CHAPTER-3
Axis Bank Hoam LoanIntroduction:-Axis Bank offers affordable and
flexible housing loans that can turn your dream of owning a home
into reality.If rising real estate prices have pushed the house you
coveted beyond your budget, Axis Banks unmatched home loans will
put it within reach. The attractive interest rates and minimal
processing fees make our home finance products a first choice for
savvy buyers. In addition, features such as flexible tenures,
transparent processing and quick service have made our products
stand out among the best home loan in India.We have products to
suit every budget, taste and need. Whether you are self-employed or
salaried, want a floating or fixed rate, Axis Bank will offer a
loan that is just right for you.
Features & Benefits*: Loan for the purpose of Buying a home
or constructing your own house: Home Loans for purchasing a ready,
under construction or a resale property. We also extend loans if
you wish to purchase a plot and construct a house thereon or a loan
for constructing a house on a plot already owned by you. Loan
Tenure up to 30 years: giving you a higher eligibility. Loan amount
starting from Rs 1 lakh: Need a smaller loan for fulfilling your
dream? Apply for a Home loan with a minimum loan of Rs. 1 Lakh with
us. Loan amount up to 90% of the property value: For loans up to Rs
20 lakhs, you need to just pay 10% of the property value and we
shall fund the remaining 90%. Loans for home, big or small: A home
is never small. Get Home Loans for properties starting from 300
(saleable) sqft area. Attractive Interest Rates: We offer you Home
Loans at very attractive interest rates so that your Home Loan
doesnt feel like a burden. Minimum combined income of Rs 8000 p.m:
Now your spouse, parents and children can also contribute in
fulfilling your dream. You can apply for a loan if the combined
income is atleast Rs 8000 p.m./10000 p.m. depending upon your
location. Hassle free balance transfer facility: Tired of paying
high interest rate on your existing Home loan with another
financier? Transfer your Home Loan to us easily at an attractive
interest rate. Transferring an existing loan to us is even simpler
if you have a good repayment track record. Customised products:
giving you a better eligibility based on your banking behaviour.
Widespread: Choose from our large base of approved projects across
the country.
Home Loan First Step Towards Your Home LoanWe offer a host of
Home Loan options that can be tailor made to suite individual
needs. With advantages like simplified documentation, usage of
tablet and smartphones, getting a home loan sanctioned has become
very easy. Advantages Wide range of product to choose from Guidance
throughout the process, making home buying hassle free Doorstep
service at your comfort. Simplified documentation Sanction without
having selected a property Flexible repayment options Insurance
options for home loan at attractive premium
Documents required
Getting a home loan from a Bank is easy and quick. We keep the
paperwork and other formalities to a minimum. Proof of your
identity, address and income are some of the key documents that are
required to be submitted for a home loan.DocumentsSalariedSelf
Employed ProfessionalSelf Employed Non Professional
Application form with photograph duly signedYesYesYes
Identity, residence and age proofYesYesYes
Last 6 months bank statementsYesYesYes
Last 3 months Salary-slipsYesYesYes
Processing fee chequeYesYesYes
Form 16 / Income Tax ReturnsYesYesYes
Proof of business existence
Business profileYes
Education qualification certificate and proof of business
existenceYesYes
Last 3 years Income Tax Returns with computation of
IncomeYesYes
Last 3 years CA Certified / Audited Balance Sheet and Profit
& Loss AccountYesYes
Eligibility CriteriaA) Salaried IndividualsIndividuals in
permanent service in the Government or reputed companies meet our
Home Loan eligibility creteria Applicants should be above 24 years
of age at the time of loan commencement and up to the age of 60 or
superannuation, whichever is earlier at the time of loan
maturity.B) ProfessionalsProfessionals (ie, doctors, engineers,
dentists, architects, chartered accountants, cost accountants,
company secretary, management consultants only) can
apply.Applicants above 24 years of age at the time of loan
commencement and up to 65 years or less at the time of loan
maturity meet our housing loan criteria.
C) Self Employed IndividualsAny individual filing income tax
returns can applyApplicants should be above 24 years of age at the
time of loan commencement and up to 65 years or less at the time of
loan maturity
Interest Rates & Charges:-Interest Rates & Charges for
NRI HOME LOAN One of the most important factors that determine the
cost of your loan is the interest rate. The higher the home loan
interest rate, the larger the amount you will have to pay out every
month. Axis Bank offers some of the most attractive home loan
interest rates in India, helping you keep your EMI in check.
But interest rates often fluctuate, and higher housing loan
rates could affect your monthly budgets. Our floating rate loans
allow you to hedge the risk of rising home loan interest rates in
India. On the other hand, if you are confident that interest rates
will not rise, you could opt for a fixed rate loan that provides
you with the luxury of being locked into a rate for a period of
time. You then dont have to worry about your monthly budgets
getting messed up. Our Home Loan RatesSr. NoTypeLoan amount
(Rs.)Base Rate + Mark Up Effective Rate Of Interest
1Floating Rate for Salaried CustomerAll loan amounts Base Rate +
0.10%9.95% p.a.
Top UpBase Rate + 2.20%12.05% p.a.
Base Rate - 9.85%NISHCHINT - NRI Home Loan with Fixed Rate of
InterestTypeEffective Rate Of Interest
Fixed Rate11.75% p.a.
Processing ChargesSchemePower Home
Loan Processing Charges Upto 1% of the loan amount subject to
minimum of Rs.10,000/-
Prepayment Charges for Floating RateNil
Prepayment Charges for Fixed Rate2% + Service tax as
applicable
No Due CertificateNA
Solvency CertificateNA
Charges for Late Payment of EMI Rs 500 + taxes per cheque bounce
and a penal interest @24% per annum i.e. @ 2% per month on the
overdue installment/s
Charges for changing from fixed to floating rates of interest2%
of the outstanding amount
Charges for changing from floating to fixed rates of interest
Min. Rs. 5000 or 0.5% of the outstanding amount whichever is
higher
Charges for stamp duty on equitable mortgage Stamp duty on
Equitable Mortgage charges, if applicable to be paid by the
customer separately
Other ChargesSr. NoTypeCharges
1Repayment Instruction/Instrument Return chargesRs.500/- per
instance
2Cheque/Instrument Swap chargesRs.500/- per instance
3Duplicate Statement issuance chargesRs. 250/- per instance
4Duplicate Amortization schedule issuance chargesRs. 250/- per
instance
5Duplicate Interest Certifcate (Provisional/Actual) issuance
chargesRs. 250/- per instance
6Issuance charges for Photocopy of title documentsRs.250/- per
document set
7Charges on customer initiated requests for copies of
documentsRs. 250 per document set
8Credit report issuance chargesRs.50/- + Service Tax (As
applicable) per instance
Switching Cost:Switching from the Floating rate scheme to the
Fixed rate scheme and vice versa is permissible. If a fixed rate
customer wants to reschedule the loan to a lower interest rate, the
same is also permissible.
Procedures & Step:--1. Home loan ApplicationYou can avail
the application form from any bank office or download it from
online. Duly fill the form and attach copies of the loan related
documents such as ID proof, Address proof, Age proof, Income proof,
proof of educational details and employment, bank balance statement
etc., if you apply online, you can get instant provisional approval
within 24 hours.Send the form and the non refundable processing fee
to the bank for loan approval process. The processing fee differs
from one bank to another from 0.25% to 0.50% which is usually non
refundable in case if the loan is denied. This is used for the loan
processing procedure and maintenance of your loan.2. Discussion
with the BankAfter submission of application form, the applicant
will be called by the bank for a face to face discussion to
evaluate the papers and decide on the payment capacity and to
decide on the loan amount etc. This discussion meet happen in 2 or
3 days after the submission of application form. At this point, the
applicant can also bring the original documents of all the proofs
submitted earlier.3. Bank InvestigationA field investigation will
be conducted to check all the information stated in the application
form and qualified bank employee or a verification agent will
investigate and verify all the details. The representatives will
visit the office and residence of the applicant to verify the
details. In the process, the references mentioned by the applicant
will also be checked and cross verified.After this, the bank will
verify the applicants repayment capacity and if it is not
satisfactory, the loan will be rejected. It will check the ability
of the borrower to repay the loan amount with interest on time
along with the previous loan transactions track record. If the bank
finds that the applicant can repay, then the loan will be
sanctioned.4. Offer Letter for the loan sanctionOnce the loan is
sanctioned, the bank will send an offer letter to the applicant
with details regarding the home loan such as loan amount
sanctioned, interest rate for the loan, type of interest selected:
fixed or floating interest rates, loan tenure, mode of loan
repayment, special scheme or offer if applicable and the general
terms and conditions of the home loan approved.If you are satisfied
with all the norms, then you can provide an acceptance letter with
your signature to the bank to acknowledge the sanction.5.
Submission of legal documentsThese days, the bank requires all the
legal documents related to the property for availing the loan. The
bank will perform legal check and these documents will be detained
by the bank till the applicant repays the loan amount. 6. Technical
Valuation of propertyAlong with the legal check, the bank will also
perform a technical valuation of the property. For under
construction projects, the bank will check the quality and progress
of the construction work along with the locality valuation to
evaluate the value of the property. The bank has qualified
valuators to assess the property value under established
parameters. This is performed to ensure a clear title and if the
property is viable and meets the valuation standards.7.
Registration and SigningAfter all the financial and technical
valuations, the home loan registration process begins. The legal
loan documents will be prepared on stamp papers by the bank lawyer.
The loan agreement must be signed and submitted back to the bank
along with post dated cheques. 8. Loan DisbursalAfter registration,
the bank will disburse the loan amount based on the agreed terms of
disbursal either as a full payment or partial payment mode in
stages. Usually for ready possession of the property, the amount
will be disbursed in full.Advantage:-Home loans come with a dual
advantage, tax benefits and rent saving. Both these elements
contribute towards EMI outflow. Appreciation in the property value
is an additional bonus. We ensure that our customers get maximum
benefits through their home loans.Here is a list of benefits that
you can avail when you take an Indiabulls home loan: Approval of
loan even if property is yet to be selected Online access of Loan
account Funding available for NRI customers Facility for funding
for builders under construction and ready properties Experienced
staff to provide doorstep services Quick processing and disbursal
of loans
Disadvantages of Home LoanDisadvantages of Home Loan is quite
unusual topic for my blog. I personally feel that any financial
decision should not be biased and prejudice. We should look at both
the aspects before arriving at final decision. Based on rough
estimates, 80% residential real estate transactions in India are
executed by availing Home Loan. For majority of Indians real estate
affordability is major concern. At the same time there is no love
lost for Real Estate & Gold. Home Loan is blessing in disguise
for this section. Buying a property on Home Loan is a major
financial decision and each financial decision comes with own set
of advantages and disadvantages.Based on my experience, i would
like to add that this post 5 Disadvantages of Home Loan is 1st post
in India highlighting financial disadvantages of Home loan. I could
not find any other post on this subject. Many readers might not
agree with certain points but i believe in sharing honest and frank
opinion. Lets check 5 critical disadvantages of Home LoanActual
Cost of PropertyOne of my friend purchased a 3 BHK apartment in
year 2007 for 50 Lac. In 2012, he sold the same flat for 70 lac.
Sounds good & prime facie he made profit of 20 lac on his
investment. This is not the case as he paid approx 24 Lac interest
on Home Loan of 40 Lacs in 5 years. Now, next question coming to
your mind will be that he saved income tax also. We will address
this in next point but in real sense the actual cost of property is
74 Lacs i.e. 50 lac (Cost) + 24 Lac interest. Not withstanding
this, his principal liability at the time of sale was approx 20
Lacs. Reason for very high interest rate payout initially is that
principal component paid during initial loan years is minuscule
compared to interest in total EMI. Higher interest component offset
the property appreciation to large extent.Loss of HRA ComponentOne
of the major disadvantages of Home Loan is loss of HRAcomponent, if
property is self occupied. It is mainly applicable for people with
high salary. In lieu of HRA, you can claim maximum deduction of 1.5
lacs on Interest component. Doing reverse calculation, it comes out
to be monthly deduction/income tax saving of Rs 12500 in interest
component. Assuming, you are staying in Non-Metro city &
getting 40% of Basic Salary as HRA. If your basic salary per month
is less than or equal Rs 31250 than you will either gaining or at
no profit no loss by availing home loan in terms of Income Tax
Saving. In case your basic salary is more than Rs 31250 than you
will be definitely at loss as your HRA benefit would have been
higher compared to gain from deduction on Home Loan Interest paid.
Besides deduction on interest, not too many people get benefited
from deduction under section 80 C on principal repayment as 80 C
limit of 1 Lac is too less to accommodate EPF, insurance, school
fees, Principal Repayment of Home Loan .
Terms And Conditions:-Facility Tenure Overdraft facility is
granted for 12 months. This is reviewed and renewed at annual
rests.Penalty for early closure Nil.Other Conditions Bank reserves
the right to reject any application / renewal without assigning
reasons thereof. It shall be the sole right of the Bank to consider
the proposal on case to case basis after taking into consideration,
the credentials/credit worthiness of each of the customers No loan
under this scheme is granted for investment in capital market
instrument or for speculation purpose The overdraft facility shall
be disbursed / renewed only after all the required documentation
and pledge creation formalities are complete. The margin
requirement will be reviewed regularly. In event of any volatile
fluctuations in the prices of the units, the client shall make good
the shortfall, if any, within four days, failing which the security
will be enforced. The applicant will undertake to inform the Bank
as and when there is a change in address or employment
Conclusions- Flexible repayment options. Fast, Reliable Service.
Attractive deals from associated car dealers. Insurance cover for
Loan Liability available, repayable along with EMI. Zero
Pre-payment charges under MultiAdvantage Car Loans product.
Attractive rate of interest. Easy documentation.
CHAPTER No-4
Review of Literature
Section-A Review of LiteratureBefore giving details regarding
the research methodology used in the study, itis appropriate to
present a brief overview of the research articles, case studies,
and books written on this particular topic. The area of study may
be within the country or outside the country.Review of literature
helps a researcher to get acquainted with his/her selectedresearch
problem and also may provide some guidelines in selecting a proper
research methodology. It is also helpful in finding out the
research gaps in the existing literature. This will help the
researcher in fine-tuning his/her research problem and
methodology.Another advantage of reviewing in the existing
literature is that in cases where the research problems are
similar, the conclusions and findings may be easily compared. This
will help the researcher in determining whether his/her findings
are possible or not.The literature under review may be of two
types: (i) concerning the conceptual and theoretical framework.
(ii) the empirical literature dealing with the studies made inthe
past which are similar to the one that the researcher intended to
undertake.
A Paper entitled Retail Banking Emerging Issue in Home Loan by
Rao K. N.In this paper the authors revealed that during 2002-03
housing loans by banksgrew at a hefty growth rate of more than
100%. The factors that contributed to thisaggressive growth in the
portfolio of housing loans of banks and HFC are: Tax intensives on
repayment of principal and interest, rising income level of middle
class, falling interest rate, stable real estate prices, easy
availability of housing loans, low returns on the investment
opportunities available in the market. They also concluded that
although there is strong growth in housing loans by financial
situations in India, we are still behind the developed countries in
terms of housing loans to GDP ratio. In India it is around 2.5%
compared to 57% in the UK and 54% in the US. It shows that there is
a vast scope for housing loans in India. One economist has argued
that every rupee spent on the housing sector will increase the GDP
by more than 75 paise. It also creates a labour intensive. Despite
the immense growth in housing loans there are certain challenges
that the banks might face in the time to come, e.g. falling rate of
interest, rising mismatch in the assets and liabilities of the
bank, rising NPA in the housing loan portfolio, etc.
Objectives of the Study
Objectives of the study are as under:1) To study the concept of
Home Loan /Housing Finance in todays scenario.
2) To examine types of retail loan in India.
3) To study government policy regarding to the Housing Finance
in India.
4) To examine the procedure of Housing Loan.
5) To know the reasons for taking the home loan in Surat
city.
6) To study the customers` satisfaction levels towards banks in
Surat city.
7) To understand why customers preferred the BOB/SPB for home
loan in Suratcity.
8) To conduct a Comparative study of the Bank of Baroda and the
Surat PeoplesCo-op Bank Ltd in respect of the various aspects of
the home loans in Surat.
9) To understand about polices and practices of banks for home
loan.
Hypotheses
Some of the Hypotheses that are tested in this study are as
follows:1) There is no association between Age, Educational
Qualification, Profession,Yearly Income, Type of Banks and Various
Reasons for Home Loan.
2) There is no association between Age, Yearly Income, Type of
Banks andAmount of Loan Sanctioned.
3) There is no association between Utilization of Various types
of Bank Services,Age, Mode of Repayment and Type of Banks.4) There
is no association between Education, Profession of the Respondents
andMode of Repayment.
5) There is no association between Reason for Selecting Bank and
the Type ofBanks.
6) There is no association between Type of Banks (Nationalized
or Non-Nationalized) to which respondents would like to switchover,
if he is asked todo so and Type of Banks.
7) There is no association between Age, Educational
Qualification, Profession,Yearly Income of Respondents and the
Amount of Loan Applied for.
8) There is no association between the Age, Yearly Income,
Profession,Educational Qualification of Respondents and Sanctioned
Loan Amount.
9) There is no association between Days taken for Sanctioned
Loan and Type ofBanks.Limitations of the study This research study
was time bound and due to this only a few aspects of the problem
were taken up for study. This research study was taken in a limited
area only (i.e. Surat city) and findings may vary if the area of
study is changed. Some of the respondents might have been biased in
their responses and as such the analysis and conclusion based on it
could vary to some extent. Some of the conclusions also depend upon
secondary data. To the extent these data are reliable, the
conclusion derived from them are valid. This research study was
limited only to nationalized and co-operative banks due to
non-availability of data on private banks.
Terms And Conditions:-Facility Tenure Overdraft facility is
granted for 12 months. This is reviewed and renewed at annual
rests.Penalty for early closure Nil.Other Conditions Bank reserves
the right to reject any application / renewal without assigning
reasons thereof. It shall be the sole right of the Bank to consider
the proposal on case to case basis after taking into consideration,
the credentials/credit worthiness of each of the customers No loan
under this scheme is granted for investment in capital market
instrument or for speculation purpose The overdraft facility shall
be disbursed / renewed only after all the required documentation
and pledge creation formalities are complete. The margin
requirement will be reviewed regularly. In event of any volatile
fluctuations in the prices of the units, the client shall make good
the shortfall, if any, within four days, failing which the security
will be enforced. The applicant will undertake to inform the Bank
as and when there is a change in address or employment.
Conclusions- Flexible repayment options. Fast, Reliable Service.
Attractive deals from associated car dealers. Insurance cover for
Loan Liability available, repayable along with EMI. Zero
Pre-payment charges under MultiAdvantage Car Loans product.
Attractive rate of interest. Easy documentation.
