CH INSTITUTE OF MANAGEMENT

AND COMMUNICATION

Post Graduate Diploma in Management
Term III (Batch II)
~A study on home loan at HDFC Sales Indore

Subject: Summer Internship project




Guided By: Submitted By:
Prof. Rakshita Puranik Jifay Joshi




ACKNOWLEDGEMENT

Completion oI project and writing oI report is a satisIying event and the pleasant part is the opportunity to
thank those who inspired, contributed and cooperated in it.
I would like to avail this opportunity to express my sincere thanks to all those who have helped me in
making this summer training project a success. Even a most vivid collection oI words admittedly to
express my heartIelt thanks towards one and all those who have selIlessly assisted me in my expedition oI
carrying out this project.
I Ieel deeply bestowed in acknowledging HDFC Sales Pvt. Limited Without his valuable guidance and
help during this summer training project on the topic ~A study on home loan at HDFC Sales Indore
would not have been a success.
My sincere thanks to Mr. Edward Briscoe, Mr. Santosh Suryawanshi, Mr. Ajay Thakur and Mr.
Santosh Thakur Ior helping me at every stage oI my summer training project
I am also thankIul to my institute ~CH Institute of management and communication and all the
respected members Ior recommending my name Ior this project.

Above all I wish to thank my Faculty ProI. Rakshita Puranik who has helped me immensely make this
project a success.









'ijay 1oshi


CERTIFICATE



This is to certiIy that 'Vijay Joshi PGDM (Term III) oI 2010-11 batch in CH Institute oI management
and communication, Indore has carried out a Summer Internship Project entitle ~A study on home loan
at HDFC Sales Indore The work done by him is genuine and authentic.

The work carried out by the student was Iound satisIactory. We wish him all the success in career.














Faculty Guide
Prof. Rakshita Puranik



DECLARATION



I hereby declare that the project report entitled, ~A study on home loan at HDFC Sales Indore is an
authentic work done by me.

The project was undertaken as a part oI the course curriculum oI PGDM (Post graduate diploma in
management) programme at CH Institute oI management and communication, Indore this has not been
submitted to any other examination body earlier.





























Signature

'ijay 1oshi



TABLE OF CONTENTS

CHAP. NO CHAPTER NAME
ACKNOWLEDGEMENT
DECLARATION
CERTIFICATE OF THE COMPANY GUIDE
CHAPTER 1
1. INTRODUCTION
1.1 INTRODUCTIONS TO HOME LOAN
1.2 SCOPE OF THE STUDY
1.3 SIGNIFICANCE OF THE STUDY
1.4 OBJECTIVE OF THE STUDY
1.5 LITERATURE REVIEW
CHAPTER 2
COMPANY PROFILE
2.2 DEPARTMENTAL DETAILS
CHAPTER 3
RESEARCH METHODOLOGY
3.1 INTRODUCTION
3.2 RESEARCH DESIGN
3.3 SAMPLE PROFILE
3.4 METHOD OF DATA COLLECTION
3.5 LIMITATION

CHAPTER 4
4.1 DATA ANALYSIS
CHAPTER 5
5.1 INTERPRETATION AND FINDINGS
CHAPTER 6
6.1 RECOMMENDATION AND DISCUSSION
6.2 BIBLIOGRAPHY
6.3 ANNEXURE



Chapter 1





1. Introduction to Home Loans
As we know that Home is a dream oI every person in this world and it shows the quantity oI eIIorts,
sacriIices luxuries and above all gathering Iunds little by little to aIIord one`s dream. Home loan means
the part oI the money which a person take Irom any Iinancial bank or Iinancial institute Ior the purpose oI
construct home or buy home.
Home is one oI the things that everyone one wants to own. Home is a shelter to person where he rests
and Ieels comIortable. Many banks providing home loans whether commercial banks or Iinancial
institutions to the people who want to have a home
HDFC-(Housing Development And Finance Corporation) Home Loan, India have been serving the people
Ior around three decades and providing various housing loan according to their varied needs at attractive
& reasonable interest rates. Owing to their wide network oI Iinancing, HDFC Housing Loans provides
services at your doorstep and helps you Iind a home as per your requirements.
Many banks are providing home loans at cheapest rate to attract consumers towards them. The more
customer Iriendly attitude oI these banks, currently oIIer to consumers cheapest loan over homes.
In view oI acute housing shortage in the country, and keeping in mind the social economic role oI
commercial banks in the present times, the RBI advised banks to encourage the Ilow oI credit Ior housing
Iinance.
With the RBI reducing bank rate, the home loan market rates nose-diving by 50 basis points. The HDFC
Bank and Standard chartered bank has become the Iirst player in this sector to announce a housing loan
Ior a 20 years period. No doubt it will enhance the end cost people to plan their house over longer
duration now; it has been made easy Ior a person to buy that dream house which he dreamt oI long ago.
HDFC also provides with Home Improvement Loan Ior internal and external repairs and other structural
improvements like painting, waterprooIing, plumbing and electric works, tiling and Ilooring, grills and
aluminium windows. HDFC Iinances up to 85 oI the cost oI renovation (100 Ior existing customers).
Current status is that HDFC reduced home loan rates by 50 basis points Ior all its existing Iloating rate
customers.





2. Home Loan Procedure in India:-

Submission of Application Form: - this is the Iirst step oI home loan in which aIter choosing a particular
home loan, the customer submits the application Iorm to the housing Iinance company (HFC) along with
other relevant documents as required by the HFC. They comprise documents to establish income, age,
residence, employment, investments, etc. The customer also needs to hand over a cheque Ior payment oI
an up Iront (non -reIundable) processing Iee oI about 0.5-1 oI the loan amount to the HFC.

'alidation of the Information: - In the next stage, HFCs validate the inIormation provided by the
customer on the application Iorm. They usually conduct checks on the residential address oI the customer,
the place oI employment oI the customer, and credentials oI the employer. Some HFCs may insist on a
personal interview with the customer and perIorm a reIerence check on the reIerences provided by the
customer on the application Iorm.

Issue of Sanction Letter :- AIter due appraisal oI customer proIile, a sanction letter is issued which
contains details such as loan amount, rate oI interest, annual / monthly reducing balance, tenor oI the loan,
mode oI repayment and general terms and conditions oI the loan. This is the actually the approval oI the
money lending procedure by the company. However, the money is sanctioned only aIter the documents
and the property on behalI oI which the loan is being granted is thoroughly veriIied.

Submission of Documents: - Once the sanction letter is passed, the customer is required to leave the
entire set oI original documents pertaining to the property being purchased with the HFC as security Ior
the loan amount sanctioned. These documents remain in the custody oI the HFC till the time the loan is
Iully repaid. Once the documents are handed over to the HFC, they send all the documents Ior a thorough
legal scrutiny.

'alidation of Property: - Prior to disbursement, the HFC also conducts a site visit to the customer's
property to ensure that all construction norms have been adhered to properly. Once the HFC is satisIied
that the property is legally and technically clear, they disburse the loan amount. The disbursement Irom
the HFI is on the basis oI the stage oI construction oI the property.

Payment Procedure: - Once all the above mentioned process, the borrower is entitled to take the money
Irom the lender party. Until such time that the entire sanctioned amount is not drawn, the customer is
supposed to pay a simple interest on the Actual Amount drawn (without any principal repayments). The
EMI payments commences only aIter the entire sanctioned loan amount is drawn.


























Pub
Pu8
Logln
Scannlng
uaLa LnLry
8ecommendaLlon
Cver (8Cv8)
uoublechecklng
Cver(uCCv)
llxed
charges
ulsbursemenL
of loan
llcaLlon
3. Advantages of Home Loans:-
Home loan itselI is a beneIit because by this loan we can construct or purchase our own home. It has
many beneIits. The various beneIits oI home loans arising to the customers are:-

Attractive interest rates:- The various banks oIIer attractive interest rates to boost and help their
customers. Many banks provide loans on Iixed or Iloating rates to Iacilitate consumers as per their needs.

Help in owning a home:- The home availed by a person with the help oI banks, because they provide
technical and Iinancial assistance to customers Ior owning their dream home.

No requirement of guarantor:- The commercial banks now a day, liberlise their laws regarding home
loans. Some oI banks don`t even require the guarantor to grant loan to their consumers. They also make
consumers Iree by reliving him to Iind a guarantor to complete the proceedings oI availing loan.

Door-Step Services:- These door to step services are provided Irom enquiry stage to the Iinal
disbursement takes place such services are beneIicial Ior customers in present busy liIe. Banks like ICICI
bank and standard chartered bank provide door to step services to customers to borrow loan.

Loan period:- There are many banks which provide maximum loan tenures upto 15-20 years based on
the loan amount and the creatibility oI customers. This relieves the customers to repay loan amount till a
long period.

For accidental death insurance : Some banks provide Iree accidental death insurance with housing
loan which is also beneIicial Ior the customers.
.
O Home loan counseling sharing over 30 years oI home loan experience
O Wide Product Range
O Multiple Repayment Option
O Wide Network oI Iinancing
O Post disbursement service
O Loan repayment option

These beneIits or advantages oI home loans are responsible Ior making than so popular among
customer that a person who doesn`t have their home and want to buy, they do it with home loan. Home
loans help such persons in making their dream home.


4.Drawback Of Home Loans:-
There are some disadvantages in home loan. The main disadvantages oI home loans are high lightened as
below:

Delays in processing: This is the main disadvantages with home loan. Many times, there are huge
delays in processing oI providing home loans because various Iormulations to be IulIilled in this process.
Due to these delays customers Ieel mentally as well as Iinancially weak.

Fluctuating interest rates :- It is also a disadvantage oI home loan that Some banks give home loans at
Iloating rates, which Iluctuate at DiIIerent intervals due to some reasons. These changes sometimes, may
lead to increase in interest rate which will increase the cost oI home loans to the customers
High Cost: High processing cost is also a disadvantage oI home loan because the public sector banks
charge high processing cost Ior home loan`s sanctioning. They are Iorced to pay serious charges at
various stages to IulIill the requirements. Some consumers are not able to pay such charges so such people
could not avail the beneIits oI home loan schemes.
Problems in disbursement:- There are many problems in disbursement oI home loan amount. There are
some delay in disbursement oI loan amount to the customers due to legal Iormalities. This causes
problems to the customers.

These are limitations or disadvantages oI home loans. But some times some banks charges high
installments to repay loan amount. Such also causes problem to customers. These limitations can be
removed by providing good and promote services to the customers.










Scope of the Study
The Indian housing Iinance industry has grown by leaps and bound in Iew years. Total home loans
disbursements by banks has risen which witnesses phenomenal growth Irom last 5 years. There are greater
numbers oI borrowers oI home loans. So by this study we can Iind out the property available Ior sale and
home loan in Indore and the various aspect oI home loan.

Significance of the Study

The reason why this study is signiIicant can be explained some oI aspects, this study investigates the
perceptions, attitudes, viewpoints oI the customer in Indore Ior home loan towards the HDFC sales; this
study also include the research on property which is newly construct or constructed and property available
Ior home loan in Indore.

Objectives of the Study

There is no strongest Ioundation Ior your dream home, than a cheap loan. Home loans have become those
stronger Ioundations Ior people who want to own a home. The main objectives oI the study are as
Iollows:-


To know the awareness oI customers about home loan products and services.

To understand the rate oI home loan in diIIerent banks and institution.

To study the satisIaction level oI customers about home loans.

To study the problems Iaced by customers in obtaining the home loans.

To learn about various aspect oI HDFC home loan ltd.

Research on property available Ior home loan in Indore.




RE'IEW OF LITERATURE


SUMMARY:-

W AIter going through pervious studies oI Home loans I came to conclude that-

W There is growth oI home loans aIter 2001.

W Home loans have an inverse relation with interest rates i.e. when interest rate low the demand oI
home loans increase. (Ojha 1987)

W People are going more towards home loans than private mortgage insurance.
(Berstain 2008)

W Government taking various steps to encourage people to go toward home loans.
(Haavio, Kauppi 2000)

W Growth oI home loans are due to increase oI living standard oI people, shiIting Irom joint Iamily
To nuclear Iamily. (Lacourr, Micheal 2007)

W There are some problems also attach with these home loans such as time i.e. Iilling oI application
oI loan to closing ,people have their own speciIied needs Irom these home loans which are not
IulIilling. (Lacour Micheal 2006).

Now after this conclusion the details of reviews are below-


Berstain David (2009) examined in his study taken Irom 2001 to 2008 that in this period there is increase
use oI home loans as compared to private mortgage insurance (PMI).he have divided his study into Iour
sections.
Section 1 describes why people are going more Ior home loans than PMI. the main reason Ior this that
now home loans market provide Piggybank loans Ior those people who don`t have 20 oI down payment.

Section 2 tells the Iactors responsible Ior the growth oI home loans and the risks on shiIting toward home
equity market without any PMI coverage. PMI can protect lenders Irom most losses up to 80 oI LTV
and the absence oI PMI will result in considerable losses in an environment.

Section 3 tells the measures in changes oI type oI loans. For this he have taken the data Irom the 2001 and
2007 AHS a joint project by HUD and Census The results oI this analysis presented in Table One reveal a
sharp increase in the Prevalence oI owner-occupied properties with multiple mortgages among properties
with Newly originated Iirst mortgages.
Section 4 describe the Financial status oI single-lien and multiple-lien households and Ior this he have
taken the survey oI consumer Iinance and show that Iinancial position is more weaker in multiple loans
than the single loans.

'andell, Kerry D (2008) analysis the sharp rises and then suddenly drop down home prices Irom the
period 1998- 2008. changes in prices are Ior the reasons as such economic Iundamentals , the problem
was not sub prime lending per se, but the Feds dramatic reductions, then increases in interest rates during
the early- mid-2000 , the housing boom was concentrated in those markets with signiIicant supply-side
restrictions, which tend to be more price-volatile; he problem was not in the excess supply oI credit in
aggregate, or the increase in sub prime per se, but rather in the increased or reduced presence oI certain
other mortgage products.

La courr, Micheal (2007) analysis in his study the Iactors aIIected the increase in the level oI Annual
percentages rates (APR) spread reporting during 2005 over 2004. The three main Iactors are changes in
lender business practices; (2) changes in the risk proIile oI borrowers; and (3) changes in the yield curve
environment. The result show that aIter controlling Ior the mix oI loan types, credit risk Iactors, and the
yield curve, there was no statistically signiIicant increase in reportable volume Ior loans originated
directly by lenders during 2005, though indirect, wholesale originations did signiIicantly increase Finally,
given a model oI the Iactors aIIecting results Ior 2004-05, we predict that 2006 results will continue to
show an increase in the percentage oI loans that are higher priced when Iinal numbers are released in Sept
2007.

La cour Micheal (2006) examined the home purchase mortgage product preIerences oI LMI households.
Objectives oI his study to analysis the Iactors that determined Iactors their choice oI mortgage product , is
diIIerent income groups have some speciIied need to met particular product. The role pricing and product
substitution play in this segment oI the market and do results vary when loans are originated through
mortgage brokers? For this they have use the regression analysis and the results are high interest risk
reduce loan value. SelI employed borrower chooses reduce documented loans than salaried workers. use
oI this product type seems to be more prevalent among borrowers with substantial Iunds Ior down
payment and better credit scores. In case oI pricing Multi Iamilies requires price premium and larger loans
carry lower rate. And the role oI time, particularly, the time required Ior the loan to proceed Irom
application to closing it is Iind that government lending taking the longest time and Nonprime loans the
shortest time.Multi Iamily properties take longer time in closing.

Dr. Rangarajan C. (2001) said that the Iinancial system oI India built a vast network oI Iinancial
institutions and markets over times and the sector is dominated by banking sector which accounts Ior
about two-third oI the assets oI organized Iinancial sector.


Haavio, Kauppi (2000) stated that countries where a large proportion oI the population lives in owner
occupied housing are experiencing higher unemployment rates. Than countries where the majority oI
people live in private rental housing, which might suggest that rental housing enhances labour mobility. In
this paper, they develop a simple inter temporal two region model that allow us to compare owner
occupied housing markets to rental markets and to analyze how these alternative arrangements allocate
people in space and time. announced that it will oIIer loans Ior Rs. 2-10 lakh at 12.5 percent the lowest
rate oIIered by any housing Iinance provider, big brother SBI has taken the rate war in the home loans
category to new heights. This is because, apart Irom the low rate, the interest on these loans is calculated
on principal, which is reduced every month unlike other housing Iinance companies which calculate
interest on annually reducing basis.















Chapter 2









Introduction to the company:

BeIore starting the introduction oI the company let us Iirst know what is a Home loan-
home loan is a amount which a person take Irom the banks or other Iinancial institute Ior the purpose oI
construct their own home or purchase constructed home.
Home is a dream oI a person that shows the quantity oI eIIorts, sacriIices luxuries and above all gathering
Iunds little by little to aIIord one`s dream.
Home is one oI the things that everyone one wants to own. Home is a shelter to person where he rests and
Ieels comIortable. Many banks providing home loans whether commercial banks or Iinancial institutions to
the people who want to have a home.
Now let we know about the HDFC LTD. Who is one oI the home loan provider in India. Housing
Development Finance Corporation Limited (HDFC Sales Ltd.) was established in 1977 with the primary
objective oI meeting a social need oI encouraging home ownership by providing long-term Iinance to
households. Over the last three decades, HDFC has turned the concept oI housing Iinance Ior the growing
middle class in India into a world-class enterprise with excellent reputation Ior proIessionalism, integrity
and impeccable service.
A pioneer and leader in housing Iinance in India, since inception, HDFC has assisted more than 3.5 million
Iamilies to own a home oI their own, through cumulative housing loan approvals oI over Rs. 2.98 trillion
and disbursements oI over Rs. 2.42 trillion as at March 31, 2010.
HDFC has a wide network oI 283 oIIices catering to over 2,400 towns & cities spread across the country. It
also has oIIices in Dubai, London and Singapore and service associates in the Middle East region, to
provide housing loans and property advisory services to Non-Resident Indians (NRIs) and Persons oI
Indian Origin (PIOs).
HDFC's unrelenting Iocus on Corporate Governance, high standards oI ethics and clarity oI vision,
percolate through the organization. Trust, Integrity, Transparency and ProIessional Service are the
important pillars oI the brand HDFC and most importantly, people - both employees and customers - are its
brand ambassadors.
Customer satisIaction is the hallmark oI all HDFC oIIerings. The Iirst touch oI HDFC's personalized
service begins as soon as a customer approaches HDFC, and over time it progresses into a long and
meaningIul relationship. State-oI-the-art inIormation systems supported by strong in-house training
programmes conducted at its specialized training centre in Lonavla, have equipped HDFC to respond
swiItly to the ever-changing customer needs and thereby empower customers in making the right home
buying decision. This is what sets apart HDFC's customer service philosophy - 'With You, Right Through'.
HDFC also has a robust deposits mobilization programme. HDFC has been able to mobilize deposits Irom
over 10 lac depositors. Outstanding deposits grew Irom Rs. 1,458 crores in March 1994 to Rs 23,081 crores
in March 2010. In addition, HDFC has received 'AAA' rating Ior its Deposit products Ior highest saIety
Irom both CRISIL and ICRA Ior sixteen consecutive years.

Today, HDFC is recognised as one oI the Best Managed Companies in India and is a model housing
Iinance company Ior developing countries with nascent housing Iinance markets. HDFC has undertaken
several consultancy assignments in various countries across sia, frica and East Europe to support and
establish their housing Iinance institutions.


SNAPSHOT

O Incorporated in 1977 as the Iirst specialized Mortgage Company in India.

O Almost 90 oI initial shareholding in the hands oI domestic institutes and retail investors. Current
77 oI shares held by Ioreign institutional investors.

O Besides the core business oI mortgage HDFC has evolved into a Iinancial conglomerate with
holdings In:




Mission

The primary objective oI HDFC is to enhance residential housing stock in the country through the
provision oI housing Iinance in a systematic and proIessional manner, and to promote home ownership.
Another objective is to increase the Ilow oI resources to the housing sector by integrating the housing
Iinance sector with the overall domestic Iinancial markets.. Special Notes - Company Type Indian
Multi National Industry Sector Financial Services Products / Services



'ision -

The main vision oI HDFC ltd To enhance residential housing stock and promote home ownership. Their
oIIerings range Irom hassle-Iree home loans and deposit products, to property related services and a
training Iacility. They also oIIer specialized Iinancial services to the customer base through partnerships
with some oI the best Iinancial institutions worldwide.


Associates and Subsidiaries of HDFC Ltd



















HDFC Standard LiIe insurance Company- HDFC holds 72.26 .
HDFC Asset Management Company HDFC holds 60
HDFC Bank- HDFC holds 23.26.
Intelenet Global (Business Process Outsourcing) HDFC holds 50.
HDFC Chubb General Insurance Company HDFC holds 74.









HDFC
LTD
72.26
HDFC
STANDARD
60
HDFC
ASSET
23.26
HDFC
BANK (inclusive of
warrants)
Types of Products offered

HDFC provide loans to meet all your requirements Ior you to make that house a home.

O Home Improvement Loan

O Home Extension Loan

O Loans to professionals for office or clinic.

O Home Equity Loans (Loan Against Property)

O Loan against Rent receivables

O Short Term Bridging Loan.

O Loans to professionals for non-residential premises loan

1. DISBURSEMENT OF HOME LOANS :-
HDFC Sales has its own procedure to disburse the loan amount among customers. AIter choosing your
right home, the next step is disbursement oI home loans. The loan amount is disbursed aIter identiIying
and selecting the property or home that are purchased and submit the requisite legal documents. In the
disbursement oI home loans a clear title and Iull veriIication to ensure that a person has Iull rights on his
house. The 230A clearance oI seller and /or 371 clearances Irom the appropriate authority oI income tax is
also needed.

(I) Eligibility criteria:-
However, iI one is a resident or non-resident individual who is planning to buy a house in India, one can
apply Ior a home loan. II a person has decided to buy a property in the near Iuture, he/she can apply Ior a
loan beIore even selecting the property. Once the maximum amount to put into the property has been
decided, the Housing Finance Institutions or Banks will let the customer know that how much he/she is
eligible Ior and this helps to plan out the budget.



(ii) Conditions regarding co-applicants: -
Housing Development Finance Corporation (HDFC) lay down conditions on who can be co-applicants.
All co-owners to the property need to be co-applicants to the loan necessarily. Institution does not permit
minors to join in as either co owner or as co-applicants because a minor is not eligible to enter into a
contact as per law. They do not permit even Iriends or relatives who are not blood relatives to take a
property jointly. However, Income oI co-applicants can be clubbed together to get higher loan eligibility.
Given below is a Table that throws light on acceptable relationship oI a co-applicant Ior clubbing oI
income.
Income Clubbing of Co-applicants:- It is as Iollows:-
Combination Income Clubbing: -
Husband-Wife: - Income oI husband-wiIe can be clubbed.

Parent - son: - It can be clubbed iI only son is there but not iI any male sibling exists.

Brother-Brother: - II they are currently staying together and intend to stay together in the new
property, then only, their income-can be clubbed Ior above purposes.

Brother-Sister: - No clubbing-is possible.

Sister-Sister: - No clubbing is possible.

Parent-Minor- Child: - No clubbing is possible in this case also.

(iii) General Terms and Conditions: -
The Iollowing are the terms and conditions applicable to the basic home loan product only. These are
likely to change on the basis oI the variations oI the home loan product. Typically, in general home loans,
the Iollowing conditions are applicable:-

1) The loan to value ratio (LTV) cannot exceed a particular percentage. This diIIers Irom product to
product and Irom one Housing Finance Institutional Bank (HFI/B) to another. The components oI the
value oI the Property calculated here are covered under cost oI property.

2) The maximum tenure oI the bank is nominally Iixed by HFI/Bs. However, HFls/Bs do provide Ior
diIIerent tenures with diIIerent terms and conditions.

3) The installment that one pay is normally restricted to about-50-per cent oI the monthly-gross income
oI the candidate.
4) The total monthly outIlow towards all the loans that have been availed oI, including the current loan is
normally restricted to 50 oI the gross monthly income.
5) One will be eligible Ior a loan amount which is the lowest as per one's eligibility. This is calculated as
per the LTV norms, the HR, norms and the FOIR norms as mentioned above.
6) Most HFls/Bs consider the proIile beIore they judge the repayment capacity. The judgement is based
on age, qualiIications, number oI dependents, employment details, employer credentials, work experience,
previous track record oI repayment oI any loans that have been availed oI, occupation, the industry to
which the candidate's business relates to, iI he/she is selI-employed, then the turnover in the last 3-4 years
etc.
7) Some HFIs/Bs insists on guarantees Irom other individuals Ior the repayment oI the loan. In such cases,
the customers has to arrange Ior the personal guarantee beIore the disbursement oI the loan takes place.
8) The property should be technically clear beIore the HFIs/Bs disburses the loans amount. Most oI
institutions and banks have a teams oI technical experts who visit the site to get a technical report beIore
the disbursement oI loan. This is also beneIicial to the customer as they check Ior the technical quality
and compliance with local laws.
9) The property should be legally clear beIore one can avail oI a disbursement oI the loan amount.
Housing-Finance Institutions /Banks (HFIs/Bs) take legal clearance Irom their lawyers beIore the
disbursement oI amount. This proves to be beneIicial to the customers as a legal expert checks his/her
documentation to ensure that he/she get a proper title to the property.
10) The disbursement oI the loan is as per the progress oI construction oI the property unless it is a ready
property in which case the disbursement will be by one single cheque. PEMI or simple interest on the loan
amount disbursed to the customer in case oI a part disbursement will be payable by the customer on the
disbursement.

11) The disbursement in most cases will be Iavoring the builder or the seller or the society or the
development authority as the case may be. The disbursement will come in the customer's Iavour under
special circumstances only.
12) The repayment oI loan can be made either through deduction against salary, post-dated cheques,
standing instructions or Auto debit instructions to bank.
13) The principle is amortized either on annual reducing or monthly reducing basis as the case may be.
The above terms and conditions are generally true Ior most Housing Iinance Institutions/Banks with
respect to the general Home Loans. However, the speciIic terms and conditions vary with respect to
special Housing Finance Institutions or Banks.

(iv) Charges applicable to home loans at HDFC Ltd.:-
The diIIerent kinds oI charges applicable to home loans are discussed below:
a) Processing fees :-
First oI all, comes the process Iee. This is a charge that is levied by HDFC Sales. This has to be paid at
the time oI submission oI the application Iorm. It's normally charged as a percentage oI the loan amount
sanctioned. In some cases HDFC charge a Ilat Iee based on the loan amount instead oI a percentage.

b) Administrative fees:-
This charge is again, normally, a percentage oI the loan amount sanctioned. It is collected by the HDFC
Ior the maintenance oI customer's records, issuing interest certiIicates, legal charges, technical charges,
etc. though the tenure oI the loan. It is payable by the customer when he/she accepts the oIIer letter given
by the HDFC. This payment has to be made beIore the availment oI the disbursement. The mode oI
collection oI these Iees varies Irom one HFI/B to another.

c) Rate of interest:-
This is the rate oI interest applicable on the loan amount through the tenure oI the loan. It is charged on
the principal monthly reducing method. HDFC Sales also give an option to select either a Iixed rate oI
interest or a variable rate oI interest.
d) Legal Charges:-
These are the charges occurred when HDFC incur on getting the property documents vetted by their panel
oI lawyers.



e) Technical Charges:-
These charges are also levied by HDFC to meet their expenses on the technical site visits to the
customer's property. This ensures quality oI construction and construction within the norms as stipulated
by the respective approval authority.

f) Stamp duty and registration charges:-
HDFC that go in Ior a registered mortgage pass these charges on to the customer. These are rather heavy
in certain states depending on the laws laid down by the state where one buy a property.

g) Personal Guarantee from Charges:-
Since the personal guarantee provided by the customer need to be stamped, these charges are also
recovered Irom the customer. They are charged to him by HDFC who demand Ior Guarantees.

h) Cheque Bounce Charges:-
In case the cheques through which one make a payment to HDFC get dishonored, some minimum charges
are levied by the HDFC. The same are recovered Irom the customer.

(i) Delayed payment charges:-
HDFC charge delayed payment charges Irom the customer iI he/she delays the payment oI installments
beyond the due date.

(j) Additional charges:-
These are levied as a percentage on the delayed payment charges by HDFC. They are levied iI one Iail to
pay the dues within the stipulated time aIter a delay has taken place.
(k) Incidental charge:-
This is payable in case the HDFC sends a representative Irom their organization to collect their
outstanding dues. It is normally charged at a Ilat rate per visit.

l) Prepayment Charges:-
This is a penalty charged by HDFC Irom when one makes either a part prepayment or a Iull repayment oI
the loan. This charge is levied only on lump sum payments and not on the EMls that one pays. This
charge is levied on the amount prepaid by one and not on the entire outstanding principal. These charges
are gradually being discount. So, these are the charges levied by most Housing Finance Institutions and
Banks while granting home loan to the customers. Now, the decision on the repayment capacity shall be
talked about as Iollows.

(v) 1udgments regarding repayment capacity on the basis of income:-
To understand how the income oI a customer is considered to arrive at his repayment capacity, it is Iirst
necessary to classiIy customers into salaried and selI employed individuals.
a) The income oI the salaried individual is considered in the Iollowing manner:-
Gross monthly income as it appears on the salary slip
Less:- Any non regular variable income appearing on the salary slip (including overtime, etc.)
Add : - 50 per cent oI the average variable income oI the last six months.
Add: - Any Iixed cash/voucher payments Ior which prooI can be submitted.
Add: - 50 per cent oI the average variable cash/voucher payments with prooI like traveling
reimbursement etc.
Add :- HRA receivable iI not being received already in the salary slip.

The above income calculated Ior the calculation oI eligibility using IIR and FOIR norms. For calculation
oI FOIR, the installments oI all the loans that one has availed oI currently Ior which repayment is being
made is taken into account as well. The lower oI the two eligibilities is considered as the maximum
repayment capacity.

b) To consider income oI SelI-employed individuals we Iurther classiIy them into ProIessionals and non-
proIessionals.

O Professionals:- in this category Comprising doctors, chartered accountants, lawyers, architects, etc.
For calculation oI eligibility oI proIessional's income is computed by most HFIs using the gross
proIessional receipts instead oI the Net proIit as in the case oI selI-employed non-proIessionals.

O Non-Professionals: - The income oI non-proIessionals is normally calculated by HFIs in the Iollowing
manner: -

Average oI the net proIits oI last 2 years as it appears in the proIit and loss account (Returns need to be
Iiled Ior the same. They should be Iiled regularly beIore the due date is over).
Less: - Any income, which is unusual and non-recurring in nature like sale oI some asset, etc which
aIIects proIits substantially,
Add: - Any expense that is unusual and non-recurring in nature like repairs and maintenance that has not
been capitalized and eIIect proIit adversely.
Add: - 50 per cent oI the average depreciation oI the last two years. The above income is calculated Ior
the calculation oI eligibility using IIR and FOIR norms.
For calculation oI FOIR the installments oI all the loans that one has availed oI currently Ior which
repayment is being made is taken into account and the eligibility is worked out. The lower oI the two
eligibilities is considered as the maximum repayment capacity.

(vi) Documents required for home loan at HDFC sales:-
For picking a general home loan an individual need to submit the Iollowing list oI document to HDFC
sales based on one's employer, qualiIications experience etc. The general requirements are as Iollows: -

(a) Income Documents: -
For salaried slips Ior the last three months appointments letter-salary certiIicate-retainer ship agreement,
iI appointed as a consultant-Form 16 issued by the employer in customer's name income document Ior
selI employee - last three years proIit and loss account statement duly attested by Chartered Accountants.
Last three years Balance Sheets duly attested by Chartered Accountant, last three years Income Tax
Returns with computation chart duly Iiled and certiIied by the Income Tax authorities.
b) Proof of employment: -
IdentiIy card issued by the employer- Visiting card.
(c) Employer's details (In case of private limited companies) : -
ProIile oI employer on employers letterhead (to be signed by a senior person in the organization)
comprising
Name oI promoter/directors
Background oI promoters/directors
Nature oI business activity oI your employer
Number oI employees
List oI branches/Iactories
List oI suppliers
List oI clients/customers
Turnover oI employer
Annual reports oI the employer Ior the last two to three years.

(d) Proof of age (Anyone of the following) : -
Passport, Voter's ID card, PAN card, Ration card, Employer's identity card, School leaving certiIicate,
Birth certiIicate
(e) Proof of residence (Anyone of the following) : -
Ration card-Passport- PAN card-Rent agreement, iI the customer is staying currently on rent- Bank Pass
book-Allotment letter Irom the company iI he/she is residing in company quarters.
(f) Proof of name change (If applicable) : -
A copy oI the oIIicial gazette, a copy oI a newspaper advertisement publicizing the name change,
Marriage certiIicates.
(g) Proof if investment (If required) :-
Bank statement Ior the last six months oI all operating and salary accounts - Bank statements Ior the last
six months oI all current accounts, iI selI-employed-any other photocopies oI investments held, iI required
by the HFC.

(vii) Legal documentation:-
Legal Documentation the typical legal documents that need to be submitted to the HFC arc discussed
here. Given below is a list oI legal property documents that need to be submitted to the HFC Ior mortgage
oI the property. The name and the list oI documents vary Irom state to state and also depend on the type oI
property being Iinanced. A broad outline oI the documents required is given below.
a) Acceptance copy oI the oIIer letter issued by the HDFC Sales.
b) Title documents oI the property that include -sale agreement duly
Registered-Own contribution receipts - Allotment letter-Registration receipt-Land documents indicating
ownership, iI applicable- Possession letter-Lease agreement, iI applicable (Property bought Irom a
development authority) - Mortgage deed iI the HDFC opts Ior a registered mortgage.
c) No Objection CertiIicate (NOC) Irom the developer, society or development authority as applicable.
d) Personal Guarantees, iI applicable.
e) In case oI alternator additional security, documents Ior the same depending upon the security details.
f) Post dated cheques Ior the EMls.
The above documents are only indicative in nature and do not cover the entire list. It may, also be noted
that in a resale case, the previous chain oI agreement also need to be taken.

(viii) The tax benefits that are applicable to housing loans for individuals:-
Currently Tax BeneIits to individuals are available only Ior the Home Loans and Home Extension Loans
products. The beneIits available are covered under these sections.







DISTRIBUTION NETWORK: -
HDFC`s distribution network spans 254 outlets that include 54 oIIices oI HDFC`s distribution company,
HDFC Sales Private Limited (HSPL). In addition, HDFC covers over 90 locations through its outreach
programmes. Distribution channels Iorm an integral part oI the distribution network with home loans
being distributed through HSPL, HDFC Bank Limited and other third party direct selling associates.
To cater to non-resident Indians, HDFC has oIIices in London and Dubai and service associates in Kuwait, Oman,
Qatar, Sharjah, Abu Dhabi and Al Khobar, Jeddah and Riyadh in Saudi Arabia.



AWARDS & ACCOLADES:-

O Goldman Sachs has listed HDFC as one among top 7 Iinancial services organization in 2008.
O HDFC ranked among the top 3 Best Managed Companies in India by Finance Asia in 2007
O Selected as the best Indian company in the FIs / NBFCs / Financial Services sector at the Dun &
Bradstreet American Express Corporate Awards 2006 and 2007.
O Best Investment Management Company in India by EUROMONEY 2007
O HDFC was awarded a rating oI 4 out oI 5 in Karmayog's Corporate Social Responsibility
Ratings` in 2007.
O HDFC is Ieatured in the Limca Book oI Records 2006, Ior the landmark achievement oI Rs. One
trillion in home loan approvals
O HDFC was awarded the Gold Shield in the Finance Sector by ICAI Ior excellence in Financial
Reporting in 2005. This is the 14th time HDFC has been selected Ior this award.
O HDFC has been awarded the 'Business Super brand' status.
O HDFC has been awarded the 'Best Home Financier' title by Outlook Money 2005
O Economic Times Corporate Citizen oI the Year Award - November 2004.



Departmental detail of HDFC Sales Indore

HDFC sales have mainly 7 departments in their oIIice Ior home loan work. This department has their own
and separate work. But the objective oI the all department is only one which is approving home loan.
Only one man can`t do all the work which happened between the customer searches to disbursement oI
home loan so that the work is divided into these departments.
Department details are as Iollowing

1) Sales department

2) Credit department

3) Field investigation department

4) Technical department

5) Legal department

6) Recovery/ account department

7) Marketing department

8) Administrative department



FUTURE: -

HDFC has always been market-oriented and dynamic with respect to resource mobilisation as well as its
lending programme. This renders it more than capable to meet the new challenges that have emerged.
Over the years
HDFC has developed a vast client base oI borrowers, depositors, shareholders and agents, and it hopes to
capitalize on this loyal and satisIied client base Ior Iuture growth. Internal systems have been developed
to be robust and agile, to take into account changes in the volatile external environment. HDFC has
developed a network oI institutions through partnerships with some oI the best institutions in the world,
Ior providing specialized Iinancial services. Each institution is being Iine-tuned Ior a speciIic market,
while oIIering the entire HDFC customer base the highest standards oI quality in product design, Iacilities
and service.
















CHAPTER -3














Introduction:-
Research methodology is a way to systematically show the research problem. It may be understood as a
science oI studying how research is done scientiIically. It is necessary Ior the researcher to know not only
the research methods but also the methodology.
This Section includes the methodology which includes. The research design, objectives oI study, scope oI
study along with research methodology and limitations oI study etc.
In our summer internship we have Iind out many aspect oI home loan and other inIormation which are as
Iollowing-
O To know the Customers perceptions about home loans oI HDFC housing development Iinance
corporation LTD.
O To study the satisIaction level oI customers about home loans.
O To study the problems Iaced by customers in obtaining the home loans.
O To make comparative study oI disbursement oI home loans by commercial banks, the study shall be
conducted in the manner enumerated below-


Research Design:-
This project is based on exploratory study. It was an exploratory study when the customer satisIaction
level was studied to suggest new methods to improve the services oI HDFC LTD in providing home
loans.
Sources of Data:-
For IulIilling the inIormation need oI the study. The data is collected Irom primary as well as secondary
sources-
A - Primary Source:-
In my survey approach I had selected an Excel sheet method Ior taking a customer view because it is
Ieasible Irom the point oI view oI our subject & survey purpose. I conducted 60 sample oI survey in my
project and to judge the satisIaction level oI customers which took home loans and want to take home
loan, property available and rate oI property in diIIerent areas oI Indore.

W Sample size;-
For gathering the data 60 newly construct project and already constructed project taken in the survey
oI home loan. And 25 banks which provide home loans also include in survey.
B - Secondary Source:-
It was collected Irom internal sources. The secondary data was collected on the basis oI organizational
Iile, oIIicial records, Newspapers, preserved inIormation in the company`s database and website oI the
company.

Data Collection Instrument Development:-
In my survey and market research the mode oI collection oI data was based on Survey Method and Field
Activity. Primary data collection was based on personal interview and Excel sheet Iill. I have prepared the
Excel sheet according to the necessity oI the data to be collected.

Limitations of the Study:-
This study also includes some limitations which have been discussed as Iollows:-
i. To collect the data Irom various banks was quite diIIicult due to non- cooperation oI some banks
and developers oI the project. This proved to be major limitation oI the study.
ii. To access such a large number oI customers were diIIicult because oI non-cooperative attitude oI
respondents.
iii. There was limitation oI time to conduct such a big survey in limited available time.
iv. Ignorance and reluctant attitude oI customers was also a major limitation in this study.

Thus above all were the limitations in this research study. The maximum eIIorts were made to
overcome these limitations in the study.








Chapter 4




















Chapter -5










FINDINGS

In my internship at HDFC sales I have Ielt that the service and behavior oI the member oI the HDFC ltd is
good. Its customer and people in the city give positive Ieedback to HDFC sales. In my internship I have
Iound that-

1. HDFC LTD having good brand image in the minds oI customers.
2. Majority oI the people got loans Irom HDFC LTD only
3. Most oI the customers are not aware oI the products oI HDFC home loans
4. Some oI the customer`s Ielt that the interest rates are somewhat high.
5. Some oI the customer not having good Iaith on private banks like Standard chartered bank, HSBC
bank etc.
6. Most oI the people are directly go to HDFC to apply a home loan
7. Some oI the customer oI HDFC already beneIited through HDFC home loan products and services
8. Customer awareness is medium about HDFC products.
9. HDFC LTD providing good services to their customers.
10. Some oI the customer Ieel that the Iile processing time is very high.















Chapter 6


















These suggestions have been discussed as follows:-

AIter completion my market research I came to know that There are some suggestions Ior HDFC sales to
increase their customer and Ior provide better service to its customer-
1) HDFC LTD provide loan according to the repaying capacity oI the customer and his/her
eligibility. Due to which, some customers are not able to get amount oI loan needed by them. So, the
HDFC LTD should soIten their norms regarding the loan amount.

2) To increase their customers, the HDFC LTD should provide specialized services in this sector.
These services can be such as proper guidance to the customer regarding the processing oI loans,
especially Ior the customers who are illiterate.

3) To satisIy their customers and Ior good dealings in Iuture, the HDFC LTD should make prompt
disbursement oI loan amount to the customers so that they can buy or construct their dream home as early
as possible.

4) The HDFC LTD should use easy procedure, or say, less lengthy procedure Ior the sanctioning
oI loan to the customer. There should be less number oI legal Iormalities, in case this exists, then, these
should be completed in less time. This will be helpIul in attracting more customers.

5) Although the interest rates on speciIic norms, yet customers seek less interest rate which can
lower their cost oI house. So banks should try to lower their interest rates. Needles to say, that the bank
which is having lower interest rates, have the maximum clients Ior loans.


6) Create awareness: The Company has to take care oI awareness creation about the products and
services among the customers.

7) Charges: The Company has to reduce the mortality and administration charges.

8) The company has to reduce their interest rates on home loan products and services.

9) The company has to identiIy the potential customers.
10) Company should consider the present competition and should act according to the customer
needs.

11) The HDFC LTD should try to provide proper knowledge regarding their home loan schemes,
even to people who don't know about such schemes and their beneIits especially in rural areas. So they
should provide knowledge to the ignorant customers, especially in rural areas and backward urban area
So, above are the main suggestions provided to the HDFC LTD. By considering these suggestions, the
HDFC LTD can strengthen their customer base in home loans sector. They should improve their services
and reduce legal proceedings and should be Iriendly to their customers. All this will be helpIul to satisIy
their customers.



CONCLUSION


1) In my internship at HDFC sales I came to know that many people are interested to take a home
loan Irom HDFC LTD to construct their homes and to purchase constructed homes.
2) Home loans have long period when compare to other personal loans and other loans. So peoples
are conIused to take a home loan.
3) Even though the interest rates are high peoples are willing to take a loan Irom HDFC LTD due to
some reasons.
4) The loan sanction process is low when compare to other banks.
5) For disbursement process is also it will take low time when compare to other banks

Finally the whole market research was carried out in a systematic way to reach at exact results.
The whole research and Iindings were based on the objectives. However, the study had some limitations
also such as lack oI time, lack oI data, non-response, reluctant attitude and illiteracy oI respondents, which
posed problems in carrying out the research. But proper attention was made to Carry out research in
proper way and to make accurate conclusion Ior the HDFC LTD which may beneIicial Ior banks to
enhance their customer base.































WEB PAGES:-

http://www.hdIcindia.com/

www.hdIc.com

www.90acre.com

www.realstate.com

www.indorebazaar.com

www.justdial.com

www.apnapaisa.com

www.deal4loan.com

news.com

www.loansnews.inIo/Home-loan/hdIc-home-loans/

www.hdIcindia.com/loans/hm-loan-documents.asp

www.suncorp.com.au/suncorp/personal/homeloans/tips/Iaq.aspx

www.hdIcindia.com/loans/home-loan.asp


NEWS PAPERS
The Hindustan times
Business standard




























Dear Sir/ madam
I am Vijay Joshi doing PGDM Irom CHIMC College. I am preparing a project on A S1UDY OA HOME
LOAA A1 HDFC SALES IADORE. For this I have designed a Excel sheet to know your views and
property which is available Ior sale and the view about HDFC sales. Please Iill the given as per your
thinking and experiences with this. I will be thankIul to you Ior this.


Nam
e of
Proj
ect
Nam
e of
Buil
der
Cont
act
Pers
on
Cont
act
No.
Locat
ion
Proj
ect
size
Type
of
Proj
ect
Specifica
tion
Rate
Quot
ed
Comple
tion
Appro
val
Status
Competi
tion
Present