CHAPTER-3

Axis Bank Hoam Loan

Introduction: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 Loan

We 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.

Documents

Salaried

Application form with photograph duly

Yes
signed
Identity, residence and age proof
Yes
Last 6 months bank statements
Yes
Last 3 months Salary-slips
Yes
Processing fee cheque
Yes
Form 16 / Income Tax Returns
Yes
Proof of business existence
Business profile
Education qualification certificate and
proof of business existence
Last 3 years Income Tax Returns with
computation of Income
Last 3 years CA Certified / Audited
Balance Sheet and Profit & Loss

Self

Employed

Professional

Self Employed
Non
Professional

Yes

Yes

Yes
Yes
Yes
Yes
Yes

Yes
Yes
Yes
Yes
Yes
Yes

Yes

Yes

Yes

Yes

Yes

Yes

Account
Eligibility Criteria
A) Salaried Individuals
Individuals 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) Professionals

Professionals (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 Individuals

Any

individual

filing

income

tax

returns

can

apply

Applicants 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 Rates
Sr.

Loan amountBase

Type

No
1
Floating

Rate

Salaried Customer

(Rs.)
forAll
amounts
Top Up

Rate

+Effective Rate Of

Mark Up
loanBase Rate

0.10%
Base Rate

2.20%

Interest
9.95% p.a.
12.05% p.a.

Base Rate - 9.85%

NISHCHINT - NRI Home Loan with Fixed Rate of Interest
Type
Fixed Rate

Effective Rate Of Interest

11.75% p.a.

Processing Charges
Scheme

Power Home
Upto 1% of the loan amount subject to minimum

Loan Processing Charges

of Rs.10,000/-

Prepayment Charges for

Nil

Floating Rate
Prepayment Charges for

2% + Service tax as applicable

Fixed Rate
No Due Certificate
Solvency Certificate
Charges for Late Payment
of EMI

interest @24% per annum i.e. @ 2% per month on the

overdue installment/s

Charges
from

NA
NA
Rs 500 + taxes per cheque bounce and a penal

for

fixed

changing
to

floating

rates of interest
Charges for changing
from

floating

to

fixed

rates of interest
Charges for stamp duty
on equitable mortgage

2% of the outstanding amount

Min. Rs. 5000 or 0.5% of the outstanding

amount whichever is higher
Stamp duty on Equitable Mortgage charges, if
applicable to be paid by the customer separately

Other Charges
Sr.

Type

No
1
2
3
4

Repayment

Instruction/Instrument

Charges
Return

charges
Cheque/Instrument Swap charges
Duplicate Statement issuance charges
Duplicate Amortization schedule issuance
charges

Rs.500/- per instance

Rs.500/- per instance
Rs. 250/- per instance
Rs. 250/- per instance

5
6
7
8

Duplicate

Interest

Certifcate

(Provisional/Actual) issuance charges

Issuance charges for Photocopy of title
documents
Charges on customer initiated requests for
copies of documents
Credit report issuance charges

Rs. 250/- per instance

Rs.250/- per document set
Rs. 250 per document set
Rs.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 Application

You 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 Bank

After 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 Investigation
A 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 sanction

Once 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 documents

These 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 property

Along 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 Signing

After 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 Disbursal
After 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 Loan

Disadvantages 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 Loan

Actual Cost of Property

One 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 Component

One of the major disadvantages of Home Loan is loss of HRA component, 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 Literature

Before giving details regarding the research methodology used in the study, it
is 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 selected
research 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 in
the 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 banks
grew at a hefty growth rate of more than 100%. The factors that contributed to this
aggressive 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 Surat
city.
8) To conduct a Comparative study of the Bank of Baroda and the Surat Peoples
Co-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 and
Amount 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 and

Mode of Repayment.
5) There is no association between Reason for Selecting Bank and the Type of
Banks.
6) There is no association between Type of Banks (Nationalized or NonNationalized) to which respondents would like to switchover, if he is asked to
do 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 of
Banks.
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.