20% of the home's value.

4) Plot loan :-

A plot loan, often termed as a land loan, is a type of loan specifically designed for
purchasing a plot of land. While a home loan typically covers both land and
construction, a plot loan focuses solely on acquiring the land. Interest rates and terms
can vary, so it's essential to check with lenders for specific details based on your
location and financial situation.

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5) Home extension loan :-

A home loan extension is an extension of tenure to repay an existing loan. When a

home loan debtor may not be able to pay the EMIs in the agreed duration under
certain circumstances, they might consider a home loan extension. This provides
relief for the debtor. On the other hand, any person who wishes to extend their
existing house to increase its living space can apply for a home extension loan. A
debtor can get these loans for a maximum tenure of 20 years for up to 90% of the
construction estimate. This article decodes what home loan tenure, home extension
loans, home loan duration, tips on extending their house, and more.

A home loan is one of the biggest liabilities one will ever face in their lifetime. Apart
from being the longest-tenured loan. It also has the highest interest rate. Therefore,
most home loan borrowers are constantly seeking ways to reduce the amount they pay
on their equated monthly installments (EMIs). One can consider extending their home
loan tenure if they are under financial stress and want to reduce their EMI. When
one’s home loan has 10 years left to run at 7.5% and the tenure is extended to 20
years, one can save Rs 15,257 on one EMI.

6) Credit score :-

A credit score is an indicator of a person’s creditworthiness, or their ability to repay

debt. It is usually expressed as a number based on the person’s repayment history and
credit files across different loan types and credit institutions. Credit score is also
known as a credit rating. In India, there are four credit information companies
licensed by Reserve Bank of India. These are Credit Information Bureau (India)
Limited (CIBIL), Experian. A good CIBIL credit score is considered to be 750 or
higher. Banks and lending institutions use credit scores to assess whether you are
worthy of credit. The better your credit score, the higher are the chances of getting
your loan approved. You are also likely to get additional benefits, such as low interest
rates, better repayment terms and quicker loan approval process.n, Equifax and
Highmark. The most popular credit score in India is the CIBIL rating. The CIBIL
credit score is a three-digit number, which ranges from 300 to 900, with 900 being the
best score. A good CIBIL credit score is considered to be 750 or higher. Banks and
lending institutions use credit scores to assess whether you are worthy of credit. The

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better your credit score, the higher are the chances of getting your loan approved. You
are also likely to get additional benefits, such as low interest rates, better repayment
terms and quicker loan approval process. Your credit score is calculated by an
algorithm than takes into account several factors. Each factor gets a different
weightage in the calculation.

The factors under consideration include the following:

➢ Your repayment history across debt categories (such as loans and credit cards)
➢ Your total credit balance
➢ Balance between secured and unsecured loans
➢ Number of loans and credit cards you have
➢ Credit utilization

You should ideally check your credit score before applying for a loan or credit card.
Place an online request to receive your credit score on the credit rating company’s
website. The credit rating agency may charge you for this service.

7) Decreasing EMI plan :-

A loan may be taken in order to fulfill any life goal or finance an immediate need.
However, one must remember that a loan is also an added expense, considering the
interest which banks levy on the EMI payable. A higher rate of interest can make
repaying your home loan that much costlier. With a higher rate of interest, the amount
of EMI which you have to pay automatically goes up. There are certain ways or tips
which can help you save money on your loan EMI. From negotiating with your
lending company to changing your lender, listed below are some of the ways in which
you can bring down the cost of your loan.

Down payment is the amount the customer pays upfront at the time of purchase of the
respective item. Since a part of the total price of the item is borne by the customer, the
amount that the customer will have to borrow as loan will also come down. The
interest of a loan is calculated based on the principal amount borrowed by the
customer. Therefore, the higher the loan amount, the more money you will have to
pay as interest and the higher your EMI amount will be. Therefore, it is a wise

23
decision to pay a large amount as down payment. This will not only help you reduce
the EMI of your loan, but will also help you save big in the long run.

The term of loan repayment is inversely proportional to the amount of EMI for a
particular loan amount. When you opt for a long loan tenure, the total due amount is
distributed over a longer span of time. This, in turn, reduces the payable amount as
monthly installments. However, choosing for a longer term also means that you will
be charged a rate of interest on the outstanding debt for an extended duration. While
increasing the loan tenure can decrease your EMI, it can translate to a larger amount
of interest over the course of the loan tenure. Therefore, you should be very careful
before extending your loan tenure and always weigh all the pros and cons before
increasing the duration of the loan.

There are numerous banks and non-banking financing companies that provide their
customers with the option of a Step-Down EMI Plan. According to this scheme, when
a borrower avails a loan, he or she has to pay a larger amount as EMI during the start
of the tenure. As time progresses, the EMI amount gradually decreases as the
principal amount decreases after each monthly payment. This plan can help reduce the
interest burden during the later part of the loan tenure. Therefore, this kind of flexi-
EMI scheme is best suited for people who are closer to their retirement as it is based
on the cash flow needs of the customer.

If you're already a customer with a certain bank, it would be a wise option to consider
the same bank for purchasing a loan. This could work in your favor if you have a
good standing with your bank, in which case they may be very likely to provide you
with a lower rate of interest on your preferred loan. Considering the above point,
where the individual has a good standing with their bank, they may be in a position to
negotiate with the bank for a lower rate of interest on the loan. Banks may be willing
to do so for their existing customers in order to increase brand loyalty and also attract
more customers.

8) Reverse mortgage loan :-

A Home Equity Conversion Mortgage (HECM), the most common type of reverse
mortgage, is a special type of home loan only for homeowners who are 62 and older.

24
A reverse mortgage loan, like a traditional mortgage, allows homeowners to borrow
money using their home as security for the loan. Also like a traditional mortgage,
when you take out a reverse mortgage loan, the title to your home remains in your
name. However, unlike a traditional mortgage, with a reverse mortgage loan,
borrowers don’t make monthly mortgage payments. The loan is repaid when the
borrower no longer lives in the home. Interest and fees are added to the loan balance
each month and the balance grows. With a reverse mortgage loan, homeowners are
required to pay property taxes and homeowners insurance, use the property as their
principal residence, and keep their house in good condition.

With a reverse mortgage loan, the amount the homeowner owes to the lender goes
up–not down–over time. This is because interest and fees are added to the loan
balance each month. As your loan balance increases, your home equity decreases. A
reverse mortgage loan is not free money. It is a loan where borrowed money + interest
+ fees each month = rising loan balance. The homeowners or their heirs will
eventually have to pay back the loan, usually by selling the home. With most reverse
mortgages, you have a three-day right to cancel a reverse mortgage. Within three
business days after the loan is closed, you can cancel the deal for any reason, without
penalty. This is known as your right of “rescission.” To cancel, you must notify the
lender in writing. Send your letter by certified mail, and ask for a return receipt so that
you have documentation of when you sent and when the lender received your
cancellation notice. Keep copies of any communications between you and your
lender. After you cancel, the lender has 20 days to return any money you’ve paid for
the financing of the reverse mortgage loan. If you believe there is a reason to cancel
the loan after the three-day period, seek legal help to see if you have the right to
cancel.

In India, there are a number of old people whose progeny resided abroad and did not
have need for their parents’ Indian homes. There are also a number of old people
living on pensions. “Reverse mortgage acts as a combination of a housing finance and
insurance product and enables these senior citizens to monetise their holdings," she
said. Reverse mortgage offers several advantages to senior citizens. While the loan,
either a lump-sum or in monthly instalments, is not required to be paid during the
lifetime of the senior citizen or the spouse, the house can be continued to be occupied
by them during their lifetime.

25
 CHAPTER 2

RESEARCH METHODOLOGY

26
2.1 Objectives :-

The primary objectives of a home loan are to assist individuals in financing the
purchase or construction of a residential property. Home loans serve several purposes,
including:

1) Homeownership:

One of the main goals of a home loan is to help individuals achieve homeownership.
Many people may not have the financial means to buy a house outright, and a home
loan provides them with the necessary funds to make this significant investment.

2) Real Estate Investment:

For some individuals, a home is not just a place to live but also a long-term
investment. Home loans allow people to leverage their resources and invest in real
estate, which can potentially appreciate over time, providing financial gains.

3) Tax Benefits:

In many countries, home loans come with tax benefits. Interest payments on home
loans are often tax-deductible, providing an additional incentive for individuals to
take out a mortgage. This can make homeownership more financially appealing.

4) Asset Building:

As individuals make mortgage payments, they gradually build equity in their homes.
Equity is the difference between the property's market value and the outstanding loan
amount. Over time, homeowners can use this equity for other financial needs, such as
education, home improvements, or emergencies.

27
5) Stability and Security:

Home loans contribute significantly to the stability and security of individuals and
families by fostering homeownership. Owning a home provides a sense of
permanence and control over one's living space, mitigating uncertainties associated
with renting. With a home loan, individuals establish a stable foundation for their
future, creating a place to call their own and build long-term equity. The consistent
monthly mortgage payments not only contribute to the gradual repayment of the loan
but also instill financial discipline. Unlike rental agreements that may subject tenants
to fluctuations in rent prices or potential eviction, homeownership through a home
loan offers a sense of security and permanence. Furthermore, the property serves as a
tangible asset, providing a source of stability in the face of economic fluctuations.
Overall, the stability and security associated with a home loan extend beyond the
financial realm, encompassing emotional and psychological aspects, as individuals
establish a lasting connection to their home and community.

6) Wealth Creation:

Over the long term, real estate has the potential to appreciate in value. By taking out
a home loan to purchase a property, individuals have the opportunity to participate in
this wealth creation process.

7) Financial Leverage:

Home loans allow individuals to leverage their financial resources. With a relatively
small down payment, individuals can acquire a more valuable asset, potentially
benefiting from property value appreciation.

8) Facilitating Housing Demand:

Home loans contribute to the overall demand for housing, thereby supporting the real
estate industry and related sectors. This can have positive economic effects by
generating employment and stimulating economic activity.

28
9) Hedging against Inflation:

Real estate is often considered a tangible asset that can act as a hedge against
inflation. As the value of money decreases over time, the value of real estate may
increase, providing a level of protection for homeowners.

10) Meeting diverse housing needs:

Home loans come in various forms, such as fixed-rate mortgages, adjustable-rate

mortgages, and government-backed loans. This diversity allows individuals to choose
a loan product that aligns with their financial goals and circumstances.

It's important for individuals considering a home loan to carefully evaluate their
financial situation, understand the terms and conditions of the loan, and ensure they
can meet their repayment obligations to achieve these objectives successfully.

2.2 Hypothesis :-

Hypothesis:

The accessibility and affordability of home loans positively impact homeownership

rates and contribute to economic stability.

Explanation:

The hypothesis suggests that when home loans are readily available and affordable,
more individuals and families are likely to pursue homeownership. Accessible
financing options reduce the barrier to entry, allowing a broader segment of the
population to participate in the real estate market. As homeownership rates increase,
there is a potential ripple effect on economic stability. Homeownership often

29
correlates with increased community stability, as homeowners tend to have a vested
interest in maintaining and improving their properties.

The hypothesis also implies that affordable home loans can lead to positive economic
outcomes. As individuals and families secure homes through loans, it stimulates
economic activity in related sectors such as construction, real estate, and home
improvement. Additionally, the wealth creation potential associated with
homeownership, including property appreciation and equity accumulation, can
contribute to household financial stability and, by extension, economic stability at a
broader level.

To test this hypothesis, one could examine historical data on home loan interest rates,
homeownership rates, and economic indicators to assess correlations and trends. A
comprehensive study could involve analyzing how changes in home loan accessibility
and affordability impact the overall economic health of a region or country over time.

The hypothesis posits that if ICICI Bank introduces innovative home loan products
and enhances customer-centric services, it is likely to attract more customers in the
competitive home loan market. Innovations such as flexible interest rate structures,
digital application processes, or tailored loan packages that cater to diverse customer
needs may contribute to the bank's appeal. A positive correlation between these
innovations and an increase in ICICI Bank's market share in the home loan sector
could indicate the effectiveness of these strategies in meeting customer demands and
preferences. To test this hypothesis, one could examine historical data on ICICI
Bank's market share in the home loan sector, correlating it with the timing and nature
of introductions of new home loan products and services. Additionally, customer
satisfaction surveys and feedback might provide insights into the impact of these
innovations on the bank's competitiveness in the home loan market.

30
2.3 Scope of the study :-

1) Loan amount :-

The loan amount is a crucial component in the home loan process, representing the
total sum of money that a lender is willing to provide to a borrower for the purchase
or refinancing of a home. This amount is determined based on various factors,
including the borrower's income, credit history, employment stability, and the
property's appraised value. Lenders typically have maximum loan limits, and the loan
amount is also influenced by the borrower's ability to make a down payment. A larger
down payment often results in a lower loan amount. Additionally, the loan amount is
intricately tied to the property's value, and lenders may conduct appraisals to assess its
worth. It is essential for borrowers to carefully consider their financial capacity and
the terms associated with the loan amount to ensure they can comfortably manage the
repayments over the agreed-upon tenure.

2) Interest rates :-

Interest rates play a pivotal role in the home loan landscape, significantly influencing
the cost of borrowing for homebuyers. The interest rate represents the percentage of
the loan amount that the borrower pays the lender as compensation for borrowing
funds. Home loans typically offer either fixed or variable interest rates. A fixed
interest rate remains constant throughout the loan tenure, providing borrowers with
predictable monthly payments. In contrast, variable interest rates can fluctuate based
on market conditions, potentially affecting monthly payments over time. The rate
itself is determined by various factors, including the borrower's credit score, financial
history, and prevailing market conditions. Securing a lower interest rate can result in
substantial long-term savings for the borrower. Therefore, prospective homebuyers
carefully evaluate and compare interest rate options from different lenders to find the
most favorable terms that align with their financial goals and circumstances.
Additionally, understanding the potential impact of interest rate changes over the life
of the loan is crucial for effective financial planning.

31
3) Loan tenure :-

Loan tenure, also known as the loan term, is a critical aspect of a home loan,
representing the duration over which the borrower commits to repay the borrowed
amount. Home loan tenures typically range from 15 to 30 years, although variations
exist based on specific lending institutions and loan products. The choice of loan
tenure is a significant decision for borrowers, as it directly affects monthly repayment
amounts. Opting for a shorter tenure generally leads to higher monthly payments but
results in lower overall interest payments over the life of the loan. On the other hand,
a longer tenure may reduce the monthly burden but typically entails higher cumulative
interest costs. Borrowers need to consider their financial capabilities, long-term goals,
and comfort level with monthly payments when selecting a loan tenure. Additionally,
some lenders may offer flexibility in prepayment or foreclosure options, allowing
borrowers to adjust their repayment schedules based on changing circumstances.
Understanding the implications of the chosen loan tenure is crucial for making
informed decisions and ensuring that the home loan aligns with the borrower's
financial objectives.

4) Repayment structures :-

Repayment structures are fundamental elements of a home loan, outlining the terms
and conditions under which borrowers commit to returning the borrowed funds. One
common repayment structure is the Equated Monthly Installment (EMI), where
borrowers make fixed monthly payments comprising both principal and interest
components. This provides predictability, enabling borrowers to plan their finances
accordingly. Another option is a graduated repayment plan, where payments start
lower and gradually increase over time, typically aligning with the borrower's
expected income growth. Some loans may offer interest-only periods at the beginning,
where borrowers only pay interest before transitioning to full principal and interest
payments later. The choice of repayment structure often depends on the borrower's
financial circumstances, goals, and preferences.

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5) Eligibility criteria :-

Eligibility criteria form the foundation of the home loan application process,
representing the set of conditions that borrowers must meet to qualify for a loan.
These criteria are established by lenders to assess the creditworthiness and financial
stability of potential borrowers. Key factors typically include the borrower's income,
employment history, credit score, debt-to-income ratio, and the property's value.
Lenders use these criteria to evaluate the risk associated with lending money to an
individual and to determine the loan amount and interest rate. A stable and verifiable
income is crucial, as it reflects the borrower's ability to make regular repayments.
Borrowers are encouraged to review these criteria early in the home buying process,
address any potential red flags in their financial profile, and work towards meeting the
lender's requirements to facilitate a smoother loan application and approval process.

6) Down payment :-

The down payment is a significant upfront amount that a homebuyer contributes

towards the total cost of a property, with the remaining balance covered by a home
loan. Typically expressed as a percentage of the property's purchase price, the down
payment serves multiple purposes in the homebuying process. First and foremost, it
reflects the buyer's financial commitment and capacity, acting as a demonstration of
their ability to save and manage homeownership costs responsibly. Additionally, a
larger down payment often leads to a lower loan amount, reducing monthly mortgage
payments and overall interest costs. The standard down payment percentage varies but
commonly falls in the range of 5% to 20% of the home's purchase price. Some
government-backed loan programs may offer options with lower down payment
requirements, making homeownership more accessible for certain buyers.

7) Types of home loans :-

Various types of home loans cater to the diverse needs and financial situations of
borrowers. One common type is the fixed-rate mortgage, where the interest rate
remains constant throughout the loan tenure, providing stability and predictable
monthly payments. Adjustable-rate mortgages (ARMs) are another option, featuring

33
interest rates that can fluctuate based on market conditions, potentially resulting in
varying monthly payments over time. Government-backed loans, such as Federal
Housing Administration (FHA) loans and Veterans Affairs (VA) loans, offer specific
benefits like lower down payment requirements for eligible borrowers. Jumbo loans
are designed for high-value properties that exceed conventional loan limits.
Additionally, interest-only loans allow borrowers to pay only the interest for a
specified period before transitioning to full principal and interest payments.
Understanding the nuances of these various home loan types is crucial for borrowers
to choose a financing option that aligns with their financial goals, risk tolerance, and
specific homeownership needs. Consulting with mortgage professionals can help
individuals navigate the complexities of these different loan products and make
informed decisions based on their unique circumstances.

8) Collateral and security :-

Collateral and security are integral components of the home loan process, establishing
a safeguard for lenders against the risk of borrower default. In the context of home
loans, the property being financed serves as collateral. This means that if the borrower
fails to meet the repayment obligations, the lender has the right to take ownership of
the property through a legal process known as foreclosure. The collateral provides a
level of assurance for lenders, as they have a tangible asset to recover their investment
in case of non-payment. The property's value is crucial in determining the loan
amount and the overall risk associated with the loan. Lenders often conduct appraisals
to assess the fair market value of the property, ensuring that it aligns with the loan
amount requested. The loan-to-value (LTV) ratio, which compares the loan amount to
the property's appraised value, plays a significant role in determining the terms and
conditions of the loan.

9) Insurance requirements :-

Insurance requirements are a critical aspect of the home loan process, designed to
protect both lenders and borrowers in the event of unforeseen circumstances. Lenders
typically require borrowers to secure homeowners insurance, which provides

34
coverage for damages to the property caused by various perils such as fire, theft, or
natural disasters. This insurance protects the lender's financial interest in the property
and ensures that it can be repaired or replaced in case of damage. In addition to
homeowners insurance, lenders may also require private mortgage insurance (PMI) if
the borrower's down payment is below a certain percentage of the home's purchase
price. PMI protects the lender in the event of borrower default and allows individuals
with smaller down payments to qualify for home loans. For government-backed loans
like FHA loans, borrowers are often required to pay mortgage insurance premiums
(MIP) to protect the lender against losses in case of default

10) prepayment and foreclosure terms :-

Prepayment and foreclosure terms are critical aspects of a home loan agreement,
governing the conditions under which a borrower can repay the loan before the
scheduled maturity date. Prepayment allows borrowers to pay off their outstanding
loan amount before the end of the loan tenure, potentially reducing the total interest
paid over the life of the loan. However, lenders may impose prepayment penalties or
charges, and it's essential for borrowers to understand these terms before deciding to
make early repayments. Foreclosure, on the other hand, is a legal process through
which the lender can take possession of the property if the borrower fails to meet the
repayment obligations. Foreclosure is typically a last resort for lenders, and the
specific terms and procedures vary based on the loan agreement and local regulations.
Borrowers should be aware of the circumstances that may lead to foreclosure, such as
prolonged default on payments, and understand the legal implications and potential
impact on their credit.

Clear comprehension of prepayment and foreclosure terms is crucial for borrowers to

make informed decisions regarding their home loan. It allows them to assess the
financial implications of early repayment, navigate potential penalties, and be aware
of the consequences of default to take proactive measures in maintaining their
homeownership status. Consulting with the lender and seeking legal advice can
provide further clarity on these terms and help borrowers plan their financial
strategies accordingly.

35
2.4 Limitation of the study :-

Home loans, also known as mortgages, come with various limitations and factors that
borrowers need to consider. Here are some common limitations associated with home
loans:

1) Credit Score:

Lenders typically require a good credit score for approval. A lower credit score may
result in higher interest rates or even denial of the loan.

2) Debt-to-Income Ratio (DTI):

Lenders assess a borrower's ability to repay the loan by considering their DTI ratio,
which is the percentage of monthly income that goes towards debt payments. A higher
DTI may limit the loan amount or result in a higher interest rate.

3) Loan-to-Value Ratio (LTV):

The LTV ratio represents the loan amount compared to the appraised value of the
property. Lenders may have maximum LTV limits, and borrowers might need to
make a larger down payment if the LTV is high.

4) Down Payment:

Borrowers are typically required to make a down payment, which is a percentage of

the home's purchase price. The size of the down payment can affect the loan amount
and interest rate.

36
5) Income and Employment History:

Stable income and employment history are crucial for loan approval. Frequent job
changes or gaps in employment may impact eligibility.

6) Property Type:

Some lenders may have restrictions on certain property types, such as condominiums
or investment properties.

7) Loan Terms:

The terms of the loan, including the interest rate, loan duration, and repayment
structure, can vary. Fixed-rate and adjustable-rate mortgages have different
limitations and risks.

8) Loan Fees and Closing Costs:

Borrowers need to consider various fees associated with the loan, including
origination fees, closing costs, and other charges. These can impact the overall cost of
the loan.

9) Property Condition:

The property's condition can affect loan eligibility. Lenders may require a home
inspection, and certain issues may need to be addressed before approval.

10) Insurance Requirements:

Lenders often require homeowners to have insurance coverage, such as homeowners

insurance. Failure to maintain adequate insurance could lead to complications.
Typically, financial institutions mandate borrowers to obtain homeowners insurance
to protect the property and its contents against unforeseen events such as fire, theft, or

37
natural disasters. This insurance coverage provides a safeguard for both the borrower
and the lender, ensuring that in the event of damage or loss, the property can be
repaired or replaced.

11) Government Regulations:

Mortgage lending is subject to various regulations, and changes in government

policies or economic conditions can impact the availability and terms of home loans.
It's essential for prospective homebuyers to carefully review and understand these
limitations, work on improving their financial profile, and consult with mortgage
professionals to find the best loan option for their specific situation. Prospective
homebuyers are advised to thoroughly understand these constraints, work towards
improving their financial standing, and seek professional guidance to navigate the
complexities of securing a home loan.

2.5 Significance of the study :-

A home loan, also known as a mortgage, is a significant financial tool that enables
individuals or families to purchase a home by borrowing money from a financial
institution. The significance of home loans lies in several aspects:

1) Homeownership:

For many people, owning a home is a key component of the American Dream and a
significant life goal. Home loans make it possible for individuals to achieve this goal
by providing the necessary funds to purchase a property.

38
2) Affordability:

Homes are often one of the most expensive purchases an individual will make. Home
loans allow people to spread the cost of purchasing a home over an extended period,
making homeownership more affordable.

3) Asset Building:

Real estate has historically been a solid long-term investment. By taking out a home
loan, individuals can start building equity in a property over time. As they make
mortgage payments, they gradually own more of the home, providing a sense of
financial security and potential for future wealth.

4) Tax Benefits:

In some countries, including the United States, homeowners may benefit from tax
deductions on mortgage interest payments. This can provide additional financial
incentives for individuals to take out a home loan.

5) Stimulating the Economy:

The availability of home loans can stimulate economic activity by promoting the
construction industry, creating jobs, and driving demand for related goods and
services. This, in turn, contributes to overall economic growth.

6) Leverage:

Home loans allow individuals to leverage their financial resources. Instead of paying
the full price of a home upfront, borrowers can use a relatively small amount of their
own money as a down payment and finance the rest through a loan.

39
7) Flexibility in Repayment:

Home loans come with various repayment options, such as fixed-rate mortgages or
adjustable-rate mortgages. This flexibility allows borrowers to choose a repayment
plan that aligns with their financial situation and preferences.

8) Hedging Against Inflation:

Real estate has historically been considered a hedge against inflation. As the value of
the property appreciates over time, homeowners may see an increase in their
property's value, providing a potential safeguard against the eroding effects of
inflation.

It's important to note that while home loans offer numerous advantages, they also
come with responsibilities, including the obligation to make regular mortgage
payments and potential risks associated with changes in interest rates and property
values. Individuals considering a home loan should carefully evaluate their financial
situation and consult with financial advisors to make informed decisions.

2.6 Selection of the problem :-

Selecting a home loan is a crucial decision that involves careful consideration of

various factors. Here are some steps and factors to consider when choosing a home
loan:

1) Determine your budget:

Assess your financial situation and determine how much you can afford to borrow.
Consider your income, expenses, and any other financial obligations.

40
2) Interest rates:

Compare interest rates from different lenders. There are two types of interest rates:
fixed and variable. Fixed rates remain the same for a specific period, providing
stability but may be higher initially. Variable rates can change with market conditions.

3) Loan types:

Understand the types of home loans available, such as fixed-rate mortgages,

adjustable-rate mortgages (ARMs), FHA loans, VA loans, etc. Choose the one that
best suits your financial situation and preferences.

4) Loan term:

Decide on the loan term, which is the duration over which you'll repay the loan.
Shorter terms generally have higher monthly payments but lower overall interest
costs, while longer terms may have lower monthly payments but higher overall
interest.

5) Fees and charges:

Be aware of all the fees associated with the loan, including origination fees,
application fees, closing costs, and any other charges. Compare these across different
lenders.

6) Credit score:

Your credit score plays a significant role in determining the interest rate you'll be
offered. A higher credit score usually leads to better loan terms. Check your credit
report and work on improving your score if needed.

41
7) Loan-to-Value (LTV) ratio:

Lenders consider the LTV ratio, which is the loan amount divided by the property's
appraised value. A lower LTV ratio may result in better interest rates.

8) Repayment options:

Understand the repayment options, such as principal and interest, interest-only, or

adjustable-rate mortgages. Choose the one that aligns with your financial goals.

9) Prepayment and foreclosure terms:

Check the terms and conditions related to prepayment penalties and foreclosure. Some
loans charge fees for paying off the loan early or may have restrictions on
prepayment.

10) Customer service:

Consider the reputation and customer service of the lender. Read reviews, ask for
recommendations, and ensure that the lender is responsive and transparent.

11) Loan approval process:

Understand the loan approval process, the required documentation, and the time it
takes to get approved. A smoother and quicker process can be beneficial.

12) Government incentives or subsidies:

Check if there are any government programs, subsidies, or incentives available that
can help reduce the overall cost of the loan.

42
13) Consult a financial advisor:

If needed, consult with a financial advisor or mortgage broker who can provide
personalized advice based on your financial situation.

Taking the time to carefully evaluate these factors will help you make an informed
decision when selecting a home loan that aligns with your financial goals and
preferences. Choosing a home loan involves assessing your budget, comparing
interest rates (fixed vs. variable), selecting the right loan type and term, understanding
fees and charges, considering your credit score, evaluating the loan-to-value ratio,
exploring repayment options, checking prepayment and foreclosure terms, assessing
customer service, understanding the loan approval process, and exploring government
incentives. Consulting with a financial advisor or mortgage broker can provide
personalized guidance. Careful consideration of these factors ensures you select a
home loan that aligns with your financial goals and circumstances.

2.7 Sample size :-

Determining the appropriate sample size for a study on home loans involves various
factors, such as the desired level of confidence, margin of error, and the variability
within the population. The formula for calculating the sample size in a simple random
survey is:

n = Z2 .p. ( 1−p )

E2

where:

• size, n is the sample

• Z is the Z-score corresponding to the desired level of confidence,

43
 • p is the estimated proportion of the population exhibiting the characteristic of
interest,
• E is the margin of error.

To apply this formula to a study on home loans, you would need to consider the
following:

1) Level of Confidence (Z-score):

This is typically set at 95%, corresponding to a Z-score of 1.96. However, you may
choose a different level based on your study requirements.

2) Margin of Error (E):

This is the acceptable range of error around the sample estimate. Common choices
include 5% or 3%, depending on the precision needed.

3) Estimated Proportion (p):

This is the expected proportion of the population with the characteristic of interest. In
the context of home loans, you might need historical data or expert opinions to
estimate this. For example, if you estimate that 40% of the population has a specific
type of home loan, you would use p=0.4.

It's important to note that this formula assumes a simple random sample, and
adjustments may be needed if your sampling method is more complex. Keep in mind
that statistical sampling involves some level of uncertainty, and the calculated sample
size is a theoretical value. In practice, the actual sample size may be adjusted based on
practical considerations, budget constraints, and the specific goals of your study.
Determining an appropriate sample size is a critical aspect of designing a study on
home loans. The sample size is a key factor in achieving reliable and statistically valid

44
results. The formula for calculating the sample size takes into account the desired
level of confidence, margin of error, and estimated proportion within the population.
For instance, if one aims for a 95% confidence level and a 5% margin of error, the
commonly used Z-score of 1.96 is applied. The estimated proportion (p) represents
the anticipated prevalence of a specific characteristic, such as a particular type of
home loan. Precision in estimating this proportion contributes to the overall accuracy
of the study. While the formula provides a theoretical sample size, practical
considerations, including budget constraints and study objectives, may necessitate
adjustments. Ultimately, a well-determined sample size is essential for ensuring the
study's findings accurately reflect trends and characteristics within the broader
population of home loan recipients.

2.8 Data collection :-

Collecting data on home loans typically involves gathering information about various
aspects related to the lending process, borrower qualifications, loan terms, and more.
Here's a general outline of the key data points you might want to collect for home
loans:

1) Borrower Information:

• Full name of the borrower(s)

• Contact information (address, phone number, email)
• Social Security Number or other identification details
• Employment details (employer, job title, income)

2) Property Information:

• Property address
• Type of property (single-family home, condominium, etc.)
• Property value or purchase price

45
 • Details about the property's condition

3) Loan Details:

• Loan amount requested

• Desired loan term (e.g., 30-year fixed-rate)
• Interest rate preference
• Down payment amount

4) Financial Information:

• Monthly income and sources of income

• Monthly expenses (including existing debts)
• Credit score and credit history
• Bank statements and other financial documentation

5) Employment and Income Verification:

• Pay stubs
• Tax returns
• Employment verification letter

6) Credit History:

• Credit reports from credit bureau

• Information on any outstanding loans or debts

7) Property Appraisal:

• Appraisal report to estimate the property's value

46
8) Legal and Ownership Documents:

• Proof of ownership or intent to purchase

• Legal documentation related to the property

9) Loan Approval and Closing Documents:

• Loan approval documents

• Closing disclosure
• Loan agreement and terms

10) Regulatory Compliance:

• Ensure compliance with local, state, and federal regulations governing home
loans

11) Insurance Information:

• Details about homeowner's insurance

It's important to note that the specific requirements for data collection may vary based
on the lender, local regulations, and the type of home loan. Additionally, privacy and
data protection regulations must be adhered to during the collection and storage of
sensitive borrower information. Always consult with legal and compliance experts to
ensure your data collection practices align with relevant laws and regulations.

2.9 Techniques and tools to be used :-

Securing a home loan involves several techniques and tools to ensure a smooth and
successful process. Here are some key elements to consider:

47
1) Credit Score Improvement:

➢ Technique: Maintain a good credit score by paying bills on time, reducing

outstanding debt, and correcting any errors on your credit report.
➢ Tool: Obtain a free copy of your credit report annually and monitor your
score. Use tools like Credit Karma, Experian, or other credit monitoring
services.

2) Financial Planning:

➢ Technique: Create a detailed budget to understand your financial situation and

determine how much you can afford for a home loan.
➢ Tool: Use budgeting apps like Mint or YNAB (You Need a Budget) to track
your income, expenses, and savings.

3) Down Payment Savings:

➢ Technique: Save for a down payment to reduce the loan amount and
potentially secure better terms.
➢ Tool: Set up a dedicated savings account, and consider using tools like Acorns
or capital that round up your everyday purchases to save small amounts
automatically.

4) Loan Pre-Approval:

➢ Technique: Get pre-approved for a mortgage to demonstrate your credibility to

sellers.
➢ Tool: Work with mortgage brokers or use online tools provided by lenders to
get pre-approved.

5) Comparison Shopping:

➢ Technique: Compare loan offers from different lenders to find the best terms
and interest rates.
48
 ➢ Tool: Use online comparison tools or work with mortgage brokers to explore
various loan options.

6) Understanding Loan Types:

➢ Technique: Understand the different types of home loans (fixed-rate,

adjustable-rate, FHA, VA, etc.) to choose the one that suits your needs.
➢ Tool: Utilize online resources, mortgage calculators, and consult with
financial advisors to understand the implications of each loan type.

7) Debt-to-Income Ratio Management:

➢ Technique: Keep your debt-to-income ratio within acceptable limits to

enhance your loan approval chances.
➢ Tool: Use online calculators to assess your debt-to-income ratio and take steps
to reduce high-interest debt.

8) Home Affordability Calculators:

➢ Technique: Use home affordability calculators to estimate how much you can
afford to borrow.
➢ Tool: Many online platforms and mortgage lenders offer affordability
calculators to help you understand your budget.

9) Documentation Organization:

➢ Technique: Prepare and organize all required documentation (income

statements, tax returns, employment verification) to streamline the application
process.
➢ Tool: Use cloud storage or document management apps to keep your financial
documents secure and easily accessible.

49
10) Professional Guidance:

➢ Technique: Seek advice from financial advisors, mortgage brokers, or real

estate professionals.
➢ Tool: Engage with professionals who can provide insights and guidance
throughout the home loan process.

Remember, the home loan process can be complex, and seeking professional advice
can be invaluable. Additionally, stay informed about changes in the real estate and
mortgage markets to make informed decisions.

RESEARCH METHODOLOGY

Research methodology for studying home loans typically involves a structured

approach to gather, analyze, and interpret information related to various aspects of
home loans. Here's a general outline of a research methodology for studying home
loans:

1) Define Research Objectives:

Clearly outline the objectives of your research. Determine what specific aspects of
home loans you want to explore, such as interest rates, eligibility criteria, repayment
options, and customer satisfaction.

2) Literature Review:

Conduct a thorough review of existing literature on home loans. This involves

studying academic papers, reports, and industry publications to understand the current
trends, regulations, and challenges in the home loan market.

50
3) Formulate Hypotheses:

Develop hypotheses based on the information gathered during the literature review.
These hypotheses will guide your research questions and the data collection process.

4) Research Design:

Choose the research design that best fits your objectives. Common research designs
for home loan studies include surveys, interviews, case studies, and statistical analysis
of existing data.

5) Sampling:

Define the target population for your study and select a representative sample. This
could involve choosing specific demographic criteria, such as age, income, or
location, to ensure your sample is reflective of the broader population.

6) Data Collection:

Depending on your research design, collect data using appropriate methods. This may
involve conducting surveys, interviews with borrowers and lenders, analyzing
financial reports, or utilizing secondary data from government agencies and financial
institutions.

7) Data Analysis:

Analyze the collected data using statistical tools and techniques. Common analyses
include assessing interest rate trends, comparing loan terms, and evaluating the impact
of economic factors on the home loan market.

51
8) Interpretation of Results:

Interpret the results of your data analysis in the context of your research objectives.
Determine whether your hypotheses are supported or refuted and draw conclusions
based on the findings.

9)Discussion and Implications:

Discuss the implications of your findings for individuals, financial institutions, and
policymakers. Consider how your research contributes to the understanding of home
loans and its potential impact on the market.

10) Conclusion:

Summarize the key findings, limitations, and contributions of your research. Offer
recommendations for future studies or improvements to existing home loan practices.

11) Report Writing:

Prepare a comprehensive research report documenting your methodology, findings,

and conclusions. Ensure that your report follows a logical structure and includes
relevant visuals, such as charts and graphs, to enhance understanding.

12) Peer Review:

If applicable, submit your research for peer review to validate your methodology and
findings.

52
 CHAPTER 3

LITERATURE REVIEW

53
A Comprehensive Literature Review on Home Loans in India :

1) Introduction:

The concept of home loans has gained significant prominence in the Indian financial
landscape, playing a pivotal role in shaping the country's real estate sector. This
literature review aims to provide a comprehensive understanding of the various facets
of home loans in India, covering historical perspectives, regulatory frameworks,
market trends, and the impact on the economy.

2) Historical Perspectives:

Home loans in India have evolved over the years, with the housing finance sector
witnessing substantial growth since liberalization in the early 1990s. The entry of
private players and the establishment of specialized housing finance institutions have
been instrumental in making housing finance more accessible to a broader segment of
the population. The shift from traditional lending practices to a more structured and
competitive environment has catalyzed the expansion of the home loan market.

3) Regulatory Framework:

The regulatory framework governing home loans in India is primarily governed by the
Reserve Bank of India (RBI) and the National Housing Bank (NHB). The regulatory
environment has undergone significant changes to promote transparency, protect
consumers, and ensure the stability of financial institutions. The introduction of the
Real Estate (Regulation and Development) Act (RERA) in 2016 further enhanced the
regulatory landscape, bringing in a more organized and accountable approach to the
real estate sector.

4) Market Trends:

The home loan market in India has witnessed dynamic trends influenced by various
factors. Interest rates play a crucial role in shaping borrower behavior and market

54
dynamics. The liberalization of interest rates and the availability of floating and fixed-
rate options have provided borrowers with greater flexibility. Additionally, the
emergence of digital platforms and fintech innovations has streamlined the application
process, making it more convenient for borrowers.

5) Government Initiatives:

Government initiatives have played a vital role in promoting affordable housing and
increasing home loan penetration in India. Programs like Pradhan Mantri Awas
Yojana (PMAY) aim to provide financial assistance to eligible beneficiaries, making
homeownership more accessible. Subsidies, tax incentives, and interest rate subsidies
are some of the measures taken by the government to stimulate the housing finance
sector.

6) Challenges and Opportunities:

While the home loan market in India has experienced significant growth, it is not
without challenges. Issues such as non-performing assets (NPAs), market volatility,
and the impact of economic downturns highlight the need for constant vigilance and
adaptive strategies. Opportunities lie in embracing technological advancements,
improving risk management practices, and exploring innovative financial instruments
to cater to diverse borrower needs.

7) Economic Impact:

The home loan sector's impact on the Indian economy is multi-faceted. On one hand,
it stimulates economic activity through the real estate sector, creating employment
and contributing to GDP growth. On the other hand, the interconnectedness with the
financial system necessitates a prudent approach to risk management to ensure overall
economic stability.

55
8) Conclusion:

This literature review provides an in-depth exploration of the home loan landscape in
India, encompassing historical perspectives, regulatory frameworks, market trends,
government initiatives, challenges, opportunities, and economic impacts. As the
housing finance sector continues to evolve, policymakers, financial institutions, and
borrowers must collaborate to foster sustainable growth and ensure the broader socio-
economic development of the nation. As the sector continues to evolve, a
collaborative approach among policymakers, financial institutions, and borrowers is
essential to ensure sustained growth and overall socio-economic development.

REVIEW

Goyal and Joshi (2011) - have deduced in their study on Social and ethical aspects of
Banking Industry that banks can extend themselves as a social and moral oriented
association by just dispensing credits to those social, moral and ecological concern
associations.

Kumar and Gulati (2010) - examined at the centrality of the possession on the
Indian local banks adequacy. Data Envelopment Analysis (DEA), which is a
non-parametric, deterministic and straight programming based system, was
utilized to register open and private division banks effectiveness score. The
operational cross-sectional information of the general population and private area
banks amid the money related years 2005-06 and 2006-07 was utilized and it
was found that (1) De nova private division banks command the development of
effective boondocks of Indian household saving money industry; (2) Primarily,
the entire specialized wastefulness stops from administrative inadequacy rather
than scale wastefulness; and (3) Though the general population and private part
banks' productivity contrasts have been noted, in a large portion of the cases these
distinctions are measurably insignificant. Overall, it is reasoned that industry
possession is incapable in the Indian local saving money industry.

Naveen K.Shetty and Dr.Veerashekharappa (2009) - studied the significance of

microfinance in achieving money related incorporation. The paper concentrates
56
on effect of the expanding hole sought after and supply of money related
administrations in India which has prompted the expanding populace of the nation
to be avoided from the formal budgetary credit framework on housing advance.

Kerry D (2008) - broke down, amid the period 1998-2008, there was a sharp
ascent and afterward there was a surprising drop in the home costs. Financial basics
were the fundamental purposes behind these adjustments in home costs. Thusly the
issue was not a result of subprime loaning, but rather emotional diminishments
in the Fed, a short time later amid the early mid-2000 there was an expansion in
the rates of premium; the development of housing was engaged in the business
sectors where there were critical supply-side limitations, that able to be more value
unpredictable. Likewise the issues laid in light of expansion and decline of certain
home loan items, instead of credit lack.

Sendhilvelan and Karthikeyan (2007) - RBI has expressed that the development
towards general keeping money ought to have speedier dependability and
proficiency of the budgetary framework, yet without anyone else it cannot give a
viable or feasible answer for the operational issues of individual organizations
emerging from credit capitalization, abnormal state of NPAs vast resources
liabilities crisscross, liquidity and so forth. However in a business sector driven
economy to confront the opposition one variable is the size and subsequently, the
passage of Universal banks is unavoidable for the general monetary advancement of
our nation. There is most likely step by step we are moving towards the
administration of a couple of substantial banks from the administration of
numerous little banks. This illustration is accomplished with the idea of
widespread managing an account which surely fortify the banking sector.

Talwar (1996) - in an article on the present saving money situation and the
requirement for an arrangement change, opines that a noteworthy concern tended
to by managing an account segment change is the strengthening of the budgetary
wellbeing of banks. The presentation at prudential standards is better money related
order by guaranteeing that the banks are aware of the danger, benefit of their loan
portfolios.

Boyd (1994) - the study closes on rate of interest charged on advances, enthusiasm on
bank accounts, notoriety. All these interest have played an essential part for

57
customers and money related execution of a bank in business sector. However,
customers likewise mind other criteria, for example, the amount of
agreeableness of representatives, item, online offices, paper work and postliminary.

Spencer (1991) - pointed that the significance of bank picture as focused technique
for expanding customer activity stream. Inclination for bank amongst understudies
as supplier of money related administrations, more noteworthy trust in huge medium
estimated banks, significance of customers by work force, focused store rates and
credit accessibility were the key discoveries.

Narasimham Committee (1991) - In the most recent two decades different

changes came in the keeping money framework in our nation that were engaged
and highlighted by Narasimham Committee. Till now has progress going on. By this
bank came to know their frail focuses and how to came up. There were
numerous angles which decrease in profitability, effectiveness and gainfulness of
a bank framework. The board of trustees firmly makes changing, solid economy
ventures to make Indian banking framework effective.

Rangarajan(1988) - Remarks that division of banks credit for gainful reason in vital
for financial improvement. Banks are more unbending in loaning exercises and
along these lines meriting and poor individuals are not getting budgetary help. New
measures are key to guarantee that advance achieve meriting hands.

Leelamma Kuruvilla (1999) - tosses light on National Housing Policy and new
activities in housing money. She proposed that the adjustment in the lawful casing
work, rearranging the strategy for housing money and the dynamic contributions of
the Government in the housing division will moderate the housing issue.

Mathurn (1993) - opined that the money related weight of interest in housing is
by and large substantial when the proprietor does not have adequate assets
accessible to pay for the site and the whole cost of development. Consequently, he
should make game plans to acquire reserves from some different sources.

Parekh (1988) - reported that the eventual fate of housing fund is to improve the credit
start process for housing all through the nation to build up an institutional system
that would encourage the beginning procedure, to distinguish the potential asset

58
base for the framework in general and to disentangle the lawful framework as for
danger administration of housing money organizations.

Vidhayavathi. K (2002) - in her study evaluated the performance of housing

finance institutions on certain selected business parameters as well as through an
opinion survey over the home loan seekers and concluded that apart from interest rate
advertisement, service quality, courtesy and speed of service are certain other
important dimensions affecting the growth of housing finance industry.

Karthik. G. (1998) - in his study about the Housing and Development

corporation and national housing bank argued that profitability and growth of
housing finance in India is largely based on the development and introduction of
new schemes matching the economic profile of the borrowers. This study
suggested improvement in schemes is highly essential for the growth of housing
finance in India.

Thirumann. R.M. (1981) - attempted to study the role of Co-operative societies in

lending housing finance in Chennai city. The study has covered the Importance of
housing, its components, housing shortage in urban and rural areas the role of
Government, and the role of private and public sector in housing. He also discussed
the problems of housing and housing finance in India.

Usha Patel (1996) - clarified that at present housing through bank fund was a
piece of bank's need division loaning. Furthermore, every nationalized bank is
relied upon to designate each year a predefined rate of stores and plan for its
arrangement for financing immediate and also circuitous housing programs.

Pillai Kalathil, S.R.(1996) - expressed that it will be fitting for all administrations and
open area housing money association to have a focal pool course of action of guiding
with would be borrowers. Legalities must be rearranged.

Naik (1981) - uncovered that housing credits are typically best in class against the
security of home loan of area and the working to be developed with the advance.
Housing fund is along these lines contract account.

59
 CHAPTER 4
DATA ANALYSIS, INTERPRETATION AND PRESENTATION

60
Percentage Analysis

Table 1: Gender

Source: Primary Data

INTERPRETATION:
From the above table, it is found that 60% of respondents
are Males and remaining 40% are females.

Chart 1: Gender

61
Table 2: Occupation

Source: Primary Data

INTERPRETATION:
From the above table, it is found that majority of 37% of
respondents are from private employee.

Chart 2: Occupation

62
Table 3: Income

Source: Primary Data

Source: Primary Data

INTERPRETATION:
From the above table, it is found that 15% of respondents
receive income below 2lakhs ,23% of respondents receive 2-6 lakhs, 37% of
respondents receive income 6-12lakhs and 25% of respondents receive above 12lakhs.

Chart 3: Income

63
Table 4: Type of House

Source: Primary Data

INTERPRETATION:
From the above table, it is found that 81% of respondents
are in individual villa and remaining 19% are in flats.

Chart 4: Type of House

64
Table 5: Category of House

Source: Primary Data

INTERPRETATION:
From the above table, it is found that 70% of respondents
are in own house and remaining 30% are in rental house.

CHART 5: Category of House

65
Table 6: Ownership

Source: Primary Data

INTERPRETATION :
From the above table, it is found that 36% of respondents
owner is their parents,32% of respondents owner is their spouse, 8% of respondents
owner is their relatives and 24% of respondents owner is others.

Chart 6: Ownership

66
Table 7: Primary Bank

Source: Primary Data

Source: Primary Data

INTERPRETATION:
From the above table, it is found that 65% of respondents
primary bank is ICICI Bank,10% of respondents in HDFC Bank ,7% of respondents
in Axis Bank and 18% of respondents in Govt. Sector Banks.

Chart 7: Primary Bank

67
Table 8: Preferred Bank for Home Loan

Source: Primary Data

INTERPRETATION:
From the above table, it is found that 65% of respondents
prefer their primary bank and 35% of respondents prefer other banks.

Chart 8: Preferred Bank for Home Loan

68
Table 9: Status of Home Loan

Source: Primary Data

INTERPRETATION:
From the above table, it is found that 90% of respondents
are new home loan customers and remaining 10% are existing home loan customers.

Chart 9: Status of Home Loan

69
Table 10: Type of Loan

Source: Primary Data

INTERPRETATION:
From the above table, it is found that 35% of respondents have
construction loan, 26% respondents have house loan, 9% respondents have balance
transfer, 11% have land loan and 19% respondents have PMAY loan.

Chart 10: Type of Loan

70
Table 11: Repayment Tenure

Source: Primary Data

INTERPRETATION :
From the above table, it is found that majority of 30%
repayment tenure between 5-10 years, 65% repayment tenure between 10-20 years,
and 5% of respondent tenure between 30 years.

Chart 11: Repayment Tenure

71
Table 12: Extension Loan

Source: Primary Data

INTERPRETATION:
From the above table, it is found that majority of 35%
prefer Repursion and Renovation loan and 65% prefer Additional Extended Loan.

Chart 12: Extension Loan

72
 CHAPTER 5
CONCLUSIONS, SUGGESTIONS AND QUESTIONNAIRE

73
 CONCLUSIONS

• In my study we came to know that many peoples are interested to take a home
loan from ICICI bank to construct their homes.

• Home loans have long period when compare to other personal loans and other
loans. So peoples are interested to take a home loan as it becomes an asset.

• Even though the interest rates are high peoples are willing to take a loan from
ICICI bank due to quick process and sanctioning with expert teams.

• The loan sanction process is much faster when compare to other banks.

• For disbursement process is also it will take less time and less number of
stages when compare to other banks.

• Finally, Home Loan is best income for banks for long time and customers also
get their dreams fulfilled.

74
 SUGGESTIONS

• ICICI Bank having good brand image in the minds of customers.

• Majority of the people got loans from ICICI Bank only.

• Most of the customers are not aware of the products of ICICI home loans.

• Some of the customer’s felt that the interest rates are some what high.

• Some of the customer not having good faith on private banks.

• Most of the people are directly go to bank to apply a home loan.

• Some of the customer of ICICI already benefited through ICICI home loan
products and services.

• Customer awareness is medium about ICICI products.

75
 QUESTIONNAIRE

Dear Sir/Madam, I am Sachin doing BBI from CLG OF SJRS ARTS, COMMERCE
AND SCIENCE, KALVA.I am preparing a project report on HOME LOAN BY
BANKS. I am studying the market potential for home loans. For this I have designed
a questionnaire to know your views. Please fill the given as per your thinking and
experiences. I will be thankful to you for this.

1) NAME :

2) GENDER :

a. MALE
b. FEMALE

3) AGE :

4) CONTACT NUMBER :

5) E-MAIL ID :

6) OCCUPATION :

i. GOVERNMENT EMPLOYEE
ii. PRIVATE EMPLOYEE
iii. SELF EMPLOYED - PROFESSIONAL
iv. SELF EMPLOYED - NON PROFESSIONAL
v. UNEMPLOYED

7)YOUR ANNUAL INCOME

i. BELOW 2 LAKHS
ii. 2-6 LAKHS
iii. 6-12 LAKHS
iv. ABOVE 12 LAKHS

8) WHICH TYPE OF HOUSE YOU LIVEIN?

i. INDIVIDUAL VILLA
ii. FLATS IN APPARTMENT

76
9) DO YOU LIVE IN OWN HOUSE OR RENTAL HOUSE?

i. OWN HOUSE
ii. RENTAL HOUSE

10) WHO OWNS THE HOUSE YOU PRESENTLY LIVE IN?

i. PARENTS
ii. SPOUSE
iii. RELATIVE
iv. OTHERS

11) IN WHICH BANK DO YOU HAVE YOUR PRIMARY ACCOUNT?

i. ICICI BANK
ii. HDFC BANK
iii. AXIS BANK
iv. GOVERNMENT SECTOR BANKS

12) HAVE YOU TAKEN ANY HOME LOAN PREVIOUSLY?

i. YES
ii. NO

13) WHAT TYPE OF HOME LOAN YOU NEED?

i. LOAN FOR CONSTRUCTION OF HOUSE

ii. LOANS FOR PURCHASE OF HOUSE/ FLAT
iii. BALANCE TRANSFER HOME LOAN
iv. NRI HOME LOAN
v. LOAN FOR LAND
vi. PRADHAN MANTRI AWAS YOJNA

14) WHAT WILL PREFFERD TENURE FOR REPAYMENT OF HOME?

i. 2-5 YEARS
ii. 5-10 YEARS
iii. 10-20 YEARS
iv. 30 YEARS

77
15) WHICH TYPE OF EXTENDED HOME LOAN WILL YOU PREFER?

i. REPURSION AND RENOVATION LOAN

ii. HOME IMPROVEMENT LOAN

16) CHOOSE PARAMETERS BASED ON YOUR PREFERENCES OF LOAN?

i. LOAN AMOUNT
ii. INTEREST RATE
iii. PROCESSING CHARGES

17) YOUR SATISFACTORY LEVEL FOR TIME TAKEN TO PROCESS LOAN?

i. Too much Delayed

ii. Delayed
iii. Normal time taken
iv. Faster
v. Much Faster

18) YOUR SATISFACTORY LEVEL ON AMOUNT DISBURSEMENT?

i. Too much Delayed

ii. Delayed
iii. Normal time taken
iv. Faster
v. Much Faster

78
 CHAPTER 6

BIBLIOGRAPHY

79
WEBSITES USED:

www.icicibank.com/PersonalBanking/loans/loans.page

http://en.wikipedia.org/wiki/ICICI_Bank

https://www.business-standard.com/article/pf/40-years-ago-and-now-
home-loan-a-tale-of-three-institutions-114091400747_1.html

https://www.encyclopedia.com/finance/encyclopedias-almanacs-
transcripts-and-maps/home-loan

www.slideshare.net

https://www.encyclopedia.com/finance/encyclopedias-almanacs-
transcripts-and-maps/home-loan

REFERENCES:

1. Re Goyal, K. A. and Joshi, V. “A Study of Social and Ethical Issues in

Banking Industry”. International Journal of Economics & Research, 2011 2(5): 49-
57,2011

2. Kumar, S., & Gulati, R. (2009). Measuring efficiency, effectiveness and

performance of Indian public sector banks. International Journal of Productivity
and Performance Management, 59(1), 51-74.

3. Sundram K.V. "A study on housing finance with particular reference to

co-operative housing in Tiruchirapalli District", 1990,P.22.

80
4. Mishra G.P. "Housing Development and Finance in Maharashtra "An
Evaluation Study of Selected Finance Organization", 1994, P.2S.

5. Tamilarasu. S. "Housing Finance in India: A Case Study of the North

Eastern India" 1995,P.13.

6. Ravider Singh, "Evaluation and impact of slum improvement programme

in Ludhiana (Punjab)" Urban development and environment housing
infrastructure - "Research abstract", April 1999,P.44.

7. Vidhayavathi. K "Role of urban housing financial institution in Karnataka - A

study of selected housing finance corporation in Bangalore city", Finance India,
Delhi, March 2002.

8. Ragupathi. M; "A study on housing finance in Coimbatore region with special

reference to LICHFL, HDFC & Canfin Homes Ltd", 2002, PAO.

81