A PROJECT REPORT ON

DIFFERENCES BETWEEN HOUSING-LOANS PROVIDED BY SBI AND HDFC BANK

SUBMITTED BY:- VAGHELA MANISHA D. BMS/BBA :3rd YEAR, SEMESTER: - 5th

SUBMISSION DATE:-18 -9-2012 ACADEMIC YEAR:- 2012-2013

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ACKNOWLEDGEMENT
There is always a sense of gratitude which one express towards others for their help
and supervision in achieving the goals. This formal piece of acknowledgement is an attempt to express the feeling of gratitude towards people who helpful me in successfully completing of My Project .

I would like to express my deep gratitude to our principle MISS. DEVIBEN DAVE and our HOD MISS SHILPA BHATT . Special thanks to PRF. I. M . TRIVEDI who guided me to work honestly and to give valuable suggestion for improving my work Last

but not least I would also like to place of appreciation to all Family members or Bank
managers whose responses were of utmost importance for the project.

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Above all no words can express my feelings to my parents, friends all those persons who supported me during my project. I would like to give special thanks to My Brother and My Father whose cooperation & support has helped me a lot in collecting necessary information. I would also like to thank almighty God for his blessings showered on me during the completion of project report.
MISS. MANISHA VAGHELA

T.Y B.M.S SEM:-5TH

ROLL. NO. 33

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OBJECTIVES OF THIS STUDY

To study the Differences Between Housing-Loans Provided By SBI

And HDFC Bank

To study the cost of home loans provided by the SBI and HDFC BANK. To know the consumer perception about the home loan of SBI and

HDFC BANK. BANK.

To know the procedure for taking housing loan of SBI and HDFC To search the different types of housing loans of SBI and HDFC BANK. To know the necessary documents which are needed for taking housing

loan of SBI and HDFC BANK.

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FLOW OF PRESENTATION
CURRENT RATE OF INTREST ON HOUSING LOAN PROVIDED BY SBI AND HDFC
INTRODUCTION OF HOUSING LOAN TYPES OF HOUSING LOAN ADVANTAGES OF HOUSING LOAN DISADVANTAGES OF HOUSING LOAN PROCEDURE FOR GETTING HOUSING LOAN DOCUMENTS NEEDED FOR HOUSING LOAN

HOUSING LOAN PROVIDED BY STATE BANK OF INDIA (SBI)

FEATURES AND INTREST RATE

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 HOUSING LOAN PROVIDED BY THE HOUSING DEVELOPMENT FINANCE CORPORATION LIMITED (HDFC)

FEACHURS AND INTREST RATE OF HDFC BANK LOAN

DIFFERENCES BETWEEN HOUSING-LOANS PROVIDED BY SBI AND HDFC BANK

WAY SHOULD YOU TAKE HOME LOANS FROM SBI AND NOT HDFC? WHICH IS THE BEST BANK FOR HOME LOAN ? Conclusions

BIBLIOGRAPHY

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SHOULD YOU SHIFT TO LOWER HOME LOAN RATES OR SWITCH LENDERS? Preeti Kulkarni, ET Bureau Apr 5, 2012, 06.42AM IST times of india

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INTRODUCTION OF HOUSING LOAN

Everyone dreams of owning his own land and property one day and to turn this dream into reality is what the system of home loans do in India. Now a day there is a cut throat competition in each and every sector of economy. It is same for banking sector.

Now a days rural people are migrating towards urban areas

for employment as well as for education purpose. So they are demanding more for housing loan.

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 Many banks are providing home loans at cheapest rate

to attract consumers towards them.

Taking home loans these days has become simpler.

With the RBI regularly bring down interest rates; taking home loans have become extremely easy.
Housing loans which were 16.5% to 18% a few years ago

fell by 11.5% to 13%. With interest rates going down, people increasingly number apply to take these loans.
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TYPES OF HOUSING LOANS

Home Purchase Loans: Home Improvement Loans: Home Extension Loans: Home Conversion Loans: Land Purchase Loans: Stamp Duty Loans: Bridge Loans: Balance-Transfer Loans: Re-finance Loans: NRI Home Loans:
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ADVANTAGES OF HOME LOANS: Help in owning a home: Attractive interest rates: Loan period:-

Door-Step Services: No requirement of guarantor: For accidental death insurance :-

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DISADVANTAGES OF HOME LOANS: High Cost: Fluctuating interest rates : Delays in processing :-

Problems in disbursement:-

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PROCEDURE FOR GETTING HOUSING LOAN

Step 1: Application form Step 2: Personal Discussion Step 3: Bank's Field Investigation Step 4: Credit appraisal by the bank and loan sanction Step 5: Offer Letter Step 6: Submission of legal documents & legal check Step 7: Technical / Valuation check Step 8: Valuation Step 9: Registration of property documents Step 10: Signing of agreements and submitting postdated cheques Step 11: Disbursement
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DOCUMENTS NEEDED FOR HOUSING LOAN

Completed loan application form with one passport size photograph Proof of individuals identity (any one of the following) Passport Photo PAN card Defense identity card Voter's identity card Driving license Photo ration card Government identity card Proof of residence (any one of the following) Passport Ration card Telephone (land/mobile) bill
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Electricity bill Driving license Society outgoing bill Voter's identity card Life Insurance Policy Only Passport can be used as both Proof of individual's identity and Proof of residence. Proof of age (any one of the following) Passport Valid driving license Voter's identity card Birth certificate School leaving certificate LIC Policy or Premium receipt clearly indicating the applicant's age Letter from the employer stating the age of the employee

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HOUSING LOAN PROVIDED BY STATE BANK OF INDIA (SBI)

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FEATURES AND INTEREST RATES

1.)ELIGIBILITY: Minimum age: 18 years as on the date of sanction Maximum age: 70 years. i.e. the age by which the loan should be fully repaid, subject to availability of sufficient, regular and continuous source of income for servicing the loan repayment.

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2.)REPAYMENT
Repayment period: Maximum 30 years (or) Up to the

age of 70 years (the age by which the loan should be fully repaid) of the borrower, whichever is early. Moratorium period (Repayment holiday): The moratorium period is included within the maximum repayment period.

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All Rate are floating only (Base Rate= 10.00% p.a.)

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HOUSING LOAN PROVIDED BY THE HOUSING DEVELOPMENT FINANCE CORPORATION LIMITED (HDFC)

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FEATURES AND BENEFITS OF HDFC HOME LOANS

1. 2. 3. 4. 5. 6. 7.

Home loan: Home improvement loan: Home extension loan: Land purchase loan: Loan cover term assurance plan: Automated repayment of home loan emi: Customer privileges:

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DIFFERENCES BETWEEN HOUSING-LOANS PROVIDED BY SBI AND HDFC BANK

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SBI V/S HDFC

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 HDFCs new home loan product comes at a fixed rate

of 8.25 per cent per annum for the first three years (up to March 2012). However, these rates are applicable for loans up to Rs. 30 lakh and a maximum tenure of 20 years, and not on the other two slabs, i.e., loans between Rs. 30 lakh and Rs. 50 lakh; and Rs. 50 lakh and above.

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2.)

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 HDFCs new loan offer is in direct competition with

SBIs Easy Loan scheme, but it is difficult to guess the winner. Now let us have a rundown on SBIs Easy Loan scheme. Loans under this scheme are offered at a fixed rate of 8 per cent for the first year, 8.5 per cent the next two years and thereafter at a floating rate of 2.75 per cent below

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 its benchmark rate (SBAR, State Bank Advance Rate)

or at a fixed rate of 1.25 per cent below SBAR. Currently, SBAR stands at 11.75 per cent. The comparative rates of both SBI and HDFC are given in Table 1. Recently, SBI extended its special loan offer till March 31, 2013 to maintain its credit growth target and build up retail portfolio in lieu of a slump in commercial lending.

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3. HOME LOAN TAX IMPLICATIONS

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 Here, we have analyzed HDFC and SBI offers in terms

of interests paid in the first three years, total interest paid and effective interest rate for the complete tenure (refer Table 2 and 3). In Table 2, we see that there is a marginal difference in the first 3-year interest components of both the lenders. However, in terms of total interest payments, HDFC scores over SBI; HDFC borrowers save Rs. 75,683 in interest compared to SBI borrowers. The effective interest rate in case of HDFC comes to 8.69 per cent compared to SBIs 8.85 per cent.
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4.

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 However, in case of a Rs. 60-lakh loan (refer Table 3),

interest component in the first 3 years varies considerably, i.e., 19.90 per cent and 22.34 per cent of the total interest paid for SBI and HDFC, respectively. If the borrower is looking to prepay his/her loan, SBIs offer would be a good bet in this case. SBI also scores over HDFC in terms of total interest paid, and thus, the effective interest rate comes to 9.69 per cent for SBI in comparison to 9.78 per cent for HDFC. Here, HDFC borrowers end up paying Rs. 70,348 more than SBI borrowers.
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WHY HDFC BANK IS BEATING THE HELL OUT OF STATE BANK OF INDIA?
On Tuesday, an astonishing thing happened. HDFC

Bank briefly overtook the State Bank of India (SBI) and became Indias most valuable bank when SBIs balance-sheet is five times bigger than HDFC Banks even without counting the formers five major subsidiaries. Though Wednesday saw things reverse a bit, the fact is investors now think the two banks are worth more or less the same around Rs 1,10,000 crore each, give or take a bit. It is only a matter of time before HDFC Bank overtakes it permanently.
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Way should you take home loans from SBI and not HDFC?
The war is on but there is nothing new in it. Banks and

financial institutions are offering lower floating rate loans to new borrowers while old borrowers are made to pay high rate of interest of the floating rate. new rates to the existing customers.

As usual banks and financial institutions are not passing One of friend Rahul Sharma borrowed money for home

loan from HDFC three years back. He is currently paying 11.5% rate of interest for a loan amount of 23.5 lakhs while new borrowers in the same category are eligible for floating rate loans at 10.5% ( See table below). This results into huge cost of 1% on loan of 23.5 lakhs.
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 Since banks and financial institutions do not pass the

benefit of floating rate of interest to new borrowers, where should you borrow your money from a bank i.e. SBI or a financial institution i.e. HDFC. While existing rate of interest is indeed a key consideration, you should also evaluate whether you will benefit from reduced floating rate of interest.

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Conclusions
Housing loan are necessary for making own house for

middle class people. This project report can be used for necessary information regarding Differences Between housing-loans provided by SBI and HDFC bank. The project report is based on SBI and hdfc banks housing loan . I try my best to satisfy my project topic. I use all relevant information regarding housing loan which help me to compare two banks housing loan facility policy ,rule and regulations .

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BIBLIOGRAPHY

1.)BOOKS: The Indian financial system & development - Vasant Desai 2.)VISIT : SBI Neelam baugh branch HDFC BRANCH - DOWN CHOCK,BHAVNAGAR 3.) SITES : www.sbi.com [History, introduction & other more] Wikipedia.org / wiki / bank www.wikipedia.com www.managementparadise.com www.scribd.com www.hdfcbank.com http://en.wikipedia.org/wiki/HDFC_Bank
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 https://www.sbi.co.in/user.htm?action=viewsection&lang=

0&id=0,1,20,115 https://www.sbi.co.in/?action=viewsection&lang=0&id=0,1 ,20,115,742 http://jerinjoseph.wordpress.com/2011/02/02/sbi-homeloan-process-explained-in-steps/ http://www.rediff.com/money/2009/feb/13perfin-sbi-8percent-home-loan-rate-lure.htm http://articles.economictimes.indiatimes.com/2012-0327/personal-finance/31244886_1_prime-lending-homeloan-customers-base-rate

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