Chapter-1

Chapter -1

Need for the study:

Retail banking has been popular segment to enter into for many banks. In the retail
banking, housing sector has been most promising segment which is promising a
Comprehensive growth rate of about 30 per cent for the next five years. With the
government keen on infrastructure development and announcing various tax Sops housing
loan segment has been a tempted area for many banks to enter into housing sector can be
bifurcated into organized and unorganized segments with the unorganized segments
accounting for over 75 per cent of the housing units constructed.

During the past 4 – 5 years the housing sector helped by the growing housing finance
industry has witnessed significant developments.

Scope of study
 The study covers a period of five years from 2013 to 2018. There are several
reasons for selecting this period.
 During the past 5 years the Bank has gone global as a result the company has
witnessed many economic and political changes.
 Company has undergone rapid changes in the past 5 years due to many policy
decisions relating to capital markets, banking sector & licensing policy.
 The study is limited to only Bajaj This study is mainly related to the individuals who
are interested in taking home loans from banks to fulfill their dreams.
 The study is mainly related to all the loans provided Bajaj Housing.

OBJECTIVE OF THE STUDY OF HOME LOANS

 The study was mainly conducted to understand the concept of home loan scheme
and the eligibility criteria of the customers.
  The study is done to understand the documents involved in the home loan scheme
and the repayment methodology adopted by various banks and the HFC‘s (Housing
Finance Corporations).
 The innovative home loan schemes and the risk capturing mechanism adopted by
the HFIs and the future of the home loan segment has been undertaken as a part of
this study

Limitations of study:

 The study was restricted in understanding the home loan as concept so the practical
implications of the study have been difficult.
 The innovative features of the various HFIs as part of their home loan schemes but
is not a comprehensive study of their home loan schemes.
 The Take Over home loans of high interest rate for low interest rates and their
inherent risks on the banks lending profile has not been undertaken in the study.
 The mortgage home loans and its scope on the home loan lending portfolio were not
studied as this would lead into a relatively new kind of home loan segment.
Chapter-2
INTRODUCTION

Mortgage loan

A mortgage loan, or simply mortgage, is used either by purchasers of real property to

raise funds to buy real estate, or alternatively by existing property owners to raise funds
for any purpose, while putting a lien on the property being mortgaged. The loan is
"secured" on the borrower's property through a process known as mortgage origination.
This means that a legal mechanism is put into place which allows the lender to take
possession and sell the secured property ("foreclosure" or "repossession") to pay off the
loan in the event the borrower defaults on the loan or otherwise fails to abide by its terms.
The word mortgage is derived from a "Law French" term used by English lawyers in the
Middle Ages meaning "death pledge", and refers to the pledge ending (dying) when either
the obligation is fulfilled or the property is taken through foreclosure.[1] Mortgage can also
be described as "a borrower giving consideration in the form of a collateral for a benefit
(loan)."

Mortgage borrowers can be individuals mortgaging their home or they can be businesses
mortgaging commercial property (for example, their own business premises, residential
property let to tenants or an investment portfolio). The lender will typically be a financial
institution, such as a bank, credit union or building society, depending on the country
concerned, and the loan arrangements can be made either directly or indirectly through
intermediaries. Features of mortgage loans such as the size of the loan, maturity of the loan,
interest rate, method of paying off the loan, and other characteristics can vary considerably.
The lender's rights over the secured property take priority over the borrower's other
creditors which means that if the borrower becomes bankrupt or insolvent, the other
creditors will only be repaid the debts owed to them from a sale of the secured property if
the mortgage lender is repaid in full first.

In many jurisdictions, it is normal for home purchases to be funded by a mortgage loan.

Few individuals have enough savings or liquid funds to enable them to purchase property
outright. In countries where the demand for home ownership is highest, strong domestic
markets for mortgages have developed. Mortgages can either be funded through the
banking sector (that is, through short-term deposits), or through the capital markets
through a process called "securitization", which converts pools of mortgages into fungible
bonds that can be sold to investors in small denominations.

Basic concepts and legal regulation

According to Anglo-American property law, a mortgage occurs when an owner (usually of a

fee simple interest in realty) pledges his or her interest (right to the property) as security
or collateral for a loan. Therefore, a mortgage is an encumbrance (limitation) on the right
to the property just as an easement would be, but because most mortgages occur as a
condition for new loan money, the word mortgage has become the generic term for a loan
secured by such real property. As with other types of loans, mortgages have an interest rate
and are scheduled to amortize over a set period of time, typically 30 years. All types of real
property can be, and usually are, secured with a mortgage and bear an interest rate that is
supposed to reflect the lender's risk.

Mortgage lending is the primary mechanism used in many countries to finance private
ownership of residential and commercial property (see commercial mortgages). Although
the terminology and precise forms will differ from country to country, the basic
components tend to be similar:

 Property: the physical residence being financed. The exact form of ownership will
vary from country to country, and may restrict the types of lending that are possible.
 Mortgage: the security interest of the lender in the property, which may entail
restrictions on the use or disposal of the property. Restrictions may include
requirements to purchase home insurance and mortgage insurance, or pay off
outstanding debt before selling the property.
 Borrower: the person borrowing who either has or is creating an ownership interest
in the property.
  Lender: any lender, but usually a bank or other financial institution. (In some
countries, particularly the United States, Lenders may also be investors who own an
interest in the mortgage through a mortgage-backed security. In such a situation,
the initial lender is known as the mortgage originator, which then packages and sells
the loan to investors. The payments from the borrower are thereafter collected by a
loan servicer.
 Principal: the original size of the loan, which may or may not include certain other
costs; as any principal is repaid, the principal will go down in size.
 Interest: a financial charge for use of the lender's money.
 Foreclosure or repossession: the possibility that the lender has to foreclose,
repossess or seize the property under certain circumstances is essential to a
mortgage loan; without this aspect, the loan is arguably no different from any other
type of loan.
 Completion: legal completion of the mortgage deed, and hence the start of the
mortgage.
 Redemption: final repayment of the amount outstanding, which may be a "natural
redemption" at the end of the scheduled term or a lump sum redemption, typically
when the borrower decides to sell the property. A closed mortgage account is said to
be "redeemed".

Many other specific characteristics are common to many markets, but the above are the
essential features. Governments usually regulate many aspects of mortgage lending, either
directly (through legal requirements, for example) or indirectly (through regulation of the
participants or the financial markets, such as the banking industry), and often through state
intervention (direct lending by the government, by state-owned banks, or sponsorship of
various entities). Other aspects that define a specific mortgage market may be regional,
historical, or driven by specific characteristics of the legal or financial system.

Mortgage loans are generally structured as long-term loans, the periodic payments for
which are similar to an annuity and calculated according to the time value of money
formulae. The most basic arrangement would require a fixed monthly payment over a
period of ten to thirty years, depending on local conditions. Over this period the principal
component of the loan (the original loan) would be slowly paid down through
amortization. In practice, many variants are possible and common worldwide and within
each country.

Lenders provide funds against property to earn interest income, and generally borrow
these funds themselves (for example, by taking deposits or issuing bonds). The price at
which the lenders borrow money therefore affects the cost of borrowing. Lenders may also,
in many countries, sell the mortgage loan to other parties who are interested in receiving
the stream of cash payments from the borrower, often in the form of a security (by means
of a securitization).

Mortgage lending will also take into account the (perceived) riskiness of the mortgage loan,
that is, the likelihood that the funds will be repaid (usually considered a function of the
creditworthiness of the borrower); that if they are not repaid, the lender will be able to
foreclose on the real estate assets; and the financial, interest rate risk and time delays that
may be involved in certain circumstances.

Mortgage underwriting

Once the mortgage application enters into the final steps, the loan application is moved to a
Mortgage Underwriter. The Underwriter verifies the financial information that the
applicant has provided to the lender. Verification will be made for the applicant’s credit
history and the value of the home being purchased. An appraisal may be ordered. The
financial and employment information of the applicant will also be verified. The
underwriting may take a few days to a few weeks. Sometimes the underwriting process
takes so long that the provided financial statements need to be resubmitted so they are
current. It is advisable to maintain the same employment and not to use or open new credit
during the underwriting process. Any changes made in the applicant’s credit, employment,
or financial information can result in the loan being denied.
Mortgage loan types

There are many types of mortgages used worldwide, but several factors broadly define the
characteristics of the mortgage. All of these may be subject to local regulation and legal
requirements.

 Interest: Interest may be fixed for the life of the loan or variable, and change at
certain pre-defined periods; the interest rate can also, of course, be higher or lower.
 Term: Mortgage loans generally have a maximum term, that is, the number of years
after which an amortizing loan will be repaid. Some mortgage loans may have no
amortization, or require full repayment of any remaining balance at a certain date,
or even negative amortization.
 Payment amount and frequency: The amount paid per period and the frequency of
payments; in some cases, the amount paid per period may change or the borrower
may have the option to increase or decrease the amount paid.
 Prepayment: Some types of mortgages may limit or restrict prepayment of all or a
portion of the loan, or require payment of a penalty to the lender for prepayment.

The two basic types of amortized loans are the fixed rate mortgage (FRM) and adjustable-
rate mortgage (ARM) (also known as a floating rate or variable rate mortgage). In some
countries, such as the United States, fixed rate mortgages are the norm, but floating rate
mortgages are relatively common. Combinations of fixed and floating rate mortgages are
also common, whereby a mortgage loan will have a fixed rate for some period, for example
the first five years, and vary after the end of that period.

 In a fixed rate mortgage, the interest rate, remains fixed for the life (or term) of the
loan. In case of an annuity repayment scheme, the periodic payment remains the
same amount throughout the loan. In case of linear payback, the periodic payment
will gradually decrease.
 In an adjustable rate mortgage, the interest rate is generally fixed for a period of
time, after which it will periodically (for example, annually or monthly) adjust up or
down to some market index. Adjustable rates transfer part of the interest rate risk
 from the lender to the borrower, and thus are widely used where fixed rate funding
is difficult to obtain or prohibitively expensive. Since the risk is transferred to the
borrower, the initial interest rate may be, for example, 0.5% to 2% lower than the
average 30-year fixed rate; the size of the price differential will be related to debt
market conditions, including the yield curve.

The charge to the borrower depends upon the credit risk in addition to the interest rate
risk. The mortgage origination and underwriting process involves checking credit scores,
debt-to-income, down payments, and assets. Jumbo mortgages and subprime lending are
not supported by government guarantees and face higher interest rates. Other innovations
described below can affect the rates as well.

Loan to value and down payments

Upon making a mortgage loan for the purchase of a property, lenders usually require that
the borrower make a down payment; that is, contribute a portion of the cost of the
property. This down payment may be expressed as a portion of the value of the property
(see below for a definition of this term). The loan to value ratio (or LTV) is the size of the
loan against the value of the property. Therefore, a mortgage loan in which the purchaser
has made a down payment of 20% has a loan to value ratio of 80%. For loans made against
properties that the borrower already owns, the loan to value ratio will be imputed against
the estimated value of the property.

The loan to value ratio is considered an important indicator of the riskiness of a mortgage
loan: the higher the LTV, the higher the risk that the value of the property (in case of
foreclosure) will be insufficient to cover the remaining principal of the loan.

Value: appraised, estimated, and actual

Since the value of the property is an important factor in understanding the risk of the loan,
determining the value is a key factor in mortgage lending. The value may be determined in
various ways, but the most common are:
 1. Actual or transaction value: this is usually taken to be the purchase price of the
property. If the property is not being purchased at the time of borrowing, this
information may not be available.
2. Appraised or surveyed value: in most jurisdictions, some form of appraisal of the
value by a licensed professional is common. There is often a requirement for the
lender to obtain an official appraisal.
3. Estimated value: lenders or other parties may use their own internal estimates,
particularly in jurisdictions where no official appraisal procedure exists, but also in
some other circumstances.

Payment and debt ratios

In most countries, a number of more or less standard measures of creditworthiness may be

used. Common measures include payment to income (mortgage payments as a percentage
of gross or net income); debt to income (all debt payments, including mortgage payments,
as a percentage of income); and various net worth measures. In many countries, credit
scores are used in lieu of or to supplement these measures. There will also be requirements
for documentation of the creditworthiness, such as income tax returns, pay stubs, etc. the
specifics will vary from location to location.

Some lenders may also require a potential borrower have one or more months of "reserve
assets" available. In other words, the borrower may be required to show the availability of
enough assets to pay for the housing costs (including mortgage, taxes, etc.) for a period of
time in the event of the job loss or other loss of income.

Many countries have lower requirements for certain borrowers, or "no-doc" / "low-doc"
lending standards that may be acceptable under certain circumstances.

Standard or conforming mortgages

Many countries have a notion of standard or conforming mortgages that define a perceived
acceptable level of risk, which may be formal or informal, and may be reinforced by laws,
government intervention, or market practice. For example, a standard mortgage may be
considered to be one with no more than 70–80% LTV and no more than one-third of gross
income going to mortgage debt.

A standard or conforming mortgage is a key concept as it often defines whether or not the
mortgage can be easily sold or securitized, or, if non-standard, may affect the price at which
it may be sold. In the United States, a conforming mortgage is one which meets the
established rules and procedures of the two major government-sponsored entities in the
housing finance market (including some legal requirements). In contrast, lenders who
decide to make nonconforming loans are exercising a higher risk tolerance and do so
knowing that they face more challenge in reselling the loan. Many countries have similar
concepts or agencies that define what are "standard" mortgages. Regulated lenders (such
as banks) may be subject to limits or higher risk weightings for non-standard mortgages.
For example, banks and mortgage brokerages in Canada face restrictions on lending more
than 80% of the property value; beyond this level, mortgage insurance is generally
required.

Foreign currency mortgage

In some countries with currencies that tend to depreciate, foreign currency mortgages are
common, enabling lenders to lend in a stable foreign currency, whilst the borrower takes
on the currency risk that the currency will depreciate and they will therefore need to
convert higher amounts of the domestic currency to repay the loan.
Chapter-3
Bajaj Finance

Bajaj Finance Limited, a subsidiary of Bajaj Finserv, is an Indian Non-Banking Financial

Company (NBFC). The company deals in Consumer Finance, SME (Small and Medium-sized
Enterprises) and Commercial Lending, and Wealth Management. They are a consumer
focused company with emphasis on profitable growth and operational efficiency to deliver
best results to all its stakeholders.

The company is a 29-year-old most diversified non-bank in India with a demonstrated

track record of profitability. Apart from being the largest financier of consumer durables in
India they are also one of the most profitable firms in this category.

Headquartered in Pune, Maharashtra, the company has 294 consumer branches and 497
rural locations with over 33,000+ distribution points. The company reported a pre-tax
profit of Rs.626 crores and a post-tax profit of Rs.408 crores at a ROA of 0.8% and ROE of
5.1% in Q2 FY17.

Corporate background
Originally incorporated as Bajaj Auto Finance Limited on March 25, 1987, the non-bank
singularly focused on providing two and three wheeler finance. After 11 years in the auto
finance market, Bajaj Auto Finance Ltd launched its initial public issue of equity share and
was listed on the BSE and NSE.

At the turn of the 20th century, the company ventured into the durables finance sector,
making a relatively smooth transition to the unexplored space. In the subsequent years,
Bajaj Auto Finance diversified into business and property loans as well.[3]

In the year 2006, the company’s assets under management hit the Rs.1,000 crore mark and
is currently at Rs.52,332 crore. 2010 saw the company’s registered name change from Bajaj
Auto Finance Limited to Bajaj Finance Limited,[4] owing to its growing portfolio of products.
Home Loan - Features and Benefits

Bajaj Finserv Home Loan fulfils all your mortgage financing requirements, from buying
your first home to constructing a new house, purchasing a plot/ land, renovating your
home or getting a balance transfer for your existing home loan. We cater to all salaried,
self-employed and professional individuals.
You can get a home loan up to Rs. 10 Crore, from Bajaj Finserv at attractive
interest rates with 3-EMI holiday and convenient doorstep services. You also get
flexible repayment options and quick disbursals. Our newest offering of Flexi
Hybrid Home Loan enables you to enjoy up to 4 years* of principal holiday
period. You can manage your finances better as you pay only interest as EMIs,
and enjoy flexible repayment options.
To enjoy more convenient options to suit your financial needs, apply for home loan online
to gain instant approval. Here's a look at different features and benefits of home loan:

 Flexi Hybrid Home Loan

Pay just interest as EMI for the initial tenor, and pay principal and interest on amount

utilized. Flexi Hybrid Home Loan helps you manage your finances better, and enjoy up to

4 years of principal holiday, so the chances of default are minimum

 Easy Balance Transfer Facility

Refinance your existing home loan with Bajaj Finserv, with minimal documentation and
faster processing. Transfer your existing home loan, and get a top-up loan at a nominal
interest rate.
  Top-up Loan

Finance your other requirements with a high-value top-up loan over and above your
existing housing loan. Get a top-up loan without any extra documentation, at a nominal rate
of interest.

 Property Dossier

A customised report to guide you through all the legal and financial aspects of being a
property owner.

 Part-prepayment and Foreclosure Facility

No charges on part-prepayment or foreclosure of your home loan, to make the loan

affordable

 Flexible Tenor

Flexible tenors ranging up to 25 years, to fit your repayment capacity

 Minimal Documentation
Easy Home Loan eligibility criteria and minimal documentation, to help you get your loan
faster

 Online Account Management

Online management of your Home Loan using our digital customer portal, for your
convenience

 3 EMI Holiday

Get relief from paying EMIs for 3 months, with amount adjusted against your loan tenor.
This gives salaried individuals a grace period to plan finances, without having to
compromise on your lifestyle.
  Flexi Hybrid Home Loan

Pay just interest as EMI for the initial tenor, and pay principal and interest on amount
utilized. Flexi Hybrid Home Loan helps you manage your finances better, and enjoy up to 4
years of principal holiday, so the chances of default are minimum

 Easy Balance Transfer Facility

Refinance your existing home loan with Bajaj Finserv, with minimal documentation and
faster processing. Transfer your existing home loan, and get a top-up loan at a nominal
interest rate.

 Top-up Loan

Finance your other requirements with a high-value top-up loan over and above your
existing housing loan. Get a top-up loan without any extra documentation, at a nominal rate
of interest.

 Property Dossier

A customised report to guide you through all the legal and financial aspects of being a
property owner.

 Part-prepayment and Foreclosure Facility

No charges on part-prepayment or foreclosure of your home loan, to make the loan

affordable

 Flexible Tenor

Flexible tenors ranging up to 25 years, to fit your repayment capacity

 Minimal Documentation

Easy Home Loan eligibility criteria and minimal documentation, to help you get your loan
faster
  Online Account Management

Online management of your Home Loan using our digital customer portal, for your
convenience

 3 EMI Holiday

Get relief from paying EMIs for 3 months, with amount adjusted against your loan tenor.

This gives salaried individuals a grace period to plan finances, without having to
compromise

on your lifestyle. This benefit is applicable only for salaried individuals

 Customised Insurance Schemes

Customised insurance schemes to protect your family from the burden of repaying the
housing loan in case of unforeseen events.

With attractive Home Loan interest rates and a host of benefits to suit your Finances, Bajaj
Finserv Home Loans are designed to help you get your dream home without hassle. Get the
benefits of an easy balance transfer, a high-value top-up loan, and a 3 EMI holiday.

About Flexi Hybrid Home Loan

In a first of its kind facility, Bajaj Finserv presents Flexi Hybrid Loan. In this loan, you pay
just interest as EMI for the initial tenor, and for balance tenor you pay the principal and
interest only on the amount utilized.

 Flexibility: Enjoy the flexibility of both – flexi-interest and flexi-term loan, in the
same loan. You can withdraw from any part payments made*
 Interest Only EMIs: Pay only interest during the initial flexi-interest loan tenor
  Loan Limit: No reduction of loan limit during the interest only period
 Repay Anytime: No restriction on repayment of principal amount.
 No Additional Charges: Part pay, withdraw and even foreclose the loan amount
without any additional charges

 Nominal Annual Fees: Pay nominal maintenance fees at the end of every year, to
reap benefits of hybrid flexi loan.

Benefits

 Enjoy up to 4 years of principal holiday period

 Interest-only EMIs help you manage your finances better
 Part-pay and withdraw instantly, through our customer portal
 No limit and nil charges on the number of part-prepayments or withdrawals
 Minimal chances of loan default

Eligibility Criteria

 The loan applicant should be below 50 years of age.

 Hybrid Flexi Loans cannot be given for under-construction property.

About Home Loan Balance Transfer

Home Loan Balance Transfer helps you reduce your EMIs by moving your outstanding loan
from other financial institutes to Bajaj Finserv for lower interest rate. You can get
additional top-up loans, and enjoy features such as Flexi Hybrid Home Loan, 3 EMI holiday,
pre-payment facility, and nil foreclosure charges.
Our newest offering – Flexi Hybrid Home Loan, enables you to manage your finances better
with an interest-only period of up to 4 years*. With no limit on number of pre-payments or
withdrawals, you can avail benefits of both – flexi-interest and flexi-term loan with Bajaj
Finserv Home Loan Balance Transfer facilities.

You can use Home Loan Balance Transfer Calculator to compute your savings, and your
top-up loan eligibility. Bajaj Finserv’s Balance Transfer is amongst the best in the industry
for the following reasons:

 3 EMI Holiday feature

 Pre-payment facility
 Flexi Hybrid Home Loan
 No hidden charges
 Nil foreclosure charges
 Online account management
 Customised insurance solutions

Features and Benefits

 Top-up Loans

Buying a home comes with many unforeseen expenses that you can’t always plan for.
That’s where Bajaj Finserv Top-up Loans come in. Get the advantage of a top-up on your
existing home loan with Bajaj Finserv at low interest rates and a hassle-free application
process. In addition, our top-up loan come without the need for you to submit collateral, as
they are just an add-on to your existing home loan.
Bajaj Finserv Top-up loans are a unique benefit offered to our home loan balance transfer
customers. If you have transferred your home loan balance to us, you will be eligible to
apply for a top-up loan after one year.

 Part prepayment facility

You can prepay any amount. However, the prepayment transaction should not be less than
the total amount of 3 EMIs. There is no limit on the maximum amount. This is subject to
you clearing your first EMI.

 Nil foreclosure charges

You get the option to foreclose your Home Loan anytime during your loan tenure. Use our
Home Loan foreclosure calculator for this purpose. Bajaj Finserv will not charge any
foreclosure charges.

 3 EMI Holiday

Bajaj Finserv focuses on the ease of repayment through multiple flexible options that make
it easier for the customer to repay their loans. A 3-month EMI grace period will help
manage/plan monthly expenses and give a cushion to the customer to plan his finances.

Eligibility & Documents

Our Home Loan Balance Transfer facility is available only for properties that are ready to
occupy, or already occupied. In order to avail this facility. You should have completed
payment of more than 12 loan EMIs without any dues /bounces. In addition, your
outstanding loan amount must be greater than Rs. 5 lakh. Once you’re eligible for a home
loan balance transfer, You will need the following documents:

 Financials

Form 16/ Latest salary slips

 Bank Statements

Bank statements of salary account for last 6 months

Identity Proof
 Voter's ID card, Driving license, Job card issued by NREGA/Aadhar card/PAN card
(PAN card only as identity proof)

 Address Proof

Passport/Voter's ID card/Driving license/Aadhar Card

Fees and Charges

Types of Fees Charges Applicable

Processing fees Upto 1%

Loan statement charges NIL

Interest and principal statement charges NIL

PDC swap charges NIL

Penal interest 2% per month

EMI bounce charges* Up to Rs 2,500 per bounce

*Applicable following 1st EMI clearance

How to apply for Home Loan Balance Transfer

With Bajaj Finserv’s Home Loan Balance Transfer, you not just make your home loan
affordable, but also leverage benefits like top-up loans to help you in your time of need.
Apply for a Home Loan Balance Transfer, by calling us on 1800-103-3535, or you can reach
us by clicking on Apply Online
To apply for a Home Loan Balance Transfer, follow the steps below:

 1 Step 1 : Fill in your personal details

 Enter your personal details, including your name, date of birth, address, and contact
details

 2 Step 2: Fill in your financial details

Input your income details, so we can find the best deal that suits your financial
standing.

 3 Step 3: Fill in your employment details

The next set of details you need to submit pertain to your employment status.

 4 Step 4: Fill in your existing property details

Submit the details of the existing property for which you need balance transfer loan.

 5 Step 5 : View your loan offer

Using our state-of-the-art eligibility calculator, you’ll be able to know what kind of
offers we have in store for you.

 6 Step 6 : Submit your property details

Share details of your new home, including its location and size, so we can help you
get the best deal

 7 Step 7: Pay the secure fee online

This fee is needed to secure and reserve the offer calculated for you. Our
Relationship Manager will get in touch with you, to help you with the loan process
and documents once you have paid the fees. You can pay the fee online, through our
secure payment portal without any hassle.
Once you’ve availed a Home Loan from Bajaj Finserv, you can get all the information
 about your housing loan like payment schedule, interest certificate, repayment track
and key information related to your loans.

 8 Step 8 : Upload your documents

Upload copies of all your documents, including ID, address, signature proof,
photographs, employment and income details on our website.

TOP UP LOAN

Eligibility Criteria

To help home buyer’s set-up their dream home, Bajaj Finserv has come up with a unique
offer - Top-up Loan. Under this scheme, Bajaj Finserv lends you an additional amount to
transform your house to the home of your dreams.

Features and Benefits

A Top Up loan is an exclusive option for our Home Loan Balance Transfer customers that
give them the freedom to borrow money over and above the initial Home Loan amount.
You can avail of these loans when you opt for a Home Loan Balance Transfer from Bajaj
Finserv. Applying for and maintaining multiple loans can be quite a hassle. If you’ve bought
land, you’ll most certainly need to get a Home Construction Loan to fund your construction
activities. A Top-Up Loan on your existing loan will hasten the process and save you lots of
time and energy. Using a Top Up loan for home improvement gets you tax exemption on the
loan amount. These loans can be used for a variety of other purposes also, like marriage
expenses, or even education. You can make use of this facility a year after your loan gets
disbursed. When you opt for a Home Loan Balance Transfer at Bajaj Finserv, you can easily
get a Top Up Home Loan at a very low rate of interest.
Low interest rates

You can avail a Top Up loan on Home Loan at an interest rate much lower than most other
loans.

o Easy Financing

Getting a Home Loan Top Up loan is hassle-free and requires very little paperwork. You can
repay the loan through easy EMIs. Plus, there are no prepayment charges. This loan is
available for salaried individuals only. This offer is up for all our existing and new
customers who have/will avail our Home Loan Balance Transfer facility. The Top-up Loan
can be more than the original Home Loan if the value of your property is high.

Eligibility Criteria

Our Top-Up Loans are available to all customers who opt for a Home Loan Balance
Transfer. We have a set of very basic eligibility criteria and minimal documentation
requirements. Here is the complete list of requirements for Top-Up Loan eligibility.

Fees and Charges

There are no prepayment or foreclosure charges if you decide to prepay your EMIs or
foreclose your loan before the tenure gets over. This way you can clear off your debts
quickly and easily if you have the financial capacity to do so. For information on processing
fees, the rate of interest and other charges, please visit the link provided to help you get a
better understanding of Top Up Loan charges and interest rates

How To Apply

Online

Fill up the online application form and review your loan offer with the help of our Home
Loan Top-up calculator.
Offline

Give us a call on 1-800-209-4151 or visit any of our branches.

Property Dossier

Eligibility Criteria

Bajaj Finserv, India's most diversified NBFC, now offers housing loans at a low interest rate
of 8.50% on online Home Loan and Balance Transfer from other banks for all salaried
customers.

Features and Benefits

What is Property Dossier?

Property Dossier is another industry first value added service offered to Mortgage
customers of Bajaj Finserv.

Buying a property is a big investment decision which requires huge finances. There are
various aspects of property which are critical to evaluate prior to buying a property but
however, are generally missed by the buyers to check. This may result in wrong decision of
buying a fraudulent property or huge financial losses to the customer.

Property Dossier is a customized report that guides the customer through all the legal and
technical aspects of owning a property in a simple and crisp manner. It also covers general
property knowledge tips as well as all macro factors like property index of the city,
important property tips etc.

o Legal Report:

It details out the title flow of the property and opinion on its overall legal aspects
 o Valuation Report:

It contains the fair market value of the property along with robust opinion on regulatory
approvals

 Property credit history:

It gives access to the mortgage information of the property to prevent fraudulent

transactions on the property. It has detailed information on the chain of property owners
and summaries of all loans on the property. It consists of 2 important reports

 Market Dynamics reports:

It provides bird’s eye view of the real estate market of the city with specific focus on
infrastructure, price indexes, demand-supply trends and investment opportunities.

 Loan Documents:

This section contains List of Documents submitted to BFL and amortization chart

Customer proposition

Key value proposition to customer are as follows:

In India, legal complexities of a property are highest. With property dossier, customer is
assured of the Property Title and Legality with clear reports rather than blindly relying on
checks done by financier Valuation report in Property Dossier acts as a proof of current
market valuation of the property
Property Credit history ( CIBIL, CERSAI report) enables customer to be assured of no
fraudulent or misrepresentation of property related transactions in the past
Comprehensive property analysis covering property city trends, infrastructure and
connectivity, real estate market trends and investment opportunities.
Exhaustive Good to know section which provides knowledge on process of share certificate
transfer, Mutation, electricity bill ownership transfer, property tax and home loan
registration Important property tips on what to do in case of loss of property documents
and execution of property will in India
Property buyer always has anxiety pertaining to the property s/he is going to purchase. In
India most of property related records are still not available online, making it extremely
difficult for a buyer to check previous transactional and legal records of the property s/he
is going to buy. To top it up, Legal records are very complex in nature and makes it very
difficult for a common man to understand them. From technical side many approvals are
required to be procured prior to construction of the property from various government
authorities. Whether the developer has complied with all the norms and taken requisite
approvals is not feasible for an individual buyer to verify. These are important compliances
required to be checked before buying a property.
“To summarize, Property Dossier is as a One Stop information package to customers and
can act as a complete guide on his pre and post property transaction”

To apply, write to us at [email protected] or call us on our toll free number 1800 209
4151

How To Apply

For Self Employed Individuals:

To Apply Online :

Step 1:

Click here to apply

Step 2:
Fill in the mandatory details, & click Submit
Step 3:
Our representative will get in touch with you with your preapproved offer.

To Apply through SMS

Step 1:
SMS ‘HLCI’ to 9773633633

Step 2:
Our representative will get in touch with you along with your preapproved offer.

For Salaried Individuals: -

 You can apply for a Bajaj Finserv Home Loan online as well as offline.
 To apply for a Home Loan offline, call us on 1800-103-3535 or SMS ‘SHOL’ to 9773633633
 To apply online, click here , and follow these steps:-

Step 1:
Fill in your personal, financial, and employment details.

Step 2:
Use our Home Loan eligibility calculator to know your Home Loan offer.

Step 3:
Submit your property details.

Step 4:
Pay the secure fee online to reserve the offer calculated for you. Our Relationship Manager
will get in touch with you to help you with the loan process and documents once you have
paid the fees. You can pay the fee online through our secure payment portal.
Step 5:
Upload copies of all the required documents in order for your application to be verified.
Getting a Home Loan from Bajaj Finserv is quick and hassle-free. Click here to begin your
application.

ELIGIBILITY CRITERIA FOR HOME LOANS

How much can you borrow?
Griha Home Loans range from Rs.1lakh to Rs. 50lakhs. Your repayment period can vary
from 1 year to 20 years depending upon your capacity to repay.

Eligibility:
Age: - Min: You should be at least 21 years of age.

Max: At the time of loan maturity, you should not exceed 65 years or your
retirement age, whichever is earlier.

Individuals:
You should have completed a minimum of 2 years of service (with a minimum of 1 year in
the current job)

Businesspersons/Self-employed professionals:
You must have an established business or professional practice of not less than 3 years,
with a positive net worth and must have posted a net profit for the last 2 years.

Note: Minimum net take home salary of Rs. 6000/- p.m. for salaried employees or annual
income of not less than Rs. 1.20lakh for businesspersons/ self-employed professionals.
(Spouse/co-applicant’s income can be included in the income computation).
1. Individuals who are salaried or self employed, professionals, businessmen are eligible.
Proprietary concerns, HUF, partnership firms or limited companies are not eligible for this
loan, where partners at their individual capacity are free to avail this loan.
2. As a customer to enhance the loan eligibility, all HFIs lay down conditions to who be co
applicants, al co owners to the property should necessarily be co-applicant. Income of the
co owners can be clubbed together to get higher loan eligibility. Minors are not eligible to
become co owners, as also friend and relative’s only blood relatives are eligible to take a
property jointly.
Some of the acceptable relationships where loan clubbing is possible:

3. The minimum age for the applicant and the co applicant to become eligible for the
commencement of the loan is 23 years, and co applicant can be of 18 years of age if their
income is not clubbed to calculate the loan eligibility.
4. The maximum age at the time of loan maturity for applicant or co-applicant is 60 years or
the retirement age whichever is earlier.

DOCUMENTS INVOLVED IN EVALUATION OF HOME LOAN:

The documentation requirement for various categories of applicants depends on their
status. For this purpose all HFIs segregate their employees in different categories.

They are:
Salaried
Professional or Businessman

The criteria of evaluation changes according to their status. The general documents, which
remain same for all the categories, are as follows:

1. Proof of age
Any one of the following is considered for proof of age, they are:
Passport
Voter’s ID card
PAN card
Ration card
Employer’s identity card
School leaving Certificate
Birth Certificate

2. Copy of bank statements for the last six months:

Bank statement for the last six months of all operating and salary accounts. Bank
statements for the last six months of all current accounts, if self employed. Any other
photocopies of investments held, if required by the HFIs
3. Copy of latest credit card statement.
4. Passport size photograph
5. Signature verification by your bankers.
6. Proof of residence:

Ration Card
PAN Card
Passport
Rent agreement if any, if you are currently staying on rent.
Allotment letter from your company if you are residing in company Quarters.

The documents required to be provided by the salaried class are as follows:

Salary slips for the last one month.
Appointment letter
Salary certificate
Retainer ship agreement, if appointed as consultant.
From-16 issued by the employer in your name.

Proof of Employment:
The proof of employment is verified by the
Identity card issued by the employer
Visiting card.
Employer’s details (in case of private limited companies):
The employer’s details are to be provided in addition to the above documents for
documents for a private sector employee, they are:
Name of promoters / Directors
Background of promoters / Directors
Number of employees
List of branches / factories
List of clients / Customers
Turnover of your employer
Annual reports of your employer for the last two to three years.

The documents required to be submitted by the businessmen as follows:

a. Last three years Profit & Loss Account Statement duly attested by a Charted Accountant
b. Last three years Balance Sheets duly attested by a Chartered Accountant
c. Last three years Income Tax Returns duly filed and certified by Income Tax authorities

Proof of Investments:
1. Bank statements for the last six months of all current accounts.
2. Any other photocopies of investments held, as required by the HFI.
The above are the various documents required by the businessman in addition to the
documents, which are common to the entire category.
The businessman is also judged on the basis of the business conducted by him, if his
Business profile is in the negative list, he will be thoroughly considered for his credibility
before dispersing loan, the organization and property location should not be in the negative
list.
These are the additional documents which are required to be looked at before going on for
completing the pre sanction formalities with respect to dispersing of the home loans to the
business class.

THE PARAMETERS INVOLVED IN HOUSING LOAN EVALUATION

There are a number of parameters on which the housing loans are built:
They are:
1. TENURE
The tenure of the home loan refers to the time limit for a customer to repay the loan
Generally, the maximum tenure of home loans is 20 years, with a few lenders offering
tenure of 20 years or more (ICICI has recently launched a 30 years loan). The longer the
tenure, more a customer pays in total interest, but monthly payments will be less.
So depending on the earning potential and bank balance of the customer, an appropriate
can be chose. An important requirement of most banks/ HFIs is that they pay up the entire
loan before you retire. The customer can always prepay the entire loan amount before it is
due.
As long as the tenure goes up a customer pays more interest which is up to 0.25 – 0.5%,
generally above the home loan rates.

2. AMOUNT PAID BY THE FINANCER/ MARGIN REQUIREMENTS

The financer does not pay the entire amount of the loan, they request the customer to
maintain margin, most banks go in for a 85% funding of the property value including the
stamp duty and charges, it however varies among various banks.
This is also treated as the margin money or own contribution required to be put by the
prospective loan seeker as the contribution towards the purchase of the house. Most HFIs
believe the amount paid is upfront before they release any disbursement.
As a rule of thumb, depending upon the HFC, the prospective loan seeker has to cough up
15% - 20% of the loan amount as a down payment. For smaller amounts, this may not be
much. But for figures running into lacks, this could make loads of difference.

For example: An apartment costing Rs. 10lacss may get 85 per cent financing. So, customer
has to arrange for the remaining Rs 1.5lacs.
Some banks however make way for the payment for 90% of financing and about 100%
financing for some new projects, however they are subjected to a large number of factors
and constrains.

3. INTEREST RATES
Without doubt the most important parameter to factor into home loan calculations. The
interest rates may vary from institutions to institutions and generally range from about
7.25% - 7.75% to around 9% Repayment is in the form of EMIs (Equated Monthly
installments). The longer the tenure, the more you pay in interest, but your monthly
payment will be less.

The two kinds of interest rates available to a customer are:

Fixed interest rates
Floating interest rates
Fixed interest rates remain fixed over the tenure of the loan.
Floating interest rates are affected by the rates in the market, they fluctuate according to
the rates issued or changed by the RBI from time to time.
The finance minister’s diktat on home loans does not hold for private banks. India’s largest
home loan provider and second largest bank — ICICI Bank —on Tuesday
hiked its home loan by 1%. The bank has also increased its deposit rates.
As per the new rate structure, customer will have to pay 10.5% on the home loans with a
floating rate, while the fixed home loan will now invite an interest of 12.5%. With this
increase, the monthly installment on an Rs.1lakh loan for 20 years goes up by Rs70.
Some public sector banks do so only once in 12 months while some private sector lenders
do it as frequently as a quarter. Though the current interest rate quote maybe lower, over
the life of the loan, a customer will be able saved more in the case of a lender who resets
your floating rate more frequently.
The investors are also given the option of changing their option from fixed rate loan to a
floating rate loan, of course by paying a penalty.
4. MISCELLANEOUS CHARGES:
All banks charge certain amount of processing fee which cannot be ignored, it should be
understood that along with monthly payments, the customer should also ensure that he has
to pay these charges, so he should careful in choosing his HFC.
Miscellaneous charges generally range around 2.5% to 3%. A 1% administration fee and
0.8% processing fee on, say RS. 5, 00,000 loan,
would amount to RS 10.000. Other times, it could be just one fee (either
administration or processing) but could yet work out to be much more if it is
considerably higher at, say, 2.5 per cent or 3 per cent. The various other fees, which you are
required to be paid along with the margin amount, are:

a) Processing fee:
It’s a fee payable to the lender on applying for a loan. It is either a fixed amount not linked
to the loan or may also be a percentage of the loan amount. The loan amount received by
customer can be less than the processing fee. It is charged at the submission of the
application form and covers expenses incurred for processing the application form.
b) Prepayment Penalties:
When a loan is paid back before the end of the agreed duration a penalty is
charged by some banks/companies, which is usually between 1% and 2% of the amount
being pre paid.
c) Administrative Fees:
An administrative fee is charged by the HFI on the loan amount sanctioned to customer.
This fee is normally payable at a time of accepting the offer letter. It is charged mainly to
meet the operating expenses of the loan amount of the entire tenure.
d) Others:
It is quite possible that some lenders may levy a documentation or consultant charge. In
case of ICICI Bank the processing fee is 0.25% of the loan amount and the administrative
fee is approximately 0.50% of the loan amount.
5. AMORTISATION
It means the method or the calculation by was of which the entire Principal
amount/loan amount is paid through the tenure of the loan.
This helps the customer to know what his outstanding principal is at any point of time.
There are two methods generally followed:
Annual rests
Monthly rests
Annual rests:

This is more commonly known as annual reducing balance of the principal/loan amount
lent to you. In an annual rest the EMIs (fixed monthly payment for the dispersal of the loan
amount) are calculated on a annual basis.
The component of interest is higher in the initial years and later on the component of
principal increases and the interest keeps reducing year after years. In other words, the
interests in the EMI will keep reducing year after year and the principal component keeps
increasing.

Monthly rests:
This is called monthly reducing balance or principal. The calculation in the
above method remains the same as of the above except that the balance is calculated on a
monthly basis and the EMI is broken up every month to arrive at the opening balance of the
principal for the next month. It is always better for a customer to seek an HFI, which
generally has monthly rests, based system; this will reduce the amount of interest paid by
the customer. Many banks have adopted to the monthly rests system.

6. REPAYMENT FACILITY
The bank has given three options for repayment of the loan to suit the
convenience of Borrower. Equated Monthly Installments (EMI) uniform monthly
installment, inclusive of interest, for the entire repayment of only interest for the first five
years, and thereafter in EMI for the next 10 years.
Repayment of only interest in the first five years, 30% principal plus interest in the next
five years, and balance 70% plus interest in the remaining period.
Repayment to start on completion of construction, but not later than 18 months from first
disbursement and in case built up houses after one month from disbursement. Interest
during gestation shall be paid as & when due. The repayment not to extend beyond the age
of retirement of the borrower or 70 years whichever is earlier, however where co-
borrower is taken, a maximum repayment period of 20 years may be considered provided
the loan is liquidated within the age of 70 years of the borrower/
co-borrower having capacity to service the loan.

THE LOAN PROCEDURE FOLLOWED AT BAJAJ HOME LOAN

The procedures involve in the disbursement of home loan by any bank entails the following
steps:
Home loan application form is first submitted by the customer covering all details.
Checklist of requirements is requested for from the customer, and all documents are
required to be submitted (copies), they are then verified whether the details are failed in
correctly and whether all the documents are submitted.
Additional loans, if any are applicable. Many banks provide for supplementary loan as a
part of their comprehensive home loan scheme.

RISK CAPTURING MECHANISM

One of the important aspects in the home loan financing is to ensure that the loan seeker is
worthy and credible. BAJAJ follows the credit score model to male home loan
disbursements.
Credit score model is a risk capturing mechanism, which is used to assess the risk
perspective of the loan seekers.
The prospective loan seeker is assessed on a number of parameters which helps in the
evaluation of his profile and each parameter is assigned a score based on which the
decision is taken.
A score of 100 is fixed, and a score of 75 is considered to be good, score of 55 is considered
above average and score of 25 to be average. The prospective loan seeker on a scale of 100
is expected to get 55 avail the home loan.
The parameters on which risk is assessed are:

1. DEMOGRAPHIC PROFILE
The demographic profile includes a number of sub-parameters they are basically:
Age
Educational Qualifications
Number of Dependents
Marital status
The demographic profile of the loan seeker is allotted a maximum score of 15.

2. RELATIONSHIP WITH BAJAJ HOME LOAN

The relationship with the bank is also considered for the benefit of its customers.
The sub-parameters considered here are:
Value of relationship (in terms of deposits)
Number of years
The relationship with the bank is given a weight of 10 on the total score of 100.
3. INCOME MODEL
The income module of the bank includes parameters such as:
Gross Eligible Monthly Income
IRR ( Income to Installment Ratio)
FOIR (Fixed obligations to income ratio)
Net take home
The income model is given the highest score of 50 points.
4. STABILITY AND CONTINUITY
The stability and continuity factors are based on
Organization Profile : Govt. / public sector companies / public limited or private limited
companies or partnership or others
Length of service in Present job / organization.
This module is provided with maximum score of about 15 points.
5. ASSET MODULE
The asset module include factors like
Margin
Net-Worth ( Total assets – Total Liabilities)
The asset module is given a weight of 10 on a scale of 100.
The various parameters of the credit score model and their respective weights are
depicted in the following chart.

The abbreviations of the above term are:

DM – Demographic profile
RM BAJAJ – Relationship with the BAJAJ
IM – Income Module
SC – Stability and Continuity

SCRUTINY OF THE DOCUMENTS

The retail processing is a procedure, which involves careful scrutiny of accounts.
BAJAJ Home Loan uses a specialized system to go through the accounts, before dispersing
the loan to the customer. The basic groups set up in the process of loan application are:

RETAIL MANAGER ENTERER GROUP:

This group does the data entry. Upon completion of the data entry the group forwards the
same to the RM Verifier group to verify and resends it to the former in case of tiny
discrepancies for editing.
The Loan officer enterer group and the RM Verifier group should ensure, confirm and
verify the following:
The organization is in the appropriate list.
The organization is not in the negative list
The property location is not in the negative list.

Applicant Details:

Name and the personal details

Identity details Address
Employment details – salaried
Financial details: Income asset ownership, Existing bank account details and credit card
details
Employment details: Business
Financial details: Existing bank accounts and credit card details.

Existing Loan details:

The name of the financial institution (in case of take over) type of loan, purpose of loan
amount etc, as per the home loan application form.

Loan request:
Including the disbursement details.

Acquisition details:
Gee details, loan amount recommended, name of the customer preferred branch.

Reference details:
Entry of at least one reference is mandatory.

Property details:
The RM enterer group and the RM Verifier group shall affix their initials on the home loan
process note.

Upon completion of the above activities, the field investigation, legal opinion and the
technical appraisal process shall be initiated by the RM.

The basic scrutiny checks followed by the bank:

Field investigation study.
Technical Feasibility
Legal Feasibility

Field Investigation Study:

The manager RM shall go through the documents and inform the same to the field
investigation agency the details:
a) Field Investigation Report:
Residence and Reference (Tele – Check)
Name, Address, Office or Business telephone number of the applicant and
Co-applicant.
Income Tax return.
The reports are to given on the letterhead of the respective approved agency by their
authorized employee with agency’s rubber stamp. The RM should ensure from the field
investigation agency in case of Residence and reference (Tele-check)

The details in the report should match with the information given in the home loan
application form.

IT-Return:
It should be tallied as per the office records.
The manager RM shall make a tele-check to cross verify the investigation made by the
agency in case, for the salaried applicants where the disbursement is greater than 10 lacks
and in case of the businessman where the disbursement is greater than 10 lacks.
2. LEGAL FEASIBILITY
The bank should arrange for the legal opinion.
The manager RM should forward it to the bank’s empanelled lawyer various documents for
scrutiny.
Some of the documents required for the scrutiny by the lawyer are:
Sale agreement duly registered
Own contribution receipts
Allotment letter
Land documents indicating ownership, if applicable registration receipt
Possession letter
Lease agreement, if applicable (Property bought from a development authority)
No objection certificate from the developer, society or development authority.
In case of the construction of the house the agreement of construction of the house
between the land owner and the contractor.

The above are the list of documents to be referred to by a lawyer. The manger has to
provide the copies of the documents should be provided by duly specifying the name of the
applicant, particulars of property and list of documents attached.

All correspondence with regard to the legal opinion must be carried forward between the
lawyer and the RM only.

3. FINANCIAL SCRUTINY

Prior to disbursement, the HFI also conducts a site visit to the customer’s property to
ensure the following:
In case of under construction property:
Stage of construction is the same as that mentioned in the payment notice given to the
builder.
Quality of construction
Satisfactory progress of work.
Lay out of the flats and area of property is within the permission granted by the governing
authority
Requisite certificate have been received by the builder to start the construction at the site.

In case of ready / Resale construction:

External maintenance of the property.
Internal maintenance of the property.
Age of the building
Whether the building will last the tenure of the loan
Quality of construction
There is no existing lien or mortgage on the property
The list of valuation engineers empanelled by the bank need to take up these various
documents and ensure that the report is furnished in the prescribed format and that loan
amount requested by the applicant is sufficient to complete the project. The details in the
property report given by the technical term and compare it with the legal opinion and
application and ensure that there are no discrepancies. After completion of the above
checks and scrutiny the manager RM must forward the home loan process
not along with the home loan application and other enclosures Legal opinion, technical
appraisal report, for further processing to the Loan Manager term, after retaining in the
customer’s file, copy of the following papers:
Home loan application
Legal opinion with all enclosures
Technical appraisal report
Loan Department has to send the documents and papers to the RM for further scrutiny and
processing of the proposals. This would increase the turnaround time, of processing and
also additional charge towards the courier charges and also losing the documents in
transit, In order to avoid the above discrepancies the documents are verified by the
document imaging system. Newgen document imaging system is introduced to facilitate
electronic transmission of documents for processing of proposals by RM.
It facilitates scanning and maintenance of scanned images.
It also provides the provision of linking the documents if the same document is required for
multiple loans
Provisions to make remarks, on the document without disturbing the original.
Scanned images can be attached to any mail
This facilitates easy transmission of data and other documents and also provides the
flexibility in loan processing and helps in fast transmission of data, these all advantages
helps in easy disbursement of loans.

THE INNOVATIVE LOAN CONCEPTS

1. THE CONCEPT OF SURF
The new concept of SURF is the step up repayment facility, it is a scheme provided to young
professionals who have just begun their careers, considering that their repayment capacity
will increase steadily in the near future.
The scheme increases the repayment capacity of a customer, his loan eligibility increases as
it considers the increase in income of the customer over the next few years.
Corporation bank has introduced this SURF concept in its home loan scheme.
Corporation Bank has introduced ‘Corp Flexi Home Loan’ a variant of the housing loan with
attractive feature of Progressive Monthly Installment (PMI) i.e. Repayment linked to
increase in future salary earnings.
The scheme provides for “step-up installment facility” under Corp Home Scheme. The Corp-
Flexi scheme is offered with two options.
Option1: The borrower can opt for higher quantum of loan (130% of eligible amount under
the normal scheme) as per the present income criteria with a provision to pay the
installments based on current income initially and gradually increases over the latter part
of repayment period.

Option 2: The loan shall be considered as per applicant’s normal eligibility with a provision
to pay lower installments initially (70% of the normal EMI) and installments are stepped
up in the later part of the repayment period.

2. THE HOME SAVER LOANS

Home Saver is a revolutionary new concept in home loans designed to save you interest
thereby letting you pay off your loan faster.
The Standard Charted bank offers a special home loan named the “home saver advantage”,
the home saver advantage, where the interest rates vary from 7.75 per cent to 8 per cent.
Every month, all you need to do is deposit your surplus funds, be it your salary or other
savings into Home Saver, instead of letting them lie idle in different accounts.
All this money then works towards reducing you interest payable because the deposits
automatically reduce the balance outstanding on which the interest is calculated on a daily
basis.
So, more the number of days you place your savings into Home Saver, greater is the interest
saving. There is also continuous access to your funds 24 hours a day with the globally valid
ATM cum debit card. The loan taker should maintain a deposit account with the bank to
avail the home saver advantage.

Unique Features of the home saver:

Freedom to save more

Freedom to reduce your loan period
Freedom to access your money – anytime, anywhere
Home Saver is currently available in Bangalore, Chennai, and Delhi, Kolkata, Mumbai and
pune.

Freedom to save more:

With Home Saver, there is more to save than a normal low-cost home loan. Because
interest is calculated on your daily balance, you can reduce your interest cons substantially
even if your surplus savings are in the account for only a day. For each day that your
outstanding balance reduces, you pay les interest for that day.
Since that’s interest saved not earned, you save on taxes that you would otherwise pay on
your interest earned!
Freedom to reduce your loan period:
Home Saver gives you the flexibility and freedom to make excess payments so that you can
reduce the duration of your loan anytime, without penalties.
 Chapter – 4

Data Analysis and

Interpretation
 Ratios
Profitability March- 2015 March- 2016 March- 2017
Ratios %

Operating Profit 19.87 30.78 33.15

Margin

Gross Profit Margin 18.05 28.58 30.50

Net Profit Margin 11.35 12.82 13.57

Turnover Ratios

Inventory Turnover 0.00 0.00 0.00

Ratio

Debtor Turnover Ratio 0.00 0.00 0.00

Fixed Asset Turnover 5.00 5.18 4.33

Ratio

Solvency Ratio

Current Ratio 0 .28 0 .27 0 .26

Debt Equity Ratio 9.49 8.76 10.62

Interest Covering Ratio 0 .44 0 .78 0 .87

Performance Ratio %

Return On Investment 2.48 3.38 3.68

Return On Networth 15.32 13.83 17.74

Dividend Yield 22.16 22.16 22.91

 Profit & Loss Accounts (Rs. in millions)

March - 2015 % March - 2016 % March - 2017 %

(12 months) (12 months) (12 months)

Sales 197,707.18 +1.00 123,544.10 +1.00 83,033.40 +0.99

Other
0.00 430.40 +0.00 1,029.60 +0.01
Income

Total
197,707.18 - 123,974.50 - 84,063.00 -
Income

Raw
Material 0.00 0.00 0.00
Cost

Excise 0.00 0.00 0.00

Other
158,418.44 +0.80 85,506.80 +0.69 55,505.10 +0.66
Expenses

Operating
39,288.74 +0.20 38,037.30 +0.31 27,528.30 +0.33
Profit

Interest
89,111.04 +0.45 48,871.20 +0.39 31,794.50 +0.38
Name

Gross Profit -49,822.30 -0.25 -10,833.90 -0.09 -4,266.20 -0.05

Depreciation 3,599.09 +0.02 2,717.20 +0.02 2,196.00 +0.03

Profit Bef.
32,956.70 +0.17 22,803.80 +0.18 16,402.00 +0.20
Tax

Tax 10,549.20 +0.05 6,909.00 +0.06 4,977.00 +0.06

Net Profit 22,407.50 +0.11 15,894.80 +0.13 11,425.00 +0.14

Other Non-
Recurring 35.99 +.00 6.40 -14.00 .00
Income
Reported
22,443.49 +0.11 15,901.20 +0.13 11,411.00 +0.14
Profit

Equity
4,253.84 +0.02 3,012.70 +0.02 2,235.70 +0.03
Dividend
BALANCE SHEET SIZE (Rs. ADVANCES (Rs.
Crores) 183271 Crores) 98883
133177

91236 63427
46945

2015 2016 2017 2015 2016 2017

RETAIL ASSETS
(Rs.Crores)
61154

39316
28327

2015 2016 2017

 CAPITAL ADEQUACY DEPOSITS (Rs. Crores)
(%) 15.20% 142812

100769
13.60% 68298
13.10%

2015 2016 2017 2015 2016 2017

SAVINGS DEPOSITS (Rs. Crores)RETURN ON CAPITAL

34915
19.40% (%)
16.10% 16.20%
26154
19585

2015 2016 2017

2015 2016 2017
 10
DEVIDEND PER SHARE (Rs.)
8.5

5.5

4.5
3.5
3
2.5
2
1.3 1.6

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

EARNING PER SHARE (Rs.) 52.9

46.2

36.3

27.9
22.9
18
13.8
11
8.6
5.9
4.1

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
 PROFIT AFTER TAX (Rs. Crores) 2245

1590

1141

871
666
510
388
297
210
82 120

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

RUPEE EARNED
0.05% Interest from advances
20.42%

Profit on investment

2.24% Commission, Exchange &

Brokerage
0.96%
61.85% Other interest income

12.52% FX & Derivative income

Interest from investment

1.95%

Others
 RUPEE SPENT

29.52%
Interest expense
tax
47.55% provisions
dividend & Tax on Dividend
Transfer to reserve
4.62% Operating Expense
2.66%

10.03%
5.63%
Data Analysis and Interpretation

=================================================

As mentioned earlier, in this study 100 respondents, who have taken

home loan during the period of 2017-2018 from BAJAJ HOME LAON in
Visakhapatnam City, have been selected. Before analysing the collected data,
it is important to know something about Visakhapatnam City.

4.1 Brief Profile of Visakhapatnam

Visakhapatnam is a city located on the Southern part of India in the
State of Andhra Pradesh . It is one of the most dynamic cities of India with
one of the fastest population growth rate due to immigration from various
parts of Andhra Pradesh and other states of India.

History

Visakhapatnam also known as Vizag and Waltair is the largest city and the financial
capital[5] of the Indian state of Andhra Pradesh.The city is the administrative headquarters
of Visakhapatnam district and the Eastern Naval Command of the Indian Navy. Its
geographical location is amidst the Eastern Ghats and the coast of the Bay of Bengal. It is
the most populous city in the state with a population of 2,035,922 as of 2011, making it the
14th largest city in the country. It is also the 9th most populous metropolitan area in India
with a population of 5,340,000. With an output of $43.5 billion, Visakhapatnam is the ninth-
largest contributor to India's overall gross domestic product as of 2016.

Visakhapatnam's history stretches back to the 6th century BCE, when it was considered a
part of the Kalinga Kingdom, and later ruled by the Vengi, the Pallava and Eastern Ganga
dynasties. Archaeological records suggest that the present city was built around the 11th
and 12th centuries with control over the city fluctuating between the Chola Dynasty and
the Gajapati Kingdom, until its conquest by the Vijayanagara Empire in the 15th century.[16]
Conquered by the Mughals in the 16th century, European powers eventually set up trading
interests in the city, and by the end of the 18th century it had come under French rule.
Control passed to the British in 1804 and it remained under British colonial rule until
India's independence in 1947.

The city is home to the oldest shipyard and the only natural harbour on the east coast of
India. Visakhapatnam Port is the fifth-busiest cargo port in India, and the city is home to
the headquarters of the Indian Navy's Eastern Command. Visakhapatnam is a major tourist
destination and is particularly known for its beaches. It is referred to by many nicknames
such as The City of Destiny and The Jewel of the East Coast. It has been selected as one of the
Indian cities to be developed as a smart city under the Smart Cities Mission. As per the
Swachhta Sarvekshan rankings of 2017, it is the third cleanest city in India.

Historical population

Year Pop. ±%

1871 32,191 —

1881 30,291 −5.9%

1891 34,487 +13.9%

1901 40,892 +18.6%

1911 43,413 +6.2%

1921 44,711 +3.0%

1931 57,303 +28.2%

 1941 70,243 +22.6%

1951 108,042 +53.8%

1961 211,190 +95.5%

1971 363,467 +72.1%

1981 603,630 +66.1%

1991 752,037 +24.6%

2001 1,345,938 +79.0%

2011 2,035,922 +51.3%

In Vizag , people living in rented tenaments are as high as 37%. People mostly
live in tenament duplex type of dwelling units on an average area of 576 sq ft
built-up area with three rooms, whereas in slums the average area is 250 sq ft
built-up area with 1.6 rooms.

Due to the rapid industrial growth, urbanization, migration, etc. in Vizag , the
demand for home loan is increasing day by day. Total housing loan accounts and
sanctioned limit in Vizag is as shown from this table.
 Table 4.2 Total Housing Loan Accounts and Sanctioned Limits in Vizag

Growth
Particulars 2013 2014 2015 2016 2017
Rates
A/C
16,922 22,717 27,434 32,040 33,451 97.67758
(in Nos.)
Vizag
S/Limit
54,46,223 88,93,143 1,25,969 1,84,93,128 18,977,333 248.4494
(in Lakhs)
Source: Trend and Progress Report, RBI,2013-2017.

A/C: Number of Accounts

S/Limit: Sanctioned Limit

(1) Age of the Respondents

The first characteristic of the respondents that is taken into account is
the age of the respondent. Table 4.5 given below shows the age distribution
of the respondents. It can be seem from the table that almost half (48%)
respondents belong to the age group of 31 to 40 years, whereas the next age
group in terms of the number was 41 to 50 years to which (22%) of the
respondents belonged. 14% of the respondents were above 50 years of age of
which 3 were above 60. Thus, 70% of the respondents belonged to the
middle age group, i.e. 31 to 50 years.
 Table 4.5 Age of the Respondents

Age of the Respondents (years) Number of Respondents (%)

Below 30 16 16.0
31 to 40 48 48.0
41 to 50 22 22.0
Above 50 14 14.0
Total 100 100.0

.
Figure 4.2 Age of the Respondents
60
48
50

40

30
22
20 16 14

10

Below 30 31 to 40 41 to 50 Above 50

Age (In Years)

(2) Sex of the Respondents
Out of the 100 respondents surveyed, 78% were males and the remaining 22%
were females. Thus, the sample was male dominated.

(3) Educational Qualification of the Respondents

Education is one of the most important characteristics of the customers because the perception,
awareness and behavior of the customers depend largely on his/her educational qualifications.
Among the selected respondents, a majority (55%) were graduates, while 10 had studied upto
S.S.C. level and 6 were educated upto H.S.C. and under graduate levels. Apart from this, 23
respondents had other qualifications like Diploma, etc. The relevant data are provided in table
4.6 below.
 Table 4.6 Educational Qualifications of the Respondents
Educational Level Number of Respondents (%)

S.S.C 10 10.0
H.S.C 06 06.0
Under Graduate 06 06.0
Graduate 55 55.0
Post Graduate/Diploma 23 23.0
Total 100 100.0

Figure 4.3 Educational Level of the Respondents

60 55

50

40
23

20
10
6 6

0
S.S.C H.S.C Under Graduate Post Graduate
Graduate

Educational Level
(4) Occupation of the Respondents
Table 4.7 given below shows the profession of respondents which may also be an
important factor affecting the decision making of customers. It was found that half of the
respondents (50%), were from the business class, 39% were doing some sort of service,
while only 11% were professionals like doctors, C.A., Engineers, etc.
 Table 4.7 Occupation of the Respondents

Types of Occupation Number of Respondents (%)

Business 50 50.0

Service 39 39.0
Profession 11 11.0

Total 100 100.0

Figure 4.4 Type of Occupation of the Respondents

11

Business
50 Service

39 Profession
(5) Income of the Respondents
Annual Income of the respondents is the most important factor determining their
demand for home loan. Table 4.8 gives information on the annual income of the
respondents in which the respondents are divided into four income groups. It is found that
the maximum number of respondents (32) were in the income group of ` 2.4 lakhs to 3.6
lakhs and the next important income group was less than ` 1.8 lakhs. There were 19
respondents earning more than ` 3.60 lakhs. The minimum and maximum annual income
were ` 72, 000 and ` 30,00,000 respectively.
 Table 4.8 Annual Income of the Respondents

Income Group ( ` in lakhs) Number of Respondents (%)

< 1.8 28 28.0
1.8 to 2.4 21 21.0
2.4 to 3.6 32 32.0
> 3.6 19 19.0
Total 100 100.0

Figure 4.5 Income Level of Respondents

> ` 3.6 19
Income Level (in ` )

`2.4 to `3.6 32

` 1.8 to `2.4 21

< ` 1.8 28

0 5 10 15 20 25 30 35
(%)

(6) Type of Family of the Respondents

The demand for housing is affected by an important social factor, viz. type of
family. Normally, persons living in a joint family are likely to have a higher propensity to
acquire an independent house of their own. Among the selected respondents 77% lived in
a nuclear family and the remaining 23% lived in a joint family.

(7) Loan Taken in the Past

In order to analyze the behavior of customers who have taken home loans from
the banks, it was necessary to examine whether they had previous experience of taking a
loan. The response of the respondents in this regard indicated that only 32% of them had
taken a loan in the past and for the remaining 68%, this was the first experience of taking
a loan.
(8) From which Bank, Loan is Taken in the Past
Table 4.9 From which Bank, Loan is Taken in the Past

Banks Number of Respondents (%)

BAJAJ HOME LOAN 3 8.82
Canara Bank 2 5.88
Dena Bank 1 2.94
HDFC Bank 9 26.47
HDFC Bank and BOB 1 2.94
Andhra Bank 2 5.88
ICICI 3 8.82
SDCB 1 2.94
SPB 1 2.94
SBI 9 26.47
Total 32 100

Figure 4.6 From which Bank, Loan is Taken in the Past

30.00
26.47 26.47
25.00

20.00
(%)

10.00 8.82 8.82

5.88 5.88
5.00 2.94 2.94 2.94 2.94

0.00
BAJAJ Canara Dena HDFC Andra ICICI SDCB SPB SBI
Bank Bank Bank Bank and Bank

BOB

Banks

It is found that the largest number of respondents (09) had taken loan from the
HDFC bank and SBI earlier. The other important banks were BAJAJ HOME LOAN
(9) Types of Loan taken in the Past
It would be interesting to know which types of loans were taken by the
respondents earlier. The information on the type of loan taken earlier by the respondents
are shown in table 4.10 given below.

Table 4.10 Types of Loan taken in the Past

Types of Loan Number of Respondents (%)

Home Loan 3 8.82

Personal Loan 6 17.65
Vehicle Loan 20 58.82
Home Loan & Vehicle Loan 1 2.94
Personal Loan & Others 2 5.88
Others 2 5.88
Total 34 100.00

Figure 4.7 Types of loan taken in the past

58.82
60.00

50.00

40.00
(%)

17.65
30.00 8.82
5.88 5.88
2.94
20.00

10.00 Home Loan Personal Vehicle Home Loan Personal Others

& Vehicle Loan &
Loan Loan
Loan Others
Types of Loan

The above table reveals that most of the respondents viz. 62.0% (21 out of 34)
had taken loan for buying vehicles. The next important type of loan was the personal
loan. Only 8.82% (3) respondents had taken home loan earlier. This indicates that most of
the respondents selected in the sample were taking home loans for the first time.
(10) Sources of Information
An attempt was made to examine the source of information regarding the home
loans. Table 4.11 given below, which is based on the information provided by the
respondents, gives the relevant figures.

Table 4.11 Sources of Information

Sources of Information Number of Respondents

Advertisement 32
a. Newspaper 06
b. T.V. 09
c. Internet 04
d. Others 13
Total (a+b+c+d) 32
By Bank 37
a. Staff/Agent 23
b. SMS/ Phone Call 08
c. Others 06
Total (a+b+c) 37
Others 83
a. C.A./ Loan Consultant 56
b. Friends 19
c. Relatives 04
d. Neighbour 02
e. Others 02
Total (a+b+c+d+e) 83

It is evident from this table that as many as 83 respondents availed the

information about home loans from “Others”, which included 56 respondents who get the
information from C.A./ loan consultant, 19 from friends and the remaining 8 from the
relatives, neighbours, others, etc. The second most important source of information was
 “Banks” (37 respondents) consisting of 23, 08, and 06 respondents who received
information from bank staff/agents, SMS/Phone calls and others respectively. The last
important source of information is “Advertisement” from which 32 respondents received
the information. In this category others (hoardings, banners, etc.) provided information to
13 respondents while the sources like newspaper, T.V. and Internet were stated as sources
of information by only 06, 09 and 04 respondents respectively.
However, in the study it was found that 72%, 18% and 10% respondents came to
know about home loan through print and electronic media, friends and relatives and
builders/developers respectively. But in my study, the results had shown that only 27%
and 25% respondents came to know about home loan through print and electronic media
and friends and relatives respectively. However, in my study more respondents (56%)
came to know about home loan through CA / loan consultant.

(11) Year in which the Loan was Taken

Table 4.12 given below gives information regarding the year in which loan was
taken by the respondents. It is clear from this table that a large majority of them (76) had
taken home loan in the year 2017, 24 had taken the loan in the year 2016.

Table 4.12 Year in which the Loan was Taken

Loan taken Number of Respondents (%)

During 2016 24 24.0

During 2017 76 76.0

Total 100 100.0

(12) Term of Loan

The respondents were asked to provide information on the term of loan taken
by them. On the basis of the replies given by them, table 4.13 given below was
constructed.
 Table 4.13 Term of Loan

Years Number of Respondents (%)

5 to 10 54 54.0
11 to 15 40 40.0
> 15 06 06.0
Total 100 100.0

Figure 4.8 Term of Loan

> 15 6
Years

11 to 15 40

5 to 10 54

0 10 20 30 40 50 60

(%)

It can be seen from the table that slightly more than half (54%) of the respondents
had taken home loans with terms ranging from 5 to 10 years. For 40 respondents the term
was between 11 to 15 years and for the remaining 06 the term was more than 15 years.
(13) Year in which the Loan was Taken
Table 4.12 given below gives information regarding the year in which loan was
taken by the respondents. It is clear from this table that a large majority of them (76) had
taken home loan in the year 2010, 24 had taken the loan in the year 2009.

Table 4.12 Year in which the Loan was Taken

Loan taken Number of Respondents (%)

During 2009 24 24.0

During 2010 76 76.0

Total 100 100.0

(14) Term of Loan

The respondents were asked to provide information on the term of loan taken
by them. On the basis of the replies given by them, table 4.13 given below was
constructed.
 Table 4.13 Term of Loan

Years Number of Respondents (%)

5 to 10 54 54.0
11 to 15 40 40.0
> 15 06 06.0
Total 100 100.0

Figure 4.8 Term of Loan

> 15 6
Years

11 to 15 40

5 to 10 54

0 10 20 30 40 50 60

(%)

It can be seen from the table that slightly more than half (54%) of the respondents
had taken home loans with terms ranging from 5 to 10 years. For 40 respondents the term
was between 11 to 15 years and for the remaining 06 the term was more than 15 years.
 Table 4.16 Time Taken for Sanctioning Home Loan

Days BAJAJ SPB Total

Upto 7 07 02 09
(77.78%) (22.22%) (100.0%)
8 to 15 29 10 39
(74.36%) (25.64%) (100.0%)
16 to 20 04 08 12
(33.33%) (66.67%) (100.0%)
21 to 30 07 25 32
(21.88%) (78.13%) (100.0%)
>30 03 05 08
(37.50%) (62.50%) (100.0%)
Total 50 50 100

Figure 4.11 Time taken for Sanctioning Home Loan

90.00
77.78 78.13
74.36
80.00 66.67
62.50
70.00
(%)

60.00 37.50
33.33
50.00 25.64
22.22 21.88
40.00

30.00
Upto 7 8 to 15 16 to 20 21 to 30 >30

Days

BOB SPB

Comparing the relevant figures for Bajaj and SPB it is found that in general Bajaj
had sanctioned the loan within a shorter period. For example, out of 9 cases in which the
loan was sanctioned within 7 days, 8 were Bajaj customers and only 1 was SPB
customer. Similarly, for 8 to 15 days duration, 27 were BAJAJ customers and only 10
were SPB customers. On the other hand, for 24 customers of SPB the loan was
sanctioned within 21 to 30 days, but the corresponding number was only 6 in case of
bajaj.
(15) Documents Demanded for Home Loan
The respondents were also asked during the survey to reveal the documents which
were demanded by the banks alongwith the application form. This was done just to assess
the knowledge and awareness of the respondents.

Table 4.17 Documents Demanded for Home Loan

Documents Number of Respondents

PAN Card 94
I.T. Returns 94
Residence Proof 93
Latest Salary Pay Slip 42
Six Months Bank Statement 92

It was found that between 6 and 8 respondents responded negatively when they
were asked whether PAN card, income tax returns, residence proof and 6 months bank
statements were demanded by the bank. Moreover, 42 respondents said that the Latest
Salary Pay Slips were demanded by the bank at the time of processing the loan
application.

(16) Property Insurance

Only 4 of the 100 respondents claim that they had not taken property insurance at
the time of disbursement of loan. It means that out of the 100 respondents covered in the
study, 96 respondents had taken property insurance.

(17) Reasons for Taking the Home Loan

It is important to know the purpose of taking home loan by the respondents.
During the survey the customers were asked to reveal the reasons for availing the home
loans. On the basis of their responses, Table 4.18 given below was constructed.
 Table 4.18 Reasons for Taking Home Loan

Reasons BAJAJ SPB Total

In place of rented property 06 06 12
(50.0%) (50.0%) (100.0%)
For investment 23 14 37
(62.16%) (37.84%) (100.%)
Desire for big house 14 21 35
(40.0%) (60.0%0 (100.0%)
To get relief in income tax 23 10 33
(69.70%) (30.30%) (100.0%)
To receive rent income by purchase 12 09 21
of new house (57.14%) (42.86%) (100.0%)
Others 02 02 04
(50.0%) (50.0%) (100.0%)

Figure 4.12 Reasons for Taking Home Loan

80.00 69.70
62.16 60.00
70.00 57.14
50.00 50.00 50.00 50.00
60.00 42.86
37.84 40.00
30.30
50.00

40.00

30.00
In Place of For Desire for To Get Relief To receive Others
Rented Investment Big House in Income rent income
Property
Tax by purchase
of new
house
Reasons

BAJAJ
(15) Types of Property
It will be useful to know the types of property the respondents wanted to buy
through the home loans. Various types of property and the corresponding number of
respondents who wanted to buy those properties are provided in the following Table
4.19.
 Table 4.19 Types of Property

Properties BOB SPB Total

New flat 32 18 50
New bungalow 02 10 12
New row house 08 13 21
Old flat 05 01 06
Old bungalow 01 04 05
Renovation of old flat 00 01 01
Extension of old bungalow 01 0 01
Renovation of old bungalow 01 01 02
Others 00 02 02

Figure 4.13 Types of Property

100.00 100.00
100.00
100.00
83.33 83.33 80.00
90.00
64.00 83.33
80.00 50.00
61.90
70.00 36.00
50.00
25.00
60.00 16.67

50.00 0.00 0.00 0.00

NF NB NRH OF OB ROF EOB ROB Others

Properties

BAJAJ SPB
(15) Area (sq. ft.) of the New Flat

Table 4.20 Areas (sq. ft.) of the New Flat

Area (in Sq. ft.) Number of Respondents (%)

500 to 1000 12 24.0
1001 to 1250 14 28.0
1251 to 1500 16 32.0
>1500 08 16.0
Total 50 100.0

It can be seen from the above table that most (more than 60%) respondents have
preferred to buy new flats measuring 1000 to 1500 sq. feet. Only 08 respondents were
ready to buy bigger flats measuring 1500 or more sq. feet.

(16) Area (sq. ft.) of the New Bungalow

Table 4.21 Areas (sq. ft.) of the New Bungalow

Area (in Sq. ft.) Number of Respondents (%)

350 to 1200 04 33.33
1201 to 1700 06 50.0
> 3500 02 16.67
Total 12 100.0

It can be seen from the above table that 4 and 6 respondents had planned to buy a
small size bungalow (350 to 1200 sq. ft.) and medium size new bungalow (1200 to 1700
sq. ft.) respectively. There were also 2 respondents who wanted to buy a bigger size
bungalow (more than 3500 sq. ft.).
(17) Area (sq. ft.) of the New Row House

Table 4.22 Areas (sq. ft.) of the New Row House

Area (in sq. ft.) Number of Respondents (%)

201 to 500 08 38.10
501 to 750 07 33.33
751 to 1100 03 14.29
> 1100 02 09.52
Total 21 100.0

The areas of new row houses that 21 respondents wanted to buy are given in
Table 4.22 given above. It is found from this table that 8 and 7 respondents wished to buy
a new row house measuring 200 to 500 sq. ft. and 501 to 750 sq. ft. respectively. As
against this, only 3 respondents wished to buy new row house measuring 751 to 1000
sq.ft. and 2 were willing to buy the new row houses of about 1500 sq. ft.

(18) Area (sq. ft.) of the Old Flat

Out of the 6 respondents who desired to buy old flats through the home loan, 4 of
them wanted to buy a small flat measuring between 400 and 617 sq. ft., 1 wanted to buy a
medium size of flat of 1170 sq. ft. and the remaining respondent desired to buy a large
old flat measuring 2650 sq. ft.

(19) Area (sq. ft.) of the Old Bungalow

One of the respondents wanted to buy a small size old bungalow of 1266 sq. ft.
and the remaining 4 wanted to buy old bungalows of 2000 to 2500 sq. ft.

(20) Number of Respondents who were Account Holder of the Bank

Table 4.23 given below provides the necessary information on this aspect. 52
respondents were account holders of the bank when they applied for home loan. Out of
them, 22 were relatively new account holders (9 years) and 27 were holding account for
10 to 20 years and 3 had accounts for more than 20 years.
 Table 4.23 Number of Respondent who were Account Holder of the Bank

No. of Years Number of Respondents (%)

2 to 9 years 22 42.31
10 to 20 years 27 51.92
>20 years 03 5.77
Total 52 100

(21) Reasons for Rejection of Application

Table 4.24 gives the reasons for the rejection of applications. It indicates that the
application of 12 respondents were rejected, in case of 07 respondents (58.33%) the
reason for rejection was negative CIBIL (Credit Investigation Bureau of India Ltd.)
report. The other reasons were less income (16.67%), plan of the property not sanctioned
(16.67%) and other reasons (8.33%).

Table 4.24 Reasons for Rejection of Application

Reasons Number of Respondents (%)

Due to Less Income 02 16.67
Plan not Sanctioned 02 16.67
CIBIL Report 07 58.33
Other Reason 01 8.33
Total 12 100.00

Figure 4.14 Reasons for Rejection of Application

58.33

60
(%)

50
30 16.67 16.67
8.33
20

10
Less Income Plan not CIBIL Report Other Reason
Sanctioned
Reasons
(22) Other Services of the Bank Utilized by the Respondents
Table 4.25 provides the responses of the respondents regarding other services of
the bank utilized by them. As can be seen from the table two important reasons are
savings account facility (63) and current account facility (61). The third and the fourth
service in terms of importance are the “locker facility (35)” and “overdraft (14)”. Less
than 5 customers utilized other services such as cash credit, insurance, mortgage loan,
etc.
Table 4.25 Other Services of the Bank Utilized by the Respondents
Other Services Utilized BAJAJ SPB Total
Current A/C 21 41 62
(33.87%) (66.13%) (100.0%)
Saving A/C 39 24 63
(61.90%) (38.10%) (100.%)
Overdraft 10 05 15
(66.67%) (33.37%) (100.%)
Cash Credit 03 0 03
(100.0%) (00.0%) (100.%)
Mortgage Loan 0 01 01
(00.0%) (100.0%) (100.0%)
Insurance 03 01 04
(75.0%) (25.0%) (100.0%)
Locker 19 16 35
(54.29%) (45.71%) (100.%)
Others 01 02 03
(33.33%) (66.67%) (100.0%)

Among the three important facilities that were utilized by the respondents, in the
case of current account 41 and 21 respondents were using the facility from SPB and
bajaj respectively and in the case of savings account the dominance of these two banks
was reversed as 3 and 24 respondents used this facility from the banks. However, in the
case of “locker facility” the numbers of respondents obtaining this facility were almost
equal (19 and 16) respectively.
Association Between Various Characteristics

In this section, an attempt has been made to determine whether there exists any
association between various characteristics on which data were collected during the
survey. Such association may be found to be helpful to the policy makers for formulating
policies regarding home loans.

Relation between Age of the Respondents and Various Reasons for Home
Loans

Table 4.34 Age of Respondents and Reason for Home Loan – “For Investment”
Age of Respondents Yes No Total
< 30 yrs 05 11 16
13.5% 17.5% 16.0%
(31.3%) (68.8%) (100.0%)
31 to 40 yrs 19 29 48
51.4% 46.0% 48.0%
(39.6%) (60.4%) (100.0%)
41 to 50 yrs 07 15 22
18.9% 23.8% 22.0%
(31.8%) (68.2%) (100.0%)
> 50 yrs 06 08 14
16.2% 12.7% 14.0%
(42.9%) (57.1%) (100.0%)
Total 37 63 100
100.0% 100.0% 100.0%
(37.0%) (63.0%) (100.0%)
32 value 0.824
Significance Level 0.844

The table given above shows a two way classification of the customers selected in
the sample according to two attributes-their age and whether the home loan was taken
“for investment.” It is found that the percentage of the respondents, who took the home
loan for investment purpose, varied between 32% and 42% without much variation
within the four age groups. Thus, it seems that age of the respondents does not have any
effect on their decisions regarding taking home loan as investment.
 The above conclusion is also confirmed by the x2 test.
Here,
H0 : There is no association between the age of the respondents and whether
the home loan is taken for investment.
H1 : There is association between the age of the respondents and whether the
home loan is taken for investment.
In this case the value of x2 is 0.824 which has probability of 0.844. Since, this
probability level is not less than 0.05; we do not reject H0 i.e. no association between the
ages of the respondents whether the home loan is taken for the investment is found.
This confirms the earlier conclusion.
Similar analysis was done for testing the association between the age of the
respondents. Another reason was for taking home loan- “desire for big house”, “to get
relief in income-tax” and “to receive rent income”. The values of x2 in this three cases
were 0.580, 0.248 and 0.082 respectively suggesting that there is no association between
these reasons and the age of the respondents. Thus, no association was found between the
age of respondents and any of the above reasons for taking home loan.

Table 4.35 Age of Respondents and Reason for Home Loan –

“Desire for Big House”
Age of Respondents Yes No Total
< 30 yrs 06 10 16
17.1% 15.4% 16.0%
(37.5%) (62.5%) (100.0%)
31 to 40 yrs 15 33 48
42.9% 50.8% 48.0%
(31.3%) (68.8%) (100.0%)
> 4 yrs 14 22 36
40.0% 33.8% 36.0%
(38.9%) (61.1%) (100.0%)
Total 35 65 100
100.0% 100.0% 100.0%
(35.0%) (65.0%) (100.0%)
32 value 0.580
Significance Level 0.748
 Table 4.36 Age of Respondents and Reason for Home Loan –
“To Get Relief in Income Tax”

Age of Respondents Yes No Total

< 40 yrs 20 44 64
60.6% 65.7% 64.0%
(31.3%) (68.8%) (100.0%)
40 to 50 yrs 08 14 22
24.2% 20.9% 22.0%
(36.4%) (63.6%) (100.0%)
> 50 yrs 05 09 14
15.2% 13.4% 14.0%
(35.7%) (64.3%) (100.0%)
Total 33 67 100
100.0% 100.0% 100.0%
(33.0%) (67.0%) (100.0%)
32 value 0.248
Significance Level 0.883

Table 4.37 Age of Respondents and Reason for Home Loan –

“To Receive Rent Income”

Age of Respondents Yes No Total

< 40 yrs 14 50 64
66.7% 63.3% 64.0%
(21.9%) (78.1%) (100.0%)
> 50 yrs 07 29 36
33.3% 36.7% 36.0%
(19.4%) (80.6% (100.0%)
Total 21 79 100
100.0% 100.0% 100.0%
(21.0%) (79.0%) (100.0%)
32 value 0.082
Significance Level 0.775
 Relation between Educational Qualifications of the Respondents and the
Various Reasons for Home Loans

Table 4.38 Educational Qualifications of Respondents and Reason for Home Loan – “In
Place of Rented Property”
Educational Qualification of Respondents
Response Total
Below Graduate Above Graduate
Yes 06 06 12
50.0% 50.0% 100.0%
(27.3%) (07.7%) (12.0%)
No 16 72 88
18.2% 81.8% 100.0%
(72.7%) (92.3%) (88.0%)
Total 22 78 100
22.0% 78.0% 100.0%
(100.0%) (100.0%) (100.0%)
32 value 06.230
Significance Level 0.013

The relevant data are provided in table 4.38. It is clear from the table 4.38 that
among the respondents who were non-graduates and above graduates, the percentages
for respondents who declared the reason for taking home loan as “in place of rented
property” were 27.3% and 7.7% respectively.
These figures show a clear association between educational qualification of the
respondents and this particular reason.
x2 test was performed to verify the above conclusion.
Here,
H0 : There is no association between education qualification of the respondents
and the reason “in place of rented property”.
H1 : There is association between educational qualifications of the respondents
and the reason “in place of rented property”.
Here, the calculated value of x2 is 6.23 with significance level of 0.013. Since, this
level is less than 0.05, H0 is rejected at 5% level. It means that there is relationship
between educational qualifications of respondents and the reason “in place of rented
property”, and less educated respondents seem to have a tendency for taking home loan
to buy a house “in place of rented property.”
 For other reasons for taking home loan also, x2 test was performed and in case of
all the other reasons, viz. “for investments”, “desire for big house”, “to get relief in
income tax”, “to receive rent income” and “others”, no relationship was found between
them and educational qualifications of the respondents. The relevant data are given below
in table 4.39 to 4.43.

Table 4.39 Educational Qualifications of Respondents and Reason for Home Loan –
“For Investment”
Educational Qualification of Respondents
Response Total
Below Graduate Above Graduate
Yes 08 29 37
21.6% 78.4% 100.0%
(36.4%) (37.2%) (37.0%)
No 14 49 63
22.2% 77.8% 100.0%
(63.6%) (62.8%) (63.0%)
Total 22 78 100
22.0% 78.0% 100.0%
(100.0%) (100.0%) (100.0%)
32 value 0.05
Significance Level 0.944

Table 4.40 Educational Qualification of Respondents and Reason for Home Loan –
“Desire for Big House”
Educational Qualification of Respondents
Response Total
Below Graduate Above Graduate
Yes 05 30 35
14.3% 85.7% 100.0%
(22.7%) (38.5%) (35.0%)
No 17 48 65
26.2% 73.8% 100.0%
(77.3%) (61.5%) (65.0%)
Total 22 78 100
22.0% 78.0% 100.0%
(100.0%) (100.0%) (100.0%)
32 value 1.867
Significance Level 0.172
Table 4.41 Educational Qualifications of Respondents and Reason for Home Loan –
“To Get Relief in Income Tax”

Educational Qualification of Respondents

Response Total
Below Graduate Above Graduate
Yes 05 28 33
15.2% 84.8% 100.0%
(22.7%) (35.9%) (33.0%)
No 17 50 67
25.4% 74.6% 100.0%
(77.3%) (64.1%) (67.0%)
Total 22 78 100
22.0% 78.0% 100.0%
(100.0%) (100.0%) (100.0%)
32 value 1.346
Significance Level 0.246

Table 4.42 Educational Qualification of Respondents and Reason for Home Loan –
“To Receive Rent Income by Purchase of New House”

Educational Qualification of Respondents

Response Total
Below Graduate Above Graduate
Yes 07 14 21
33.3% 66.7% 100.0%
(31.8%) (17.9%) 21.0%
No 15 64 79
19.0% 81.0% 100.0%
(68.2%) (82.1%) (78.0%)
Total 22 78 100
22.0% 78.0% 100.0%
(100.0%) (100.0%) (100.0%)
32 value 1.990
Significance Level 0.158
Table 4.43 Educational Qualification of Respondents and Reason for Home Loan –
“Others”
Educational Qualification of Respondents
Response Total
Below Graduate Above Graduate
Yes 01 03 04
25.0% 75.0% 100.0%
(4.5%) (3.8%) (4.0%)
No 21 75 96
21.9% 78.1% 100.0%
(95.5%) (96.2%) (96.0%)
Total 22 78 100
22.0% 78.0% 100.0%
(100.0%) (100.0%) (100.0%)
32 value 0.022
Significance Level 0.882

Relation between the Occupation of Respondents and the Various

Reasons for taking Home Loans
Relation between the Occupation of respondents and various reasons for
taking home loans like “in place of rented property”, “for investment”, “for desire
of big house”, “to get relief in income-tax”, “to receive rental income” was
analyzed by constructing two-way tables as given below.

Table 4.44 Occupation of Respondents and Reason for Home Loan – “In
Place of Rented Property”
Occupation of Respondents
Response Total
Service Business and Others
Yes 06 06 12
50.0% 50.0% 100.0%
(15.4%) (9.8%) (12.0%)
No 33 55 88
37.5% 62.5% 100.0%
(84.6%) (90.2%) (88.0%)
Total 39 61 100
39.0% 61.0% 100.0%
(100.0%) (100.0%) (100.0%)
32 value 0.694
Significance Level 0.405
 Table 4.45 Occupation of Respondents and Reason for Home Loan –

“For Investment”

Occupation of Respondents
Response Total
Service Business and Others
Yes 12 25 37
32.4% 67.6% 100.0%
(30.8%) (41.0%) (37.0%)
No 27 36 63
42.9% 57.1% 100.0%
(69.2%) (59.0%) (63.0%)
Total 39 61 100
39.0% 61.0% 100.0%
(100.0%) (100.0%) (100.0%)
32 value 1.065
Significance Level 0.302

Table 4.46 Occupation of Respondents and Reason for Home Loan –

“Desire for Big House”
Occupation of Respondents
Response Total
Service Business and Others
Yes 13 22 35
37.1% 62.9% 100.0%
(33.3%) (36.1%) (35.0%)
No 26 39 65
40.0% 60.0% 100.0%
(66.7%) (63.9%) (65.0%)
Total 39 61 100
39.0% 61.0% 100.0%
(100.0%) (100.0%0 (100.0%)
32 value 0.078
Significance Level 0.780
 Table 4.47 Occupation of Respondents and Reason for Home Loan –
“To Get Relief in Income-Tax”
Occupation of Respondents
Response Total
Service Business and Others
Yes 10 23 33
30.3% 69.7% 100.0%
(25.6% (37.7%) (33.0%)
No 29 38 67
43.3% 56.7% 100.0%
(74.4%) (62.3%) (67.0%)
Total 39 61 100
39.0% 61.0% 100.0%
(100.0%) (100.0%) (100.0%)
32 value 1.566
Significance Level 0.211

Table 4.48 Occupation of Respondents and Reason for Home Loan –

“To Receive Rental Income”
Occupation of Respondents
Response Total
Service Business and Others
Yes 07 14 21
33.3% 66.7% 100.0%
(17.9%) (23.0%) (21.0%)
No 32 47 79
40.5% 59.5% 100.0%
(82.1%) (77.0%) (79.0%)
Total 39 61 100
39.0% 61.0% 100.0%
(100.0%) (100.0%) (100.0%)
32 value 0.359
Significance Level 0.549
 Here,
H0 : There is no association between occupation of the
respondents and the various reasons for home loans.
H1 : There is association between occupation of the respondents
and the various reasons for home loans.
The values of x2 were 0.694, 1.065, 0.078, 1.566 and 0.359
respectively, which were all insignificant.
Thus, no relationship was found between the occupation of
respondents and various reasons for home loans.
The relevant data are given in above table 4.44 to 4.48.
Chapter-5
 SWOT ANALYSIS

SWOT Analysis is a powerful technique for understanding your Strengths and Weaknesses, and
for looking at the Opportunities and Threats you face. Used in a business context, it helps you
carve a sustainable niche in your market. Used in a personal context, it helps you develop your
career in a way that takes best advantage of your talents, abilities and opportunities.

SWOT ANALAYSIS OF BAJAJ HOME LOAN

STRENGTH

 Right strategy for the right products.

 Superior customer service vs. competitors.
 Great Brand Image
 Products have required accreditations.
 High degree of customer satisfaction.
 Good place to work
 Lower response time with efficient and effective service.
 Dedicated workforce aiming at making a long-term career in the field.

WEAKNESSES

 Some gaps in range for certain sectors.

  Customer service staff need training.
 Processes and systems, etc
 Management cover insufficient.
 Sectoral growth is constrained by low unemployment levels and competition for staff

OPPORTUNITIES

 Profit margins will be good.

 Could extend to overseas broadly.
 New specialist applications.
 Could seek better customer deals.
 Fast-track career development opportunities on an industry-wide basis.
 An applied research centre to create opportunities for developing techniques to provide added-
value services.

THREATS

 Legislation could impact.

 Great risk involved
 Very high competition prevailing in the industry.
 Vulnerable to reactive
 attack by major competitors
 Lack of infrastructure in rural areas could constrain investment.

 High volume/low cost market is intensely competitive.

KEY POINT
SWOT Analysis is a simple but powerful framework for analyzing company's Strengths and
Weaknesses, and the Opportunities and Threats you face. This helps you to focus on your
strengths, minimize threats, and take the greatest possible advantage of opportunities available to
you.
Chapter-6
CONCLUSION
1. The home loan segment can be extended to the lucrative NRI segment; this would
provide the bank a cutting edge and larger share of the home loan market.
2. The bank can provide the benefits like SMS alert and other features so as to make
the home loans more attractive.
3. The bank can contemplate on decentralizing the operations however taking into
consideration the experience and expertise of the members at Loan Department enters.