TABLE 1 - AGE WISE CLASSIFICATION

Below 30
30 – 35 36 – 40 Above 40 Total
Age years
18 36 38 28 120
Percentage 15 % 30 % 32 % 23 % 100%
Source : Primary data
TABLE 2 - MARITAL STATUS

Married Un-Married Total

Marital status
86 34 120
Percentage 72 % 28 % 100%
Source : Primary data
TABLE 3 - GENDER

Male Female Total

Gender
96 24 120
Percentage 80 % 20 % 100%
Source: Primary data
TABLE 4 – MONTHLY INCOME
Below Rs.20000 – 30001 – Above
Monthly Total
Rs.20000 30000 40000 40000
Income
28 53 29 10 120
Percentage 23 % 44 % 24 % 9% 100%
Source: Primary data
TABLE 5 – AMOUNT OF LOAN BORROWED

Below Rs.20 Rs.20 lakhs –

Loan Above 40 lakhs Total
lakhs 40 lakhs
Amount
58 33 29 120
Percentage 48 % 28 % 24 % 100%
Source: Primary data

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 TABLE 6 – PROBLEMS FACED BY THE RESPONDENT
S. Rank Total Mean

Rank
Problems
No I II III IV V score score
1 Not sanctioning expected amount 11 28 35 36 10 5527 46.06 V
2 Asking money for approving the loan 24 20 42 15 19 6146 51.22 II
3 More formalities 35 31 16 13 25 6382 53.18 I
4 High Rate of interest 28 22 26 25 19 6130 51.08 III
5 Not explaining the conditions fully 25 19 14 35 27 5753 47.94 IV
Source: Primary data
TABLE 7 – PURPOSE OF LOAN
Rank Total Mean

Rank
S. No. Purpose
I II III IV Score Score

1. For buying old house 18 34 44 24 5740 47.83 III

2. For altering old one 15 36 23 46 5327 44.39 IV

3. For constructing new house 56 17 22 25 6605 55.04 I

4. For buying a new house 31 33 31 25 6088 50.73 II

Source: Primary data

TABLE 8 – LEVEL OF AWARENESS

Aware Un-aware Total

Level of Awareness
67 53 120
Percentage 56 % 44 % 100%
Source: Primary data
TABLE 9 – OVERALL SATISFACTION

Satisfied Not- satisfied Total

Level of satisfaction
71 49 120
Percentage 59 % 41 % 100%
Source: Primary data
FINDINGS OF THE STUDY:

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  It is noted that, among 120 customers, 32% of them belongs to 36 – 40 years
of age.
 It is discover that, 72% of the respondents were married.
 It is observed that, 80% are male. Majority of the borrowers are male.
 44% of the customers are having Rs.30000 – 40000 of monthly income.
 It is found out that, 48% of the borrowers borrow below Rs.20 lakhs as loan.
 Most of them told, at the time of borrowing they are facing more bank loan
formalities from bank.
 The main purpose of getting loan from banks is “For constructing new house”.
 It could reveal that, 59% of the respondents are having awareness about house
loan facility available in the banks.
 It is point out that, 59% of the respondents overall satisfied with bank’s home
loan.
SUGGESTIONS:
 Most of them told, they are facing more loan formalities. So in future public
sector banks should reduce the formalities.
 RBI should take action against, banks those asking money (corruption) from
customers for sanctioning the loan.
 In the study area, certain percentage of the respondents not aware of various
banking facilities available to them. So banks should take efforts to create
awareness among the public.
 Public sector banks should reduce the interest rate. It will attract more
customers.
 In future banks should sanction loan, what they expect.
 Before providing loan banks should know the capacity of the customers.
 RBI should encourage the commercial banks to provide more home loan to
their customers.
 Bankers should explain the conditions and rules and regulation to the
customers about the loan.
 Bank officials should follow up and check whether the amount properly
utilized.
 Government should provide special subsidies to home loan borrowers.
 RBI should reduce the interest rate of home loans.
CONCLUSION:

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 Finally the researcher concludes that, in the study area public sector banks
rendering good services to the public. They offer more home loans and other loans to
their customers with reasonable interest. Even though banks rendering good services
to the customers, customers told they are facing high rate of interest, officials asking
money for sanctioning the loan, more formalities and not explaining the conditions
and rules fully problems. So in future, banks should take remedies to correct those
problems. It will uplift the banking sector growth as well as the national income of the
nation.
Reference:
Agrawal, P.O., Principles of Banking, Indian Institute of Banking and Finance,
Macmillan Publication, New Delhi, 2006.
Kothari C.R “Research Methodology” methods and Techniques Eastern Ltd.
Indian Institute of Banking & Finance (IIBF), Home Loan Counselling (‘Know Your
Banking’ Series), Taxmann Publications Pvt.Ltd, New Delhi, 2007.
Murugan, M. S. and Jansirani, J. (2017), “Customer perception towards Home Loan”,
International Journal of Trend in Research and Development, 12-14.
Websites:
www.rbi.org
www.bankofindia.com
www.statebankofindia.com
www.businesstoday.com
paisabazaar.com

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INTRODUCTION:

The economic contribution of banking sector is growing rapidly in India. They

play a vital role in the financial market. In the past banking Companies main objective
is earning profit, but now their main objective is rendering good services and earning
profit. In India, banking companies offer variety of loan facility to their customers
with affordable interest rate.
The shelter is the main important one for every human being in the world. Not
only human, we can see around us every animals and birds too need and build their
own shelter. The good shelter brings us happiest family life in the world. In India
majority of the people spend their major income in their house construction. That is
their main ambition and dream in their life. Especially in south India, if a male going
to search women for getting marriage, the parents of the women first they ask do you
have own house and good job. It is indicates the importance of the shelter.
Constructing of a house is not an easy one, it will need huge money. That’s why they
are going to get loan from bank and construct their dream house.

In India both private and public sector banks offer home loans to the public
with reasonable interest rate. Government of India also takes necessary steps to
providing housing facility to every poor family in India through Pradhan Mantri Awas
Yojana (PMAY) scheme. The customers apply home loan from bank for the purpose
of for buying old house, for altering old one, for constructing new house and for
buying a new house. And also they are facing the following problems from banks like
not sanctioning expected amount, asking money for approving the loan, more
formalities, High Rate of interest and not explaining the loan conditions and rules
fully etc,.
STATEMENT OF THE PROBLEM:

All we know the basic needs of the human being is food, shelter and cloth.
They get Food and cloth easily but shelter is quite difficult one. Majority of them
spend their major part of earnings to build or buy a house. In the modern business
world banks offer variety of home loan to their customers. With this in mind the
present topic Customers perception towards bank home loan in Alangulam Taluk
were selected for research.

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SIGNIFICANCE OF THE STUDY:
 Creating good relationship among customers and banks.
 Creating awareness among the respondents about home loan facility.
 Promoting banking loan facility schemes.
 Discovering the problem and give suggestions to overcome the problem.
SCOPE OF THE STUDY:

The present study aims at analyzing the Customers perception towards home
bank loan in Alangulam Taluk. The scope of the study has been limited to 4 public
sector banks customers only namely SBI, IOB, canara bank and Indian bank, other
banks customers were not included in the present study and home loan facility only
consider in the study.
OBJECTIVES OF THE STUDY:
1. To study the socio and economic background of the respondents
2. To know the purpose of borrow home loan.
3. To find out the level of awareness of the respondents towards home loan.
3. To identify problem faced by the respondents while taking home loan.
4. To measure the level of satisfaction of the respondents.
5. To offer suitable suggestions.
RESEARCH METHODOLOGY
The researcher selects 120 public sector banks customers as respondents for
this research. The researcher used both primary and secondary data for the present
study. The convenient sampling method was used. Researcher used Simple percentage
and Garrett ranking techniques for data analyzing.
SAMPLING PROCEDURE:
The convenient sampling method is adopted for the present study.
Sampling Distribution of the Respondents
S. No PUBLIC SECTOR BANKS Sample Respondents
1. SBI 30
2. IOB 30
3. Canara bank 30
4. Indian bank 30
Total 120

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LIMITATION OF THE STUDY:

 In the present study Home loan only considered by the researcher other loan
facilities are not considered.
 The researcher chooses the respondents from 4 public sector banks customers
only.
 The researcher selected only 120 samples due to time constrain.

CHAPTER SCHEME:
Chapter I – Introduction and Research design.
Chapter II – An overview of home loan & Area profile.
Chapter III – Analysis and interpretation of data.
Chapter IV – Findings suggestions and conclusion.

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POLICY INITIATIVES TO DEVELOP HOUSING SECTOR IN INDIA:

Housing sector is regarded as a critical sector in terms of policy initiatives.

The initiatives are reflected in five year plans and the union budgets.
 National housing and habitat policy(NHPP) was formulated in 1998 and
stressed on:
 Removing legal, financial and administrative barriers for facilitating access to
loans, finance and technology.
 Ensuring that housing sector along with supporting services was to be treated
at par with infrastructure sector.
 Creation of surpluses in housing stock. Providing cost effective shelters to the
poor and vulnerable groups.
 The National urban housing and habitat policy, 2007, while focusing on urban
shelters, emphasized on promotion of larger flow of funds to meet revenue
requirements of urban housing and infrastructure.
 The policy seeks to promote various types of public-private partnership for
realizing goal o f affordable housing for all"
 The Golden jubilee rural housing finance scheme (GJRHFS) was launched in
1997- 1998 to provide shelter to people in rural areas.
 To improve habitat conditions in rural areas construction of 60 lakh houses
was undertaken under Bharat Nirman scheme. A new scheme Rajiv Awas
Yojna (RAY) has been announced to make the country slum free in 5 years
(2010-2015) period.
 The allocation in budget estimates has been increased under Indira Awas
Yojna (JAY)
 Fiscal concessions by way of tax concessions are being offered under section
80c of IT act (rebate upto 1 lakh in respect of principal). Section 24(2)
(interest deduction upto a limit of Rs 1.5 lakhs in respect of properties
acquired or constructed and self occupied.
 No specific permission is required for transfer of property.
 NHB and HUDCO have been allowed to issue tax free bonds.
 To strengthen the recovery mechanism, securitization and reconstruction of
financial assets and enforcement of security interest act, 2002 (SARFESI Act)
was enacted and housing finance institutions in eligible list of institutions.

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  FDI was allowed upto 100% under automatic route in townships, housing built
up infrastructure projects.

BANKING IN INDIA:
Originated in the first decade of 18"^ century. The oldest bank in existence in
India is the State Bank of India, which originated from the "The Bank of Bengal" in
Calcutta in June 1806. The three presidency banks merged in 1925 to form the
Imperial Bank of India, which, after India's independence, became the State Bank of
India. For many years the Presidency banks acted as quasi-central banks, as did their
successors. The Reserve Bank of India formally took on the responsibility of
regulating the Indian banking sector from 1935. After India's independence in 1947,
the Reserve
Bank was nationalized and given broader powers. By the 1960s, the Indian banking
industry became an important tool to facilitate the development of the Indian
economy. The Government of India nationalized 14 largest commercial banks with
effect from the midnight of July 19, 1969. A second dose of nationalization of six
more commercial banks followed in 1980. The reason stated for the nationalization
was to give the government more control of credit delivery. With the second dose of
nationalization, the GOI controlled around 91% of the banking business of India.

After 1990s, the policy of liberalisation geared up the banking sector in India,
which has seen rapid growth with strong contribution from all the three sectors of
banks, viz. government banks, private banks and foreign banks. All this led to the
retail boom in India. People demanded not just more from their banks but also
received more.

At present, banking in India is generally fairly mature in terms of supply,

product range and reach, although reaching in rural India still remains a challenge for
the private sector banks. The Reserve Bank of India is an autonomous body, with
minimum pressure from the government. With the growth in the Indian economy
expected to be strong for quite some time-especially in its service sector- the demand
for banking services, especially retail banking, mortgages and investment services is
expected to be strong.

9
HOUSING FINANCE:
Housing Finance plays a vital role as an engine of equitable economic growth
through the reduction of poverty and prevents slum proliferation in economy. The
demand for housing has increased rapidly day by day. Therefore, to meet with the
growing housing demand is the aim of the government. To achieve this aim it is
required to provide the finance for housing to the people. The liberalization of the
financial sector of the economy has also become possible by the housing finance.

Home Loan is the funds buyer has to borrow usually from a bank or other
financial institutions to purchase a property, generally secured, by a registered
mortgage to the bank over the property being purchased. A mortgage loan is a debt
owed on a home, the mortgage rate is the interest rate charged to the home owner for
the use of the loan. Housing finance or Home loan is a broad topic, the concept of
which may vary across continents, regions and countries, particularly in terms of the
areas it covers. "The purpose of a housing finance system is to provide the fiends
which homebuyers need to purchase their homes. This is a simple objective, and the
number of ways in which it can be achieved is limited. Notwithstanding this basic
simplicity, in a number of countries, largely as a result of government action, very
complicated housing finance systems have been developed. However, the essential
feature of any system, that is, the ability to channel the funds of investors to those
purchasing their homes, must remain. "

HOUSING FINANCE INSTITUTIONS:

Scheduled commercial Banks (SCB's)

These are the banks which have floated their housing finance arms to avail the
national housing Banks refinance facility and tax concessions available to HFC's. All
public, private and foreign sector banks have access to the low cost retail deposits.
They have almost 50% towards Housing loans in their retail loan portfolio.

Scheduled cooperative banks:

These include the State Cooperative Banks, scheduled district cooperative

banks and scheduled urban cooperative banks. These banks are connected with urban,
semi urban and rural areas.

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Regional rural banks:

They were set up especially to develop the rural economy and housing portfolio is
refinanced by the NHB.

Housing Finance companies (HFCs):

A housing finance company is a company which mainly carries on business of

housing finance or has its main object clause in memorandum of association of
carrying on the business of providing finance for housing. A HFC is required to have
a certificate of registration from the NHB. There are about 43 HFC registered under
section 29a of NHB act, 1987. Only about 20 accept public deposits. Eg. PNB
housing finance limited, HDFC, ICICI home finance company limited and LIC
housing finance limited.

The national cooperative housing federation of India (NCHF):

It is an apex organization for coordinating, guiding and promoting cooperative

housing activities in the country.

HOME LOANS:

Virtually every young family in India aspires to own a home. A Home loan is
a great way to part finance the dream home that you always wanted to own. Here are
the top 6 factors to keep in mind before applying for a home loan:

1. Get your own credit report:

Apply online at http://www.cibil.com/accesscredit.htm and follow the

instruction given there to get a copy of your own credit report. Check your credit
report thoroughly to spot errors. If need be, use our advisory services on CIBIL
Report to get any errors corrected. Remember any errors in your credit report can
reduce your chances of getting a good home loan offer.

2. Finalise property first before you finalise your home loan lender:

Lenders reserve their best rates for immediate disbursement customers and
hence customers who have finalised property get the best possible home loan offers.
Also if they have any issues with your property it will get highlighted before you

11
incur too much effort and costs. Some lenders may not be comfortable with you
buying a plot and self constructing on it. Some lenders will not fund under
construction property unless the developer is pre-approved with them. A lot of lenders
can have issues if the property you are buying is more than 15-20 years old.

3. Be prepared for the processing fee:

Most companies charge a non refundable processing fee which will not be
refunded even if you decide not to use the loan sanction. The lenders incur costs for
sanctioning your loan and hence in most cases this is non refundable. If anybody is
promising you that the processing fee cheque will not be put in without your prior
approval or that the processing fee will be refunded if you do not accept the sanction
the chances are that he is lying.

4. Fixed rates are rarely fixed:

Understand the interest rates chargeable to you. The fixed costs quoted are
normally fixed only for a period of 12 to 60 months and can be revised thereafter.
There are also the money market clauses in certain agreements.

5. Make a provision for higher down payment:

Lenders carry out an independent valuation of the property being bought and
they will fund around 80-85% of the valuation amount as determined by their valuers.
These independent valuers normally are conservative and value the property
(especially property bought on resale) much lower than what you might actually be
paying for it. While you can ask for a second valuation (at your cost off course) you
should be prepared to shell out the difference between the actual price being paid by
you and the valuation made by the bank over and above the 15-20% down payment
required from you.

6. Insuring the Home loan:

Make sure to review your insurance requirement when you take on a home loan. If
you are underinsured make sure you buy a term policy (it is anyway cheaper than a so
called loan cover policy) for the entire amount of loan so that the family can pay off
the loan in the event of the borrowers death during the loan tenure. Also consider

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buying a critical illness rider that will pay off the loan in the event of the borrower
suffering from critical illnesses such as Kidney failure, paralytic stroke, cancer, etc.

Do not sign blank application forms or documents and keep a copy of all documents
submitted to the lender for your future reference. Any promise made by the DSA or
even an official of the lender has no value unless it is in writing or at least on email.

So if you are basing your decision on any such promise make sure you get it in record
in some form.

Since the new class of buyers are relatively younger set of customers who are
more aware about legal documentation and approvals, buyers are now more 'end-
users' rather than investors; the property markets in India undergoes transformation to
align itself with global standards with an increased emphasis on quality & cost control
and documentation methods. In the current economy of India, the real estate sector
has the maximum propensity to generate income and demand for materials, equipment
and services. lt can be said that housing finance companies were formed for co-
existing with buyer's requirements of housing loans for investing in properties. Home
loans are made available by financial institutions to both Indian and NRI customers at
floating and fixed rate of interest and also at attractive EMI options. So called loan
cover policy) for the entire amount of loan so that the family can pay off the loan in
the event of the borrowers death during the loan tenure. Also consider buying a
critical illness rider that will pay off the loan in the event of the borrower suffering
from critical illnesses such as Kidney failure, paralytic stroke, cancer, etc.

TYPES OF HOUSING LOANS:

Home equity loans- For construction a form of finance to customer by way of

mortgage of existing property. The current market value of the property is the basis of
providing the loan.

 Home improvement loans: For home repairs and renovations

 Home extension loans: The purpose is to extend the home by way of
additional rooms
 Land purchase loans: For purchase of plots
 Home purchase loans: for purchasing readymade property.

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 Besides home loan, commercial property loans are also available and different
financial institutions in India provide commercial loans at different rates and different
upper limits.

Real estate loans are available to builders, promoters and real estate developers.
The experience and financial standing of the builders is taken into account before the
loan is granted which is to be returned with the minimum installments. Today, the
amount of money that a city dweller spends on rent is roughly the same, or only
slightly less than the amount he pays as an EMI on a housing loan. Earlier the home
loan sector in India was solely dependent on nationalized and public sector banks, but
the entry of public sector banks into the housing finance business marked the
beginning of the first round of interest rate cuts. And this reduction in interest rates
has enhanced the borrowing power of customers. Moreover, HFCs are offering
incentives to attract investors like Some companies sanction the housing loan without
requiring you to identify property as a pre-requisite for eligibility.

Free accident insurance & property insurance

Waiving of pre-payment penalty

Waiving of processing fee: There are a few documents which the finance
companies require for setting up criteria for eligibility of Home loans.

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