Final Project Report

BBA – Ist Year

“A STUDY ON CONSUMER PERCEPTION

TOWARDS CONSUMER LOAN”

Submitted under the supervision of : Approved by :

Pooja Kaur Mam Ashutosh Dubey Sir
( Assistant Professor ) ( HOD )

Submitted by :
Ishjot Singh Bhatia
Jaya Chandwan
Khushi Gangwan
Karun Tamrakar

Department of Management
Shri Rama Krishna College of Commerce & Science
SATNA , ( M.P.)

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 Declaration of originality

We hereby declare that this project is entirely our own work and that any additional
source of information have been duly cited.

We hereby declare that any internet sources , published or unpublished work from
which have quoted or drawn reference have been reference fully in the text and in
the contents list. I understand failure to do this will result in a failure of this project
due to plagiarism.

We understand we may be call for a viva and if so must attend. We acknowledge

that this is our responsibility to check whether that we are required to attend that we
will be available during the viva period,

S.No Students Name Class Date Signature

1. Ishjot Singh Bhatia BBA Ist year 05/06/2023

2. Jaya Chandwani BBA Ist year 05/06/2023

3. Khushi Gangwani BBA Ist year 05/06/2023

4. Karun Tamrakar BBA Ist year 05/06/2023

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 Approval Letter from Supervisor

I ________________________ The undersigned hereby certifies that the aove

mentioned reports are the actual reports of the project work done by students under
my decision. This is submitted ______________________ to Shri Rama Krishna
College of Commerce & Science after my approval.

Date : 05/06/2023 Signature Supervisor

Location : Shri Rama Krishna College of

Commerce & Science , Satna , Madhya Pradesh

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 Certificate of Completion

This is to certify that the project report entitled CONSUMER PERCEPTION

TOWARDS CONSUMER LOAN which has been completed & submitted by Ishjot
Singh Bhatia , Jaya Chandwani , Khushi Gagwani , Karun Tamrakar in partial
fulfillment for the award of degree of Bachelor of Business Admiistration ( BBA )
in the Shri Rama Krishna College of Commerce & Science , Satna for the
session 2022 – 23 is a bonafide work by us and has been completed under my
guidance and supervision. It has not been submitted elsewhere for any other degree

Pooja Kaur Mam Ashutosh Dubey Sir

( Assistant Professor ) ( HOD )

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 Ackowledgement

We would like to express our special thanks of gratitude to our Head of Department
Ashutosh Dubey Sir ( HOD ) as well as our Principal Deepak Nema Sir who gave us
the opportunity to do this wonderful project on the topic “A STUDY ON
CONSUMER PERCEPTION TOWARDS CONSUMER LOAN” , which also helped
us in doing a lot of Research and we came to kow aout so many things.
We are really thankful to them.

Secondly we would also like to thank our teacher Pooja Kaur Mam who guided and
helped us a lot in finishing this project within the limited time.

S.No Students Name Class Date Signature

1. Ishjot Singh Bhatia BBA Ist year 05/06/2023

2. Jaya Chandwani BBA Ist year 05/06/2023

3. Khushi Gangwani BBA Ist year 05/06/2023

4. Karun Tamrakar BBA Ist year 05/06/2023

Date : 05/06/2023

Location : Shri Rama Krishna College of

Commerce & Science , Satna , Madhya Pradesh

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 Table of contents

S.No Particulars Page no.

1 Title 1
2 Declaration 2
3 Letter of Approval 3
4 Completion Certificate 4
5 Acknoeledgement 5
6 Abstract 6
7 Introduction 6,7
8 Statement of the problem 7,8
9 Objectives 8
10 Limitations 8
11 Company profile : 8-9
1. Overview 8
2. Vision of HDFC Bank 9
3. Mission of HDFC Bank 9
12 Review of Literature 10 , 11
13 Research Methodology : 11-12
1. Research approach & design 11
2. Sources of online data 12
3. Sampling Design 12
14 Data Interpretation 13-16
15 Findings 16-18
16 Challenges in Research 18
17 Suggestions 19
18 Conclusion 19
19 References 20
 “A STUDY ON CONSUMER PERCEPTION
TOWARDS HOME LOANS IN HDFC BANK”

ABSTRACT

today as more people have been living a better standard of living and desire for owning a
house. Need not be for the purpose of building or buying a house for oneself but Home loans
came into widespread use in the United States in the boom years of the late 1800s. Since
the average person usually cannot afford to pay cash for something as expensive as a
home, lenders began offering loans for the
difference between the purchase price of a home and the cash down payment supplied by
the buyer. These loans were interest-only loans of between five and 10 years that were due
in full at the end of the loan term. Homeowners would refinance the loan at the end of each
term or save up enough cash to pay off the loan in the meantime. The Great Depression and
its resulting foreclosures demanded a move to the modern amortized mortgage, which
configures payments into both principal and interest portions. These 15- to 30-year loans
pay off the home by the end of the loan term.

The most common purpose of a home loan is to provide the funds a buyer needs to
purchase a home. Home equity loans allow a homeowner to borrow against the difference
between the Home’s value and the current loan balance, or equity. Investor loans permit
buyers to purchase homes as rental properties or to fix up and sell at a profit. The number of
customers availing home loans is increasing can be for any other purpose as well. HDFC
Ltd. is one of the largest companies to provide the best quality home loans. Though there is
a hike in availing home loans on one side the opposite edge of the sword features several
pre payments and early closures.

INTRODUCTION

The study is entitled as “Factors causing pre-payment of loans and customer

fulfillment of home loans in HDFC”. Customer fulfillment is a term frequently used in
marketing. It is a measure of how products and services supplied by a
company meet or surpass customer expectation.

A home loan is a long-term commitment of 15-20 years, several factors like

expertise, quality of service in-depth domain knowledge and the company’s level of
commitment and transparency right through, the loan procedures, the fine print,
quality of services offered and safe retrieval of the title deed are critical. There are lot
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many banks and financial institutions through which one can easily avail of a home
loan at reasonable rate of interest. The success of a business depends upon its
ability to attract and retain customers that are willing to purchase good and services
at prices that are profitable to the company. Consumer fulfillment describes how
customers and potential customers accept a company and its products and services.
Consumer fulfillment is important to businesses since it can influence consumer
behavior, which ultimately affects the profitability of a business. Home loans, also
known as mortgages, use the borrower's home for collateral. This home can be a
single-family house up to a four-unit property, as well as a condominium or
cooperative unit. Lenders fund home loans, but both the lenders themselves and
brokers who act on behalf of the lenders originate, or process, them.

Every financial institution offering loans to the customers would provide them with an
option of pre-payment which is the settlement of a debt or installment payment
before its official due date. A pre-payment can either be made for the entire balance
of a liability or for an upcoming payment that is paid in advance of the date for which
the borrower is contractually obligated to pay. A pre-payment can be made by a
single individual, a corporation or another type of organization. The increasing
number of pre-payments would affect the institutions loan book hence it is necessary
to decrease the pre-payment of loans by developing Further pre-payment would give
the customers two options either to reduce the tenure or equated monthly installment
(EMI) reduction. Strategies to do so.This project mainly aims in identifying and
studying the factors affecting pre-payments of home loans. The project also
identifies its effect on its loan book. The project concludes by suggesting the
strategies to reduce the pre-payments of home loans. The study was conducted from
HDFC ltd. Housing Development Finance Corporation Limited or HDFC is an Indian
financial conglomerate based in Mumbai, India. It is a major provider of finance for
housing in India. It also has a presence in banking, life and general insurance, asset
management, venture capital and education loans.

STATEMENT OF THE PROBLEM

Home Loan pre-payment is financially beneficial for Home Loan Borrowers. It helps
to reduce Interest burden thus overall cost of property. Any type of debt including
Home Loan is not good for financial health of an individual. Average Home Loan
tenure in India is 8years which means Home

Loan pre-payment is preferred by borrowers to clear off Home Loan. Normally Home
Loan pre-payment is done when we receive annual bonus or any exiting investment
mature. Home Loan Interest increase the overall cost of property. In the case of the
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 financial institution if the customer starts for the pre-payment it would not be
beneficial for the company. The purpose of the study is to find the factors causing
the pre-payment of home loans and analyzes the problem regarding the customer
fulfillment of home loans in HDFC Ltd and also to identify some of the reasons
leading to the problem.

OBJECTIVES OF THE STUDY

● To identify the most important factors causing pre-payment of home loans by

the customers.
● To evaluate the customer fulfillment regarding the home loan services offered
by the company.
● To measure the awareness level of people regarding the home loan services
offered by bank.

LIMITATIONS OF THE STUDY

● The main limitation of this study is that the Sample size collected is not a
complete representation of population.
● The information provided by HDFC Ltd was restricted as the entire study
needs to be carried out without revealing much information about the project
because it’s confidential in nature.
● The time period of study was also a constraint as it was only for one month.

COMPANY PROFILE

OVERVIEW

● HDFC Bank is known as Housing Development Finance Corporation Limited.

● If ever there was a man with a mission it was Hasmukhbhai Parekh, Founder
and Chairman of HDFC Group HDFC BANK LTD was amongst the first to set
up a bank in the private sector.
● HDFC bank was incorporated on 30th August 1994 in the name of ‘HDFC
Bank Limited’, with its registered office in Mumbai. It commenced operations
as a Scheduled Commercial Bank on 16th January1995.
● It has 88,253 permanent employees as on 31st March 2018 and has a
presence in Bahrain, Hong Kong and Dubai.
● HDFC Bank is India’s largest private sector lender by assets.
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 ● As of June 30, 2017, the bank's distribution network was at 4,715 branches
and 12,260 ATMs across 2,657 cities and towns.

FORMATION OF THE COMPANY

The Housing Development Finance Corporation Limited (HDFC) was amongst the
first to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set
up a bank in the private sector, as part of the RBI's liberalization of the Indian
Banking Industry in 1994. The bank was incorporated in August 1994 in the name of
'HDFC Bank Limited', with its registered office in Mumbai, India. HDFC Bank
commenced operations as a Scheduled Commercial Bank in January 1995.

VISION STATEMENT OF HDFC BANK

HDFC Bank's mission is to be a World Class Indian Bank. The objective is to build
sound customer franchises across distinct business to be the preferred provider of
banking services for target retail and wholesale customers segments, and to achieve
healthy growth in profitability, consistent with the bank's risk appetite. The bank is
committed to maintain the highest level of ethical standards, professional integrity,
corporate governance and regulatory compliance. HDFC Bank’s businessphilosophy
is based on five core values.

MISSION STATEMENT OF HDFCBANK

HDFC define our mission in the broader context of our shareholders, customers,
staff, the national economy, regulators and the natural environment.

● To shareholders ,HDFC mission is to optimize returns.

● To customers,HDFC mission is to provide a caring service by anticipating
their requirements and innovatively satisfying them beyond their expectations.
● To staff, HDFC mission is to identify their multi-faceted talents, develop,
motivate, recognize and reward them towards fulfillment of the institutional
and national housing vision.
● To the national economy and the industry regulator, we are the key drive and
thought leader, shaping and financing the national housing policy.
● To the natural environment, HDFC enforce sustainable practices across all
our activities.
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REVIEW OF LITERATURE

John Melonakos (2007): In his study on - A Research Study of Customer

Preferences in the Home Loans Market: The Mortgage Experience of Greek Bank
Customers concluded that the important influential factors emerge, such as the
various offers of banks, the bank’s reputation, existing cooperation, as well as bank
staff. Bank branches proved to continue constituting the primary distribution channel
for mortgage products and services.

D. Regis Arunodayam and N. Thangavel (2007): In their study on - A study of the

Housing Industry with special reference to the city of Chennai examined the
developments in the housing finance in India in the
early 21st century and the magnitude of the problem of housing in the country and
the implication of housing policies.

Kirti Dutta and Anil Dutta (2009): In their study on - Customer Expectations and
Fulfilment across the Indian Banking Industry and the Resultant Financial
Implications have studied the expectations and perceptions of the consumers across
the three banking sectors in India. It was found that in the banking sector it is the
foreign banks which are perceived to be offering better quality of services followed
by the private and then public banks and these perceptions are reflected in the
financial performance of the banks also.

Aparna Mishra and Kamini Tandon (2011): In their study on - A Customer Centric
Approach towards Retail Banking Services: A Glimpse analyzed the customer’s
perception on the retail banking services offered by namely five private sector banks
situated in Delhi and to study the major factors influencing their choice of banks and
its products.

Rashmi Chaudhary and Yasmin Janjhua (2011): In their study on - Customer

Perceptions and Fulfilment towards Home Loans found that the customers of the
company were highly satisfied with the home loan services in relation to its services,
transparency, time taken for loan approval, employee co-operation and query
handling, prima facie of some problems like procedural delays, lack of knowledge
and red-tapism.

Gupta and Sinha (2015) examine factors influencing the purchase of home loan are
a low rate of interest, easy accessibility, the status/ reputation of the institution and
scheme offered by the company and that these influence the selection of the housing
finance institution.

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Chithra and Muthurani (2015) conducted a study on customer perception towards
home loan in H.D.F.C in Chennai with the 85-sample size. The study shows that
H.D.F.C. bank home loans have a product portfolio for satisfying different consumer
needs.

Research Methodology

Research methodology issued for finding out the truth of the problem.Research
simply means search for fact and answers to question or solutions to a problem. It is
a purposive investigation organized enquiry with purpose. It is directed to find out
explanations or to clarify facts.The quality and reliability of research study is
depending on the information collects in the scientific and methodology manner.
There search methodology is away to systematically solve there search problem.
The methodology shall be considered on the methods used in one research in
selecting samples, sample size, data collection and various tools for data analysis.
Scientific planning of designing of research method is blueprint for any research
study. Therefore,proper time and attention should be given in designing the plan of
research. Selection of methodology for a particular project is made easy by sorting
out a number of alternative approaches, each of them having its own advantages
and disadvantages. Efficient design is that which ensure that there relevant data are
collected accurately.There search methodology using here is descriptive research.
There searcher collects the primary data and secondary data from various sources.
Sample size are decided and questionnaire are used for conducting research. The
clarity in research problem and sample size would help to make the research study.

RESEARCH APPROACH AND DESIGN

There are two basic approaches to research Quantitative and Qualitative

approaches.The former involves the generation of data in quantitative form which is
subjected to rigorous analysis in a formal rigid fashion.Research design is a master
plan or model for conduct of formal investigation and survey it is the specification
method and procedures for acquiring information needed for solving the problem.
Research design is the blueprint for doing the research in a cost-effective manner.“
Research is the arrangement of condition for collecting and analysis of data in a
manner that aims to combine relevance to the research purposes with economy in
procedure”. A research design is a specified framework for controlling the collection.
It is the basic plan, which guides the data collection analysis phase of the research.

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SOURCES OF ONLINE DATA

After establishing the objective and determining the design of the research study, it is
necessary to collect accurate data. Data used for the study was collected from
twosources, primary source and secondary source.
There are two types of sources of data

Primary Data
Secondary Data

Primary data
Primary data refers to the first hand information that an investigator himself collects
from the respondents. It’s direct and original in nature. It refers to the data collected
a fresh forth first time. Primary source consists of direct data collection from the
customers and company officials. This consists of questionnaire and telephonic
interview.

Secondary data
Secondary data are the information collected from those data which have already
been obtained by some other researcher. It is second hand information. Secondary
research can be rich in the information if you know what to look for and where to
look. Here you have to keep track of sources you gather in an orderly way. For this
study data is collected from company records, manuals, specimen documents, and
data bases belonging to the company and research publications.

SAMPLIN GDESIGN

A sample design is the framework,or roadmap ,that serves as the basis for the
selection of a survey sample and affects many other important aspects of a survey
as well. In abroad context, survey researchers are interested in obtaining some type
of information through a survey for some population, or universe, of interest. One
must define a sampling frame that represents the population of interest, from which a
sample is to be drawn. The sampling frame may be identical to the population, or it
maybe only part of it and is there fore subject to some under coverage,or it may have
an indirect relationship to the population (e.g.the population is pre school children
and the frame is a listing of preschools).The sample design is selected mainly for the
studies or researches where primary data is be in gussed. With the help of sampling
design survey can be conducted through questionnaires and research will be done
based on the available data from the respondents.

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DATA INTERPRETATION

What was your mode of enquiry towards Pre-payment of loan?

Table1.1 - :Enquiry mode

Mode of Enquiry Percentage Frequency

Phone 32 24.6
Online 42 32.3
Walk – in 56 43.1
Others 0 0.0
Total 130 100
Source : primary data

Figure 1.1 – Enquiry Mode

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 Interpretation

Majority of respondents 43% made their enquiry by walking into the service
centers.While 32% of respondents made their enquiry online and 24.6% respondents
made their enquiry over phone. This might be because people can get more clarity of
information when they come directly to office and enquire.
6.What was the mode of pre-payment you prefer/used?

Table1.2 - :Mode of Pre-payment

Mode of Pre – Payment Frequency Percetage

Cheque 87 66.9

Demandraft 43 33.1

Others 0 0.0

Total 130 100

Source : Primary Data

Figure – 1.2 – Mode of Pre – Payment

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Interpretation

A major percent of respondents did their Pre-payment through cheque. While 33% of
respondents made the pre-payment with Demand draft. As the firm doesn’t accept
cash, most people prefer cheques over DD. This might be because DD carries
additional charges while Cheque doesn’t carry any charge for
customers. OTOP (one time online payment) is other facility where customers lack
knowledge on how to use.

Figure – 1.3

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 Figure – 1.4

FINDINGS

Following are the findings of our study:

• Majority of respondents of about 41% who came to Pre-pay loan were of age
group 35-45.

• 60% of respondents who came to Pre-pay were males.

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• Majority of respondents of about 35% who came for Pre-payment was
employed in private sector. This is followed by 29% from self-employed
professionals.

• 37% respondents who came to Pre-pay loan come in the income bracket of
Rs60000-150000.

• 43% of respondents made their enquiry for Pre-payment by walking in to the

service center.

• Cheque was the most preferred or used mode for Pre-payment of the loan. It
was preferred by 67% respondents.

• 72% of respondents said they were counseled on the effect of Pre-payment

by the employees.

• Almost 50% of respondents are very much aware about the impact of Pre-
payment of loan and tax benefits they are going to lose.

• From the study it was identified that Availability of own fund is the major
reason for the loan closure. 38.5% respondents closed their loan as they have
own fund or savings.

• A large number of people closes the loan either to transfer loan to another
organization and also to have peace of mind. 22% respondent’s Pre-paid loan
to transfer loan to other organization.

• 72% of respondents decided to transfer the loan to another organization. The

main reason for loan transfer is due to additional fund requested not met.

• 40% of respondents said their source of fund is from personal savings.

• 48% of respondents were aware that there are various products and schemes
in market which yield higher returns.

• Majority of people, about 46% consider fixed deposits and recurring as an

alternative to Pre-pay the loan.

• 63% respondents were informed about reducing the spread by HDFC

employees to prevent pre-payment.

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 • Most of respondents are satisfied with the information provide on website.

• 48% respondents said it took less than 10 minutes for their Pre-payment
procedures.

• Majority of over 60% respondents are satisfied with the Pre-payment process.

• 37% of respondents stated that the service quality is very good.

• Majority of respondents said they are likely to come back to HDFC for their
future homeloan’s needs, as they are satisfied with HDFC service.

• 60% of respondents said that they will recommend HDFC to others.

Challenges in Research

• Choosing your research topic.

• Finding research funding.
• Convincing others of the value of your research.
• Overcoming imposter syndrome.
• Building a good research team (or finding collaborators).
• Recruiting research participants (or collecting samples).

SUGGESTIONS

Product related suggestions

● It is suggested to bring some of the product which company lacks and

the competitors have i.e. expand their product portfolio.

● It is suggested to bring customization, depending on various needs of

customers.

Customer related suggestions

● It is suggested to bring Medical aim insurance and other policies focusing on

the senior citizens nearing to retirement.

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General suggestions

● It is suggested to educate the people regarding tax benefits of having home

loans.

● It is suggested to make people aware the benefits they have from HDFC.

● It is suggested to have more advertisements and campaigns as the heavy

competition in market.

● It is suggested to bring in a feedback system after every process customer

have with HDFC, so as to make improvements accordingly.

BIBLIOGRAPHY

REFERENCES

● Annual report (2019)Mumbai Housing Development Finance Corporation

Limited.

● Annual report (2018)Mumbai Housing Development Finance Corporation

Limited.

● Kothari C.R. (2014) Research Methodology (New Delhi :Prentice Hall of India
Pvt Ltd.)

● Kotler.P (2005) Marketing Management 12thedition (NewDelhi:Prentice Hall

of India PvtLtd.)

● Kotler.P (1996) Marketing Management-Analysis, Planning, Implementation

and Control ,8th Edition (New Delhi: Prentice Hall of India Pvtm Ltd.)

● A study on residential housing demand in India (Mumbai: White falcon

publishing.)

Conclusion

HDFC Bank has provided tons of promising services to its customers. Being a
private bank, the company has earned absolute trust from its customers and gained

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a huge customer base throughout the country.

The bank engages with various financial and banking services such as Treasury
operations and commercial banking. HDFC Bank facilitates the banking services of
various upper and middle-income people and organizations across India. The bank
has a very strong position in the market and is considered the most reliable and
reasonable private bank in India, later followed by ICICI bank.

WEBSITES

● https://economictimes.indiatimes.com(HousingFinanceIndustryGrowthandMar
ketshare.)

● https://www.hdfc.com(AboutUs.MumbaiHousingDevelopmentFinanceCorporat
ionLimited.)

● https://www.livemint.com/quarterlyHousingDevelopmentFinanceCorporationLi
mitedquarterresults
.

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