OBJECTIVE OF THE STUDY

The objective of this research is to analyse the home loans with a view to arrive at the
most popular loan schemes offered by the banks under study and to conclude from
the analysis the best possible schemes which would keep the bank ahead of
competition.

The purpose of the study is to find the critical factors that are essential for any
housing loan scheme and the most favored scheme in the Indian scenario. The
reasons being the features that the scheme provides are not being provided by many of
the housing finance companies.

RESEARCH METHODOLOGY
Research Methodology is an important part of every project. Because it help in knowing
how to select representative sample from the world or the general population, the right
research tools and techniques to complete the research.

To satisfy the customer the study of comsumer behavior is important because he is the
king. The Research Process is based on survey method, so in order to implement the
survey we go to Service Provider and the Services user which is the customers.

The research involves the following steps :-

 Define the problem & research objective - The problem and objective is to assess the
services offered by various service provider and what the consumer wants.

 Developing the research Plan - The second stage of research methodology is to develop
a research plan.The research plan desigined to take decesion on the data soruces,
research approaches, research, instruments, sampling plan and contact methods.
 Survey Research – It was a descriptive research.

 Research Instrument – The use of an effective research instrument is very important.

Because through this instrument we collect data. In this project through observations &
personal interviews were conducted.

♦ Personal Interview – As we were doing direct selling. we interacted with my customers

are asked about there views in selecting a service and what are there wants and
expectations from a service provider

 Sampling Plan - After finalizing the research approch and instruments a sampling
must be designed.
♦ Sampling Unit –data have been collected from banks

♦ Sample size – It has been collected from four banks.

• Sampling Procedure :- What process should be used to collect the sample. So,
representation samples, convenience sampling is used.

 Collect the Information :-After completing all the steps, the data are collected from
different sources.

Analyze the Information:-After the data is collected they are analyzed to Know the
findings. The data is then tabulated to develop frequency distribution.

♦Present the findings:-As the last step, the findings are presented that are relevant
to the major marketing decisions.

HOME LOANS

Interest Rates for various loan amount

Interest
Bank name Action
Type upto 5 5-20 20-30 30-50 50-75 >75
lakh lakh lakh lakh lakh lakh

ICICI Bank Floating 8.75 8.75 8.75 9.0 9.5 9.5

ICICI Bank Fixed 16.0 16.0 16.0 16.0 16.0 16.0

ICICI Bank - Special

Floating 8.25 8.25 8.25 8.25 8.25 8.25
Scheme

HDFC - Special Scheme Floating 8.25 8.25 8.25 8.25 8.25 8.25

HDFC Fixed 14.25 14.25 14.25 14.25 14.25 14.25

SBI Advantage Home Loan Fixed NA NA NA NA 8.0 8.0

SBI - Home Loan Fixed 8.0 8.0 8.0 8.0 NA NA

SBI - Home Loan Floating 8.0 8.0 8.0 8.0 NA NA

SBI Advantage Home Loan Floating NA NA NA NA 8.0 8.0

EMI

EMI (per mth) for various term based on initial

Interest interest rates
Bank name Action
Type
5 Yrs 10 Yrs 15 Yrs 20 Yrs 25 Yrs
 *IC
ICI
Ba
nk
off
ers
8.2
ICICI Bank Floating 41,274 25,065 19,989 17,674 NA
5%
ICICI Bank
fixe Fixed 48,636 33,503 29,374 27,825 NA
d
ICICI Bank - Special
Floating 40,793 24,531 19,403 17,041 NA
till
Scheme
31s
HDFC - Special
Floating 40,793 24,531 19,403 17,041 NA
tScheme
Mar
HDFC Fixed 46,796 31,355 26,972 25,234 NA
ch
SBI - Home Loan
20 Fixed 40,553 24,266 19,113 16,729 NA
*
11,
SBI
SBI - Home Loan Floating 40,553 24,266 19,113 16,729 NA
9.2
Pre
off
5%
-fixe
ers
pay
8%
d
me
fixe
till
• nt
d
31s
cha
for
t Top of Form
rge
1st
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s:
yr, Top of Form
ch
The
9%
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re
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is
d
the
no
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cha
2-3
fter
COMPARISION
rge
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Pre
1.5
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SBI BANK HOME LOAN

Effectiv
e Rate
Calcula
tion
Interest Rate
Interest Rate for Interest Rate for Average Interest for
for
Year 1 Year 2-3 15 years
Year 4-20

8% 9% 11% 9.97%

Inter
Interest EMI Princip Outstanding
est
Years Rate (Rs. Per al Paid Principal
Paid
(% p.a.) Month) (Rs.) (Rs.)
(Rs.)
1,57,3
1 8 19,113 71,956 19,28,043
99
1,70,5
2 9 20,224 72,089 18,55,953
98
1,63,8
3 9 20,224 78,851 17,77,102
35
1,91,7
4 11 22,277 75,577 17,01,524
46
1,83,0
5 11 22,277 84,323 16,17,201
00
1,73,2
6 11 22,277 94,080 15,23,120
42
1,04,96 1,62,3
7 11 22,277 14,18,153
7 55
1,17,11 1,50,2
8 11 22,277 13,01,038
4 09
1,30,66 1,36,6
9 11 22,277 11,70,372
6 56
1,45,78 1,21,5
10 11 22,277 10,24,584
7 36
1,62,65 1,04,6
11 11 22,277 8,61,927
7 65
1,81,48 85,84
12 11 22,277 6,80,446
0 3
2,02,48 64,84
13 11 22,277 4,77,965
0 2
2,25,91 41,41
14 11 22,277 2,52,054
1 1
2,52,05 15,26
15 11 22,277 0
4 9

EMI Breakup for 8.0%

Amount Payable 100%
 58% 42%
(Principal Component) (Interest Component)

Principal Amount (Rs.) Interest Amount (Rs.) Total Amount Payable

20,00,000 + 14,40,348 = 34,40,348

ICICI BANK HOME LOAN

Effective
Rate
Calculation
Average Interest
Interest Rate for Interest Rate for Interest Rate for
for
Year 1-1 Year 2-2 Year 3-20
15 years

8.25% 9.25% 9% 8.92%

Principal Interest Outstanding

Interest Rate EMI
Years Paid Paid Principal
(% p.a.) (Rs. Per Month)
(Rs.) (Rs.) (Rs.)

1 8.25 19,403 70,458 1,62,375 19,29,541

2 9.25 20,523 70,738 1,75,533 18,58,803

3 9 20,255 78,972 1,64,087 17,79,830

4 9 20,255 86,381 1,56,679 16,93,449

5 9 20,255 94,484 1,48,576 15,98,965

6 9 20,255 1,03,347 1,39,712 14,95,618

7 9 20,255 1,13,042 1,30,018 13,82,575

8 9 20,255 1,23,646 1,19,413 12,58,929

9 9 20,255 1,35,245 1,07,815 11,23,684

10 9 20,255 1,47,932 95,128 9,75,752

11 9 20,255 1,61,809 81,251 8,13,943

12 9 20,255 1,76,987 66,072 6,36,955

13 9 20,255 1,93,590 49,469 4,43,365

14 9 20,255 2,11,750 31,309 2,31,614

15 9 20,255 2,31,614 11,445 0

 EMI Breakup for 8.25%
Amount Payable 100%

57% 43%
(Principal Component) (Interest Component)

Principal Amount (Rs.) Interest Amount (Rs.) Total Amount Payable

20,00,000 + 14,92,505 = 34,92,505

HDFC HOME LOAN

Effectiv
e Rate
Calcula
tion
Interest Rate for Average Interest for
Year 1-15 15 years

14.25% 14.25%

Interest Outstanding
Interest Rate EMI Principal Paid
Years Paid Principal
(% p.a.) (Rs. Per Month) (Rs.)
(Rs.) (Rs.)

1 14.25 26,972 41,286 2,82,372 19,58,713

2 14.25 26,972 47,569 2,76,089 19,11,143

3 14.25 26,972 54,809 2,68,849 18,56,333

4 14.25 26,972 63,150 2,60,508 17,93,183

5 14.25 26,972 72,761 2,50,897 17,20,422

6 14.25 26,972 83,834 2,39,824 16,36,587

7 14.25 26,972 96,592 2,27,066 15,39,994

8 14.25 26,972 1,11,292 2,12,366 14,28,702

9 14.25 26,972 1,28,229 1,95,429 13,00,472

10 14.25 26,972 1,47,744 1,75,914 11,52,727

11 14.25 26,972 1,70,229 1,53,429 9,82,498

12 14.25 26,972 1,96,135 1,27,523 7,86,362

13 14.25 26,972 2,25,984 97,674 5,60,377

14 14.25 26,972 2,60,376 63,282 3,00,001

15 14.25 26,972 3,00,001 23,657 0

 EMI Breakup for 14.25%
Amount Payable 100%

41% 59%
(Principal Component) (Interest Component)

Principal Amount (Rs.) Interest Amount (Rs.) Total Amount Payable

20,00,000 + 28,54,887 = 48,54,887

Therefore,SBI is the best as the total amount payable is 34,40,348 where as ICICI
bank has to be repaid 34,92,505 and HDFC bank has to be repaid 48,54,887.