A

PROJECT REPORT

ON

“A STUDY ON PERSONAL LOANS OF HDFC BANK”

FOR
HDFC BANK LTD

UNDER THE GUIDANCE OF

SUBMITTED TO SAVITRIBAI PHULE PUNE UNIVERSITY

IN PARTIAL FULFILLMENT OF 2 YEARS FULL TIME COURSE
MASTERS IN BUSINESS ADMINISTRATION (M.B.A)

SUBMITTED BY
TANIYA DUTTA
(BATCH 2017-19)

INSTITUTE CODE-6626

ARIHANT INSTITUTE OF BUSINESS MANAGEMENT,

PUNE - 21
COMPANY CERTIFICATE
COLLEGE CERTIFICATE
 ACKNOWLEDGEMENT
I, Taniya Dutta a student of RIIM–ARIHANT INSTITUTE OF BUSINESS
MANAGEMENT,Pune is highly greatful to all those who guided me in completing this
project.

First of all, I would like to pay my heartiest thanks to entire family of HDFC BANK
especially to Mrs.Shelly Bhatia, Branch manager of Boat Club HDFC Bank, who provided
me such a wonderful opportunity to do Summer Training and provided their valuable
suggestions in understanding the work of Research Project. I would like to thanks my Mentor
Mr. Amit Kench for imparting his valuable guidance to me.

Last but not the least, I would like to thank all faculties of RIIM and AIBM specially
Mr.Kumendra Raheja, Director at RIIM and Dr.Meetali More,my college project guide
,who gave me the useful tips and suggestions regarding project.

Words can never express the deep sense of gratitude, I feel for HDFC BANK employees,
who has been a constant source of inspiration and encouragement for me.
Table of Contents
1. EXECUTIVE SUMMARY....................................................................................................................1
2. OBJECTIVE AND SCOPE OF THE PROJECT..........................................................................................2
2.1 RELEVANCE OF THE STUDY..........................................................................................................2
3. COMPANY PROFILE..........................................................................................................................3
3.1 ORIGIN OF THE ORGANIZATION.................................................................................................3
3.2 GROWTH AND DEVELOPMENT OF THE ORGANIZATION..............................................................3
3.3 LOGO AND TAGLINE OF HDFC BANK............................................................................................3
3.4 PRESENT STATUS OF THE ORGANIZATION....................................................................................4
3.5 BUSINESS FOCUS.........................................................................................................................4
3.6 CAPITAL STRUCTURE....................................................................................................................4
3.7 DISTRIBUTION NETWORK............................................................................................................5
3.8 MANAGEMENT............................................................................................................................6
3.9 SUBSIDIARY AND ASSOCIATE COMPANIES...................................................................................6
3.10 HDFC BANK business strategy emphasizes the following:..........................................................7
3.11 FUNCTIONAL DEPARTMENTS OF THE ORGANIZATION...............................................................7
3.12 PRODUCT SCOPE:.......................................................................................................................8
3.13 PRODUCTS AND SERVICES AT A GLANCE....................................................................................9
3.14 SWOT ANALYSIS OF HDFC BANK...............................................................................................14
4. THEORITICAL BACKGROUND............................................................................................................15
4.2 TYPES OF PERSONAL LOANS......................................................................................................17
4.3 PERSONAL LOAN FEATURES.......................................................................................................24
4.4 How to apply for a personal loan...............................................................................................25
4.5 DOCUMENTATION -....................................................................................................................26
4.6 CHARGES APPLICABLE BEFORE AND AFTER THE PERSONAL LOAN -..........................................27
4.7 PERSONAL LOAN : ELIGIBILITY CRITERIA :-.................................................................................29
4.8 PERSONAL LOAN RATES AND FEES............................................................................................31
4.9 LOAN PROCEDURE :-.................................................................................................................33
5. RESEARCH METHODOLOGY............................................................................................................36
5.1 RESEARCH DESIGN AND METHODOLOGY................................................................................36
5.2 SCOPE OF THE STUDY.................................................................................................................36
 5.3 METHODS USED FOR DATA COLLECTION ARE............................................................................36
5.4 TOOLS FOR DATA COLLECTION...................................................................................................37
5.5 SAMPLING METHOD USED:.......................................................................................................37
5.6 SAMPLE SIZE:.............................................................................................................................37
5.7 SAMPLING METHOD USED.........................................................................................................37
5.8 SCALE:........................................................................................................................................37
5.9 AREA OF SURVEY:.......................................................................................................................37
6. DATA ANALYSIS.............................................................................................................................38
6.1) TABLE SHOWING DISTRIBUTION OF AGE -................................................................................38
6.2) TABLE SHOWING DISTRIBUTION OF GENDER...........................................................................39
6.3) TABLE SHOWING THE DISTRIBUTION OF THE MONTHLY SALARY.............................................41
6.4) THE IMPORTANCE OF THE INTEREST RATE ACCORDING TO THE CUSTOMERS-.........................42
6.5) THE IMPORTANCE OF PROCESSING FEES AND TIME IN HDFC BANK ACCORDING TO
CUSTOMRES.....................................................................................................................................43
6.6)TABLE SHOWING SIZE OF THE EASY MONTHLY INSTALLMENT-..................................................44
7. SUMMARY OF FINDINGS..............................................................................................................45
8. CONCLUSION...............................................................................................................................46
9. RECOMMENDATIONS-.................................................................................................................47
10. BIBLIOGRAPHY.........................................................................................................................48
11. ABBREVIATIONS.......................................................................................................................49
12. ANNEXURE...............................................................................................................................50
12.1 Questionnaire..........................................................................................................................50
12.2 FAQ..........................................................................................................................................53
 1. EXECUTIVE SUMMARY

Banks extend loan facilities by way of fund based and non fund based facilities. Fund based
facilities include term loans, cash credit, bills discounted and bills purchased, demand loans
and overdrafts. Non fund based includes inland and foreign letters of credit, issuance of
guarantees, deferred payment guarantees, bills acceptance facility etc.

Efficient management of loans and advances portfolio has assumed greater significance as it
is the largest asset of the bank having direct impact on its profitability. Credit appraisal is also
an important function of the bank. It is the process of appraising the credit worthiness of a
loan applicant and to evaluate the economic viability of the project.

I have undertaken a study at THE HOUSING DEVELOPMENT FINANCE

CORPORATION LTD. (HDFC BANK) , BOAT CLUB BRANCH,PUNE .

The study is on “PERSONAL LOAN OF HDFC BANK”.

The main focus of my project is on the appraisal of loans and to keep a check on the credit
worthiness of the borrower and the financial & economic viability of the loan proposed. The
whole credit appraisal process has been explained in various steps that are taken by banks in
evaluating a borrower.

The objective of the project is to know the loan proposal system of HDFC bank.The analysis
of any project consists of two parts -

 Internal
 External

Internal is extract of internal analysis , consisting of calculation of tenor as per norms

,calculation of eligibility with reference to income shown by an applicant, then if approved,
to calculate the equated monthly installments & actual disbursement.

External analysis involves collection of documentary proofs regarding income profile,

residence verification, repayment capacity and the end use.

1
 2. OBJECTIVE AND SCOPE OF THE PROJECT
The objective of the project “A STUDY ON PERSONAL LOAN OF HDFC BANK” is
divided into two parts:

Primary Objective: The main objective of the study is to find out the tariff charges,
percentage of funding, tenure of personal loan and other charges charged by other banks in
comparison to HDFC Bank. The aim of the study is to help HDFC to know where it lacks in
Loans and how far the performance of other banks is better, so that HDFC figure out the
common problems being faced by customers while dealing in the Loan Department so that
further HDFC can improve its services and schemes offered by them to their customers.

Secondary objective: The secondary objective of the study is to find out the extent to which
customer expectations match HDFC performance in Loan services. This was done to help
HDFC to recognize their faults in customer dealing .As in this competitive world customer
satisfaction is more important than huge profits so customer satisfaction survey will help it in
finding out its position.

To conclude the objectives can be framed as follows :-

 To study the loan policies of the Bank.

 To study the credit appraisal.
 To study the various types of loans and advances.
 To study the documents required for loan sanctioning procedure.
 To study the loan sanction producers.
 To study the various types of borrowers.

2.1 RELEVANCE OF THE STUDY

The project work deals with the study of applicant’s capability to repay the credit and to
appraise the economic and financial viability of the credit undertaken. The loan proposal is
appraised financially, economically and technically so as to confirm the financial soundness
of the borrower. It gives a practical insight of the procedures followed by the banks in
ascertaining the credit worthiness of the borrower.

In today’s market scenario, one of the most critical areas to focus on is to protect the bank
from bankruptcy. In such conditions Credit and Risk Department plays a key role in growth
of banks. Any delay in realizing the receivables would adversely affect the working capital,
which in turn effects the overall financial management of a firm. No firm can be successful if
it’s over dues are not collected, monitored and managed carefully in time.

2
 3. COMPANY PROFILE

3.1 ORIGIN OF THE ORGANIZATION

HOUSING DEVELOPMENT FINANCE CORPORATION LTD. is India's premier housing
finance company and enjoys an impeccable track record in India as well as in international
markets. Since its inception in 1977, the Corporation has maintained a consistent and healthy
growth in its operations to remain the market leader in mortgages. Its outstanding loan
portfolio covers well over a million dwelling units. HDFC has developed significant expertise
in retail mortgage loans to different market segments and also has a large corporate client
base for its housing related credit facilities. With its experience in the financial markets, a
strong market reputation, large shareholder base and unique consumer franchise, HDFC was
ideally positioned to promote a bank in the Indian environment.

3.2 GROWTH AND DEVELOPMENT OF THE ORGANIZATION

HDFC Bank is headquartered in Mumbai. The Bank at present has an enviable network of
over 1400 branches spread over 600 cities across India. All branches are linked on an online
real-time basis. Customers in over 120 locations are also serviced through Telephone
Banking. The Bank's expansion plans take into account the need to have a presence in all
major industrial and commercial centers where its corporate customers are located as well as
the need to build a strong retail customer base for both deposits and loan products. The Bank
also has a network of about over 2000 networked ATMs across these cities. Moreover, HDFC
Bank's ATM network can be accessed by all domestic and international Visa/MasterCard,
Visa Electron/Maestro, Plus/Cirrus and American Express Credit/Charge cardholders.

3.3 LOGO AND TAGLINE OF HDFC BANK

LOGO -

TAGLINE – “ bank aapki muthi mein”

3
3.4 PRESENT STATUS OF THE ORGANIZATION
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.

Promoter-

HDFC is India’s premier housing finance company and enjoys an impeccable track record in
India as well as in international markets. Since its inception is 1977, the Corporation has
maintained a consistent and healthy growth in its operations to remain a market leader in
mortgages.

3.5 BUSINESS FOCUS

HDFC Bank's mission is to be a World-Class Indian Bank. The objective is to build sound
customer franchises across distinct businesses so as to be the preferred provider of banking
services for target retail and wholesale customer 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 business philosophy is based on four core values - Operational
Excellence, Customer Focus, Product Leadership and People.

3.6 CAPITAL STRUCTURE

The authorized capital of HDFC Bank is Rs550 crore (Rs5.5 billion). The paid-up capital is
Rs424.6 crore (Rs.4.2 billion). The HDFC Group holds 19.4% of the bank's equity and about
17.6% of the equity is held by the ADS Depository (in respect of the bank's American
Depository Shares (ADS) Issue). Roughly 28% of the equity is held by Foreign Institutional
Investors (FIIs) and the bank has about 570,000 shareholders. The shares are listed on the
Stock Exchange, Mumbai and the National Stock Exchange. The bank's American Depository
Shares are listed on the New York Stock Exchange (NYSE) under the symbol 'HDB'.

4
3.7 DISTRIBUTION NETWORK

HDFC Bank headquartered is in Mumbai. The Bank at present has an enviable network of
over 1229 branches spread over 444 cities across India. All branches are linked on an online
real-time basis. Customers in over 120 locations are also serviced through Telephone
Banking. The Bank's expansion plans take into account the need to have a presence in all
major industrial and commercial centers where its corporate customers are located as well as
the need to build a strong retail customer base for both deposits and loan products. Being a
clearing/settlement bank to various leading stock exchanges, the Bank has branches in the
centers where the NSE/BSE has a strong and active member base. The Bank also has a
network of about over 2526 networked ATMs across these cities. Moreover, HDFC Bank's
ATM network can be accessed by all domestic and international Visa/MasterCard, Visa
Electron/Maestro, Plus/Cirrus and American Express Credit/Charge cardholders.

STRONG NATIONAL NETWORK

5
3.8 MANAGEMENT
Mr.Jagdish Kapoor took over as the bank’s Chairman in July 2001, Prior to this, Mr.Kapoor
was a Deputy governor of the Reserve Bank of India. The Managing Director, Mr.Aditya
Puri, has been a professional banker for over 25 years. And before joining HDFC Bank in
1994 was heading Citibank’s operations in Malaysia. The Bank’s Board of Directors is
composed of eminent individuals with a wealth of experience in public policy, administration,
industry and commercial banking. Senior executive representing HDFC are also on the Board
Senior banking professionals with

3.9 SUBSIDIARY AND ASSOCIATE COMPANIES

The subsidiaries of HDFC consists of

1. HDFC Bank

2. HDFC Mutual Fund

3. HDFC Standard Life Insurance Company

4. HDFC Realty

5. HDFC Chubb General Insurance Company Limited.

6. Intel net Global Services Limited

7. Credit Information Bureau (India) Limited

8. Other Companies Co – Promoted by HDFC

 HDFC Trustee Company Ltd.

 GRUH Finance Ltd.

 HDFC Developers Ltd.

 HDFC Venture Capital Ltd.

 HDFC Venture Trustee Company Ltd

 HDFC Securities Ltd.

 HDFC Holding Ltd.

 Home Loan Services India Pvt. Ltd.

6
3.10 HDFC BANK business strategy emphasizes the following:

Increase market share in India’s expanding banking and financial services industry by
following a disciplined growth strategy focusing on quality and not on quantity and
delivering high quality customer service. Leverage our technology platform and open
scalable systems to deliver more products to more customers and to control operating costs.
Maintain current high standards for asset quality through disciplined credit risk
management. Develop innovative products and services that attract the targeted customers
and address inefficiencies in the Indian financial sector. Continue to develop products and
services that reduce bank’s cost of funds. Focus on high earnings growth with low volatility.

3.11 FUNCTIONAL DEPARTMENTS OF THE ORGANIZATION

The bank has three key business areas:

1. Wholesale Banking Services

Here our target market is primarily large, blue-chip companies and to a lesser extent,
emerging mid-sized corporate. For these corporate, we provide a wide range of services,
including working capital finance, trade services, transactional services, cash management,
etc. We are a leading provider of structured solutions, which combine cash management
services with vendor and distributor finance, for facilitating superior supply chain
management for our corporate customers. We are also recognized as a leading provider of
cash management and transactional banking solutions to mutual funds, stock exchange
members and banks.

2. Retail Banking Services

The objective of the Retail Bank is to provide our target market customers a full range of
financial products and banking services, giving the customer a one-stop window for all
his/her banking requirements. The products are backed by world-class service and delivered
to the customers through the growing branch network, as well as through alternative delivery
channels like ATMs, Phone Banking, Net Banking and Mobile Banking. The HDFC Bank
Preferred program for high net worth individuals, the HDFC Bank Plus and the Investment
Advisory Services programs have been designed keeping in mind needs of customers who
seek distinct financial solutions, information and advice on various investment avenues. We
have a wide array of retail loan products including Auto Loans, Loans against Securities,
Personal Loans and Loans for Two wheelers.

7
3. Treasury Operations

Within this business, the bank has three main product areas a) Foreign Exchange and
Derivatives b)Local Currency Money Market & c) Debt Securities and Equities. With the
liberalization of the financial markets in India, corporate need more sophisticated risk
management information, advice and product structures. These are provided through the
bank's Treasury team. The Treasury business is responsible for managing the returns and
market risk on the bank's investment portfolio.

3.12 PRODUCT SCOPE:

HDFC Bank offers a bunch of products and services to meet the every need of the people.
The company cares for both, individuals as well as corporate and small and medium
enterprises. For individuals, the company has a range accounts, investment, and pension
scheme, different types of loans and cards that assist the customers. The customers can
choose the suitable one from a range of products which will suit their life-stage and needs.
For organizations the company has a host of customized solutions that range from funded
services, Non-funded services, Value addition services, Mutual fund etc. These affordable
plans apart from providing long term value to the employees help in enhancing goodwill of
the company.

The products of the company are categorized into various sections which are as follows:

• Accounts and deposits.

• Loans.

• Investments and Insurance.

• Forex and payment services.

• Cards.

• Customer centre.

8
3.13 PRODUCTS AND SERVICES AT A GLANCE

1. PERSONAL BANKING SERVICES

A. Accounts & Deposits

Savings Account

• Regular Savings Account

• Savings Plus Account

• Savings Max Account

• Senior Citizens Account

• No Frills Account

• Institutional Savings Account

• Payroll Salary Account

• Classic Salary Account

• Regular Salary Account

• Premium Salary Account

• Defence Salary Account

• Kid's Advantage Account

• Pension Saving Bank Account

• Family Savings Account

• Kisan No Frills Savings Account

• Kisan Club Savings Account

Current Account

• Plus Current Account

9
• Trade Current Account

• Premium Current Account

• Regular Current Account

• Apex Current Account

• Max Current Account

• Reimbursement Current Account

Fixed Deposit

• Regular Fixed Deposit

• Super Saver Account

• Sweep-in Account

Recurring Deposit

Demat Account

Safe Deposit Locker

B. Loans

• Personal Loans

• Home Loans

• Two Wheeler Loans

• New Car Loans

• Used Car Loans

• Overdraft against Car

• Express Loans

• Loan against Securities

• Loan against Property

• Commercial Vehicle Finance

• Working Capital Finance

• Construction Equipment Finance

10
C. Investments & Insurance

• Mutual Funds

• Insurance

• Bonds

• Financial Planning

• Knowledge Centre

• Equities & Derivatives

• Mudra Gold Bar

D. Forex Services

• Trade Finance

• Traveler’s Cheques

• Foreign Currency Cash

• Foreign Currency Drafts

• Foreign Currency Cheque Deposits

• Foreign Currency Remittances

• Forex Plus Card

E. Payment Services

• Net Safe

• Prepaid Refill

• Bill Pay

• Direct Pay

• Visa Money Transfer

• E-Monies Electronic Funds Transfer

• Excise & Service Tax Payment

11
F. Access Your Bank - One View

• Insta Alerts

• Mobile Banking

• ATM

• Phone Banking

• Branch Network

G. Cards

• Silver Credit Card

• Gold Credit Card

• Woman's Gold Credit Card

• Platinum plus Credit Card

• Titanium Credit Card

• Value plus Credit Card

• Health plus Credit Card

• HDFC Bank Idea Silver Card

• HDFC Bank Idea Gold Card

2. WHOLESALE BANKING SERVICES

• Funded Services

• Non Funded Services

• Value Added Services

• Internet Banking

• Clearing Sub-Membership

• RTGS – sub membership

• Fund Transfer

12
• ATM Tie-ups

• Corporate Salary a/c

• Tax Collection

• Financial Institutions

• Mutual Funds

• Stock Brokers

• Insurance Companies

• Commodities Business

• Trusts

3. NRI BANKING SERVICES

• Rupee Saving a/c

• Rupee Current a/c

• Rupee Fixed Deposits

• Foreign Currency Deposits

• Accounts for Returning Indians

• Payment Services

• Net Safe

• Bill Pay

• Insta Pay

• Direct Pay

• Visa Money

• Online Donation

• Remittances

13
3.14 SWOT ANALYSIS OF HDFC BANK

STRENGTH WEAKNESSES

 SEGMENTATION  MAINTENANCE CHARGES HIGH

 PRODUCT FEATURES  HIGH INTEREST RATE

 WORK ENVIRONMENT  CUSTOMER HAVE NOT FULL

INFORMATION ABOUT GETTING
 LOW DOCUMENTATION FACILITIES

OPPURTUNITIES THREAT

 MERGED WITH CENTURIAN  SBI BANK

BANK
 OTHER PRIVATE BANK
 1300 BRANCHES COMING ON (ICICI,AXSIS etc)
VARIOUS LOCATION

14
 4. THEORITICAL BACKGROUND

4.1 Meaning of Loan: -

Loan is a method of lending under which bank gives credit to a borrower for a fixed period
and for a specific purpose. Loan are promises for future payment, they have to be repaid in
periods beyond a year and are therefore long-term liabilities.

In other words “when a banker makes a advance in a lump-sum which can not be paid wholly
or partly and which the customer has permission to withdraw subsequently, it is called a
loan.”

Many a time a borrower needs funds for fixed assets or non-respective type of activities and
thus seeks money from the bank that is withdrawn in one lump sum. The loan amount is
normally repaid in installments. Loan may be shot-term, medium-term or long-term.

Loans and advances are classified in to secured and unsecured.

 Secured Loan or Advance: -

Secured loan or advance means a “Loan or Advance made on the security of assets. The
market value of which is not at any time less than the amount of such loan or advance.”

 Unsecured Loan or Advance: -

An unsecured loan or advances means a “Loan or advance not so secured. A partly covered
loan or advance is partly covered by the security of assets, the market value of such securities
being less than the amount that has been lend or outstanding at any time.”

15
Many times people would have experienced financial crisis. During such events they would
have borrowed money from their neighbour or acquaintance. These kinds of loans which are
available in banks and other financial institution are known as personal loans .A personal loan
can be a secured or unsecured one depending upon the company's practices, credit history etc.

What are personal loans?

What are its uses?

What are the types in it?

Benefits of secured and unsecured loans

Who will provide personal loans?

How one can avail personal loans?

Personal loan

A personal loan is a sum of money that an adult person borrows to meet his financial needs
and requirements. An individual can take an easy personal loan or a guaranteed personal loan
for a variety of reasons. Loans for personal debt help provide funds to purchase that dream
boat or car, pay for mortgage arrears or home improvement requirements. In fact personal
loans help meet most of the financial emergencies that an individual can think of.

Personal loans are often the most preferred type of loan on account of their flexibility. The
two most common types of personal loans are:

Secured Loans and

Unsecured Loans

Both these options are linked to the choice that one can use any fixed asset to serve as
collateral to secure an easy personal loan.

Who Will Help Provide Personal Loans and How?

There are many banks and financial institutions that would help provide with easy personal
loans or guaranteed personal loans.

As all of them would have their own sets of terms and conditions by which they abide, it
would be smart to consult with as many lending institutions before arriving at a decision of
personal loan. Talk to them about the financial requirements. Check the quotes that they give.

16
Once the formalities of taking a loan is completed, the banks would give a lump sum of
money. This could be repaid over a period of time. The longer the period of repayment, the
lesser the interest rate.

The lenders have a duty to inform the borrowers of the rate of interest that they would be
charging.

Be sure to investigate whether the rate of interest charged is fixed or floating.

Check with the banks also about any other prepayment penalties, and other costs incurred for
securing a loan

Online Personal Loans

Loans are offered by not only lenders in the locality but also by internet lenders.

They could either be directly deposited in the bank account or mailed by way of cheque.

Repayments could be automatically debited from the account to suit convenience.

Be sure to make payments on time, or else one may incur additional penalties.

Guaranteed online personal loans come with lower rates of interest than credit cards.

The first guaranteed personal loans could be a small sum; but once it is proved that payments
can be made on time, it is most likely to be assured a larger sum the next time one opt for a
guaranteed online personal loan.

4.2 TYPES OF PERSONAL LOANS

A Personal Loan is one which is borrowed from a bank, or a building society or institution, or
from any other lender as a lump sum of money. It would ideally be the best option to
consolidate all of the debts into one, so that the overall amount of monthly repayments is
reduced.

Short term personal loans, secured personal loans, fast cash personal loans, no credit personal
loans, military personal loans, second chance personal loans, Christian lending personal
loans- all these are available to a person who is looking to borrow money between one and
five years. There are basically Two Types of Personal Loans. They are:

A Secured Loan.

A secured personal loan is so called due to the security or the collateral that is involved in the
whole process of lending. It is

17
A loan that requires the consumer to provide the lender with some form of collateral or
security- that is his property or his home, either mortgaged or owned- other than just his
verbal assurance of repaying the loan.

In other words, it is a loan that has been secured on the borrower's assets.

Points to Remember Before Opting For A Secured Personal Loan

If the borrower agrees to a secured personal loan using his home as collateral, he should be
prepared for the eventuality of forfeiting it to the lender, should he not make his loan
payments and interest on time and according to the agreed terms.

The lender would sell the property to recover his money and cover any additional expenses
incurred while doing so.

Before he signs up for even a small secured personal loans, the borrower has to make sure
that he can afford the monthly payments. It would be in his best interest therefore to read the
credit agreement terms carefully, paying special attention to the interest rate and term of the
loan, the total amount that is payable, and the repayments required.

Benefits of a Secured Loan

The benefits of secured personal loans are various, the primary being:

That they can be repaid with lower monthly payment, over a longer period of time.

That the rate of interest charged on the loan would be much lower than a comparable instant
unsecured personal loans, thereby making the option of a secured personal loan cost-
effective. One also does not have to worry about unmanageable loan repayments terms, on
account of the low interest rates. Further the personal loan could also be offering a more
flexible repayment period.

That, if the borrower is the owner of a home, the chances of a lower rate of interest being
charged on the loan are high, since he has secured the loan based on the strength of his assets.
Failure to repay the loan would mean foreclosure or repossession of this asset by the lender,
thereby greatly reducing the lender's risk. Hence, the low interest rates. On secured loans, the
typical APR is 6-25%.

Secured loans are more easily available at very reasonable rates, to those with adverse credit
rating that is, with a tarnished history of defaults, arrears, and bankruptcy, and to those with a
poor credit record, for example, people who are self employed or those who have just
changed jobs.

The borrower is allowed funding that ranges from 3000 pounds (if you want a small secured
personal loan) up to 50000 pounds, and some lenders are willing to contemplate lending
more. This is much more funding than an instant unsecured personal loan would allow, and
where the maximum amount that one could borrow would be for a limit up to 25,000 pounds.

18
Secured personal loans are the loans which require a large amount that could be repaid over a
longer term.

The borrower could consolidate his more expensive borrowings into a single monthly
repayment that is much cheaper. He could opt for a secured loan in order to consolidate debt,
and to replace the high interest rate loan with a much lower one.

The easy availability of the secured personal loan is another benefit for consumers. Because
of the low risk that funding a secured loan poses to its lenders, very few applications for a
personal secured loan are turned down.

Another benefit would involve the flexibility of use of the secured personal loan. This type of
loan could be tuned to meet the needs of any financial requirement, be it debt consolidation,
home improvement.

Only when the borrower has adequately provided for its amortization, can the benefits of the
secured personal loan be enjoyed. Therefore it would be smart to make preparations for the
loan repayments from the very beginning, and to choose that mode of loan repayment that
most suits.

Secured Personal Loans are now available in the UK, with a wide pool of lenders, especially
online, so that one could browse and book the best personal secured loan vide the Internet, in
terms of interest rates and other conditions

The Unsecured Personal Loans

This is a loan where

The borrower is not required to pledge any collateral, to secure the loan. It is also called a
Signature Loan, as the only collateral required is the borrower's signature. This loan is based
solely on the borrower's credit, can be utilized for any purpose, and does not insist upon
home ownership and great credit.

Since this instant unsecured personal loans are not been secured on the assets of the borrower,
the creditor has no right to these assets, should the borrower default on repayments.

However, the lender has the right to legal claims to recover his money, which may entail the
borrower having to sell his assets to repay the loan.

As this loan is not secured, and as the lender's risk is consequently high, the rate of interest or
APR would be higher than that charged on a personal secured loan.

The lender just may limit the unsecured personal loan to exclude certain purposes.

Useful Benefits of an Unsecured Personal Loan

There is no requirement of collateral. The borrower is not obliged to pledge his hard earned
assets. Instead, he can take advantage of his credit history.

19
There are no financial statements or no documents of tax returns required. The borrower is
not encumbered with too much paper work if he chooses to opt for instant unsecured personal
loans. That is most lenders of guaranteed unsecured personal loans, offer what is called a
stated loan, where the borrower's information on his financial circumstances need not be
ratified by supporting financial statements or tax returns documents. This is especially
advantageous for those firms or individuals whose reported financial statements are not
necessarily a reflection of their true earnings.

There is no requirement of a business plan for an unsecured personal loan. Traditionally

lenders require an elaborate business plan complete with pro forma's and budget. This
procedure can be both costly and time consuming, with no guarantee of securing loan
approval. But with unsecured personal loans there is no need for a business plan.

Quick approvals-the network of unsecured personal loan lenders would require very little
time to approve the instant unsecured personal loan.

There is an easy application process- most lenders of unsecured personal loans require only a
one-page application.

Therefore we see that all good personal loans are a rare breed, and to be achieved with
persistent effort, tact and patience- be they unsecured personal loans, instant unsecured
personal loans, secured personal loans.

Fast Cash Advance Loan

Sometimes, a person may be in need of a quick payday loan, so that he could meet an
unexpected money crisis. Car repair and other unexpected bills usually occur at inconvenient
times. In case he does not have the extra cash to meet these unexpected expenses, he could
really consider applying for a cash advance.

A Fast Cash Advance Loan:

It is similar to a bank loan only cash advances are a lot easier to qualify for, and enjoy a
shorter term. Chances that the application for a bank loan may be denied are high as banks
have a requirement of sufficient income, a collateral and good credit rating.

It has a two week term. Therefore the loan is due along with the next paycheck. It is required
that the applicant must be at least 18 years of age. The cash advance company would also be
checking out /confirming the salary and employment. While the company is keen to help, it
also wishes to satisfy itself that the loan repaid.

It renders eligibility to receive funds up to a maximum of $1000, with a cash advance. Some
companies allow larger sums to be borrowed.

20
Typically fast cash advance loans are due within the period of two weeks. Taking the
circumstances of the borrower into consideration however, some cash advance companies
would expect that at least half the loan amount will be repaid in two weeks, and the balance
in a month. Such loans are called 30 Day Payday Loans.

But it should be remembered that before taking such a 30 day payday loan, a company must
be chosen that allows for long term loans, and assumption should not be made that all cash
advance companies would give long term cash advance.

Military Personal Loans are easy for servicemen to get anytime. Military jobs involve good
salaries and high status and sometimes these could complicate matters by incurring extra
expenses.

A Military Payday Loan

It is offered by military loan companies to help servicemen to buy a home or a car, or any
other requirement that needs higher costs. These companies offer varying types of loans, for
example, bereavement loan, career service loan, disaster relief loan, that are easy and at the
same time affordable.

It is specifically for men and women of the military and can be got by anybody in the
military, even those with bad credit history.

It Can be easily obtained by vide electronic transfer, after making the application online. This
is one of the biggest advantages- that a military man can get his application wherever he may
be.

A second advantage would be the low rate of interest.

The military man is given the choice of his own repayment schedule. If he cannot repay with
one payday check, then he can do it with successive ones.

If he wants cash instantly, but payday is still far, he can apply for funding of the Instant
Military Payday Loan. Retired army servicemen usually apply for the fast cash loan, and
retired military loans also do not discriminate between ranks of ex servicemen.

Types of Military Loans

There are Different Types of military personal loans and they include

The Disaster Relief Loan : Pioneer Military Lending , for example, helps provide funds (up
to$ 1000 )for military families in times of disaster(Hurricane Katrina for instance), by simply
choosing the option of Red Cross Emergency under the application's space marked for
Purpose of Loan.

21
The Bereavement Loan: This is a 90-day interest -free military personal loan, and which
guarantees approval for those military serving members having family emergencies.

Career Service Loan: These personal loans for military servicemen offers maximum loan
funding of $6500 for those career military servicemen, and for second - enlistment.

Leadership VIP Loan: This loan for military personnel comes with a maximum loan amount
of $ 5000, served at competitive rates of interest for officers of the military.

Premier Loan: This military personal loan provides for maximum funding of $ 7500 and
once again at competitive rates of interest for servicemen and women of the military.

Senior Leadership VIP Loan: This personal loan for the military allows loan funding for up
to a maximum of $10000, which is charged at competitive rates of interest for senior service
members of the military.

Military Loan

To qualify for a Military Loan certain requirements are necessary. Pioneer Military Lending
(an online service) for instance, requires that one must be:

An Active Duty Military Personnel to be able to qualify for a loan for military personnel

A Full Time Active Reserve Personnel

Retired Military Personnel with a 20Year career or

A Department of Defense Military Personnel( GS-6 or above)

Advantages of Personal Military Loans

The big advantage of a payday personal loan for the military is that the military serviceman
can receive the application wherever he is. Many military firms have already commenced the
process of online application service, where the military service member could just download
the application, fill in the form, and then send the filled out application. After approval of the
personal military loan, the cash advance is sent vide electronic funds transfer.

Online applications are secure, and the privacy of the online transaction is ensured. Such
applications are processed with the help of a personal military loan consultant.

Another advantage of these loans for military personnel would include the low interest rate
charged on the loan.

The third advantage is that the military service member is given the option to choose his own
repayment schedule. If he cannot afford to pay it all with one payday check, then the loan
amount can be repaid with the next paycheck.

22
In case the military man is urgently in need of cash, but payday is still far away, he could
apply for an instant military payday loan. This military personal loan is a fast and convenient
method to meet the financial requirements of military men and women, even those who
require bad credit military personal loans.

Military cash loans are available also for the retired armed forces, and not just for active
military men. Retired armed forces servicemen when in urgent need of money, usually apply
for a fast cash loan. Very much like the concept of instant cash payday loans, retired military
personal loans also do not differentiate between the grade and rank of former servicemen of
the military.

No Credit Personal Loans

For borrowers with poor credit history, this sort of No Credit Personal Loan is a blessing.

Though achievable, it should be applied for, only after extensive research.

Though for the first time, this sort of loan treats borrowers with poor credit history on par
with others, there is a very distinct possibility of being duped.

Online, there are several lenders who offer loans with no credit checks. But it would be smart
to first research all free quotes for the same, and read the fine print, before applying for
funding.

It is possible to find lenders who charge reasonable rates of interest, and the borrower must
learn to differentiate between those lenders who charge reasonable rates and those who
charge outrageous ones.

Remember to match and coordinate purpose with loan term. Any loan term that extends
beyond three to five years means that the loan calculations have faltered.

Second Chance Personal Loans

For those individuals who run into unplanned financial crisis, such as a sudden tragedy or any
other financial contingency, a second chance personal loan with poor credit is what is
required.

There are many lending companies that offer a comprehensive package for those persons who
require a second chance personal loan with poor credit. This type of funding can be either
through securing collateral or may be unsecured.

When there is valuable collateral involved, either such as real estate or home accrued equity,
it is always easier to find funding for a second chance personal loan with poor credit. This is
because of the protection that is offered to the lender's investment.

23
While a second chance personal loan is difficult (banks do not like to offer second chance
personal loans with poor credit loans without collateral) but not impossible to achieve, there
are several lenders online that can help provide funding.

Typically a lender who offers second chance personal loans with poor credit will offer higher
rates of interest, shorter repayment terms, and set limits for money to be borrowed.

Short Term Personal Loans

Short Term Personal Loans can be got through banks and online financial companies, and a
wide variety of other sources. With such a Short Term Personal Loan:

The rate of interest involved is usually high. This is because the period of repayment is
usually for a short time. Such types of short term personal loans have to be beneficial to both
the borrower and the lender, and high rates of interest are one of the ways by which a bank or
a financial company stands to benefit.

This type of short term funding is often utilized to help individuals who are in need of
varying sums of money for a short period. Many of the lending companies usually provide for
such a loan, and also stipulate the maximum amount of money that can be borrowed under
such a circumstance.

Banks, while giving this type of short term personal loan, usually require collateral, before
disbursing the same. Online financial companies only require a credit check, but lend very
small sums of money. Banks do not offer more than $15, 000 or $20, 000 dollars as well, and
individuals seeking larger sums of money, would have to tap other sources for funding.

Because of the negative and positive aspects of short term personal loans, it is recommended
that the individual does his research thoroughly, before he applies for funding .

4.3 PERSONAL LOAN FEATURES

HDFC bank offer a range of features and benefits on personal loans.

The key features of personal loans include customisation of personal loans, and special
interest rates on personal loans for existing HDFC Bank customers. You can also transfer
your existing personal loan to HDFC Bank.

There are several benefits of personal loans from HDFC Bank. You can get in touch via SMS,
online chat or phone banking, and check your personal loan eligibility online in just 60
seconds. Additional personal loan benefits include personal accident cover and personal loan
security.

Stay Protected

Personal Accident Cover : For a nominal premium* you can avail of Personal Accident cover
of up to Rs. 8 lakhs, and Critical Illness cover of up to Rs. 1 lakh. The premium for these

24
policies will be deducted from the loan amount at disbursal. Applicable taxes and
surcharge/cess will be charged extra.

Personal Loan Security:

Secure your personal loan with Sarv Suraksha Pro,key benefits includes:

 Credit Shield Cover equal to the outstanding loan amount

 Accidental Hospitalisation cover of up to Rs. 8 lakhs
 Accidental Death/Permanent Disablement cover of up to Rs. 1 lakh. The policy is
offered by HDFC Ergo GIC Ltd.

Fulfil Your Every Need

No matter what your needs, HDFC Bank can customise a Personal Loan for you. Existing
HDFC Bank account holders can avail of our special offers, interest rates and charges. First-
time Loan customers can also avail of a host of benefits.

Transfer Loan Balance with Ease

Transfer your existing Personal Loan to HDFC Bank. Enjoy lower EMI’s and SAVE on your
interest paymentsInterest rates as low as 11.39%* on the existing loan transferFlat processing
fee of only Rs. 1999*To transfer your loan balance, apply now.

Quick Eligibility Check & Disbursal

Check your Personal Loan eligibility online or at select branches in just 60 seconds. Once all
your papers are submitted, the loan will be disbursed in just one working day.

Convenient Borrowing

For any help with your loan, you can reach out to us via SMS, Webchat, Click2Talk and
PhoneBanking.

4.4 How to apply for a personal loan

Step 1: Enquiry with a financier:

The first step is to get in touch with a lender. It is required to get in touch with as many
lenders as possible and get them to make loan offers. Then negotiate with them to get the best
interest rate . Check if there are any special offers.

25
After getting all the banks to make their offers, select the lender based on the information
given.

Step 2: Documents Collection

After finalizing the lender, the lender's direct selling agent will visit and collect documents
supporting proof of income, residence proof, and identity. It may be required to produce
copies of IT returns, salary slips, bank statements, ration card, passport, driving licence, and
other relevant documents. These requirements vary from lender to lender.

Step 3: Field Investigation Agency Representative Visit

After submitting the documents, a field investigator will visit home to double check the facts
provided in the documents, such as the place of residence, tenure at work place and so on. It
is essential to be present during this visit; otherwise the investigator could report that the facts
provided do not actually add up, thus forcing the lender to reject the loan application.

Step 4: Loan approved

Once the lender is satisfied with the veracity of the documents provided, the loan is approved.
The lender then disburses the amount through cheques or demand drafts (DD).

4.5 DOCUMENTATION -
Compared to other types of loans, personal loans requires to produce the least number of
documents. The necessary documents required can be classified into three: documents
supporting identity, residence and income.

Identity Proof:

A copy of any of passport or driving license, voters ID, PAN card, credit card with
photograph, or employee ID card with photograph. Any one of the above documents with
photograph is proof that he is the same person as profess to be.

Proof of Residence:

A copy of passport, ration card, or voters ID if he reside at the same place as entered in the
above-mentioned documents. If he is staying as a tenant on rent, in a place different from
where he have been issued the ration card, passport, or voters ID, he can produce utility bills
(electricity or telephone) of the place as proof of residence.

Income proof

The proof of income for salaried individuals differs from that of self-employed individuals.
Salaried people need to submit their latest salary slip, form 16 for the last financial year, and
their bank statement for the last 6 months. Self-employed people need to provide their IT
returns for the last 2 years, balance sheet, and profit & loss account as proof of income.

26
 To conclude the following documents are required along with your Personal Loan
application:

 Identity proof (copy of passport/voter ID card/driving license/Aadhaar)

 Address proof (copy of passport/voter ID card/driving license/Aadhaar)

 Bank statement of previous 3 months (Passbook of previous 6 months

 Latest salary slip/current dated salary certificate with the latest Form 16

Prime Consideration before Applying a Loan

Remember to always borrow in a responsible manner. Never borrow more than it can be
repaid.

Indulge in some serious shopping to seek the best rates for personal loans. By comparing the
best rates for personal loans and for unsecured personal loans, a comprehensive idea of the
choices offered would be got, before signing the credit agreement.

Always remember to read the small print, before actually taking the step to sign on the dotted
line. Whether opting for a personal loan , or a secured loan, and are actively seeking
unsecured personal loan best rates, or the best rates for personal loans, it should be checked
first if there are provisions for :

An early repayment fee where a redemption fee is charged if loan is repaid before the end of
its term ( sometimes the fee could be as much as two month's interest, which would
considerably add to the cost of your personal loan )

An arrangement fee for purposes of setting up the loan.

For a break or deferment period where it is exempt from making the repayment for a specific
period of time on account of some difficulty in repayment. However the interest accrued
during this break period is still payable, and could be added to the outstanding loan balance.

4.6 CHARGES APPLICABLE BEFORE AND AFTER THE PERSONAL LOAN

-
Very often we fail to read the fine print in a loan document. The real cost of personal loan is
visible only when factor in numerous other charges levied. If intend to make comparisons
with other types of loans, it is necessary to take into account these charges to arrive at the real
cost. For example, the processing fee or prepayment fee in the case of a personal loan will be
different from that of a loan against property.

27
Here is a list of all charges that are levied either before the loan is disbursed or through the
course of the loan or when the loan is terminated:

Description of Charges:

Processing fee

Prepayment fee

Charges for late payment (loans)

Cheque bounce charges

Duplicate statements charges

Documentation charges

Service tax

Processing fee:

Processing fee is the amount charged by banks to cover the cost of processing the loan
application. Processing fees vary from one bank to another. Some banks ask to pay the
processing fee upfront even before the loan is sanctioned. This is often charged when loan
application is submitted along with the supporting documents.

The processing fee is generally a percentage of the loan amount and is between 1-2 percent
for personal loans. Some banks levy a flat charge of Rs 1000 or Rs 2000 upfront, and then
deduct the balance processing fee (if any) from the loan amount before disbursal.

The processing fee is non-refundable. Some banks say the processing fee will be refunded if
the loan is not sanctioned. It is recommended to take this in writing from the bank as
technically, processing fee is non-refundable.

Pre-payment fee:

The pre-payment fee is the penalty paid by the borrower for foreclosing the loan before the
actual tenure. Pre-payment fees are levied as a percentage of the outstanding principal of the
loan amount. The pre-payment fee varies from bank to bank. It varies from 2-5 percent of the
outstanding loan amount, if the repayment amount exceeds 25 percent of the outstanding loan
amount.

Charges for late payment:

When the monthly installment (EMI) towards repayment of a loan is delayed the bank
collects the installment along with late payment charges. The late payment charge is also
known as the delayed payment charges or the overdue payment charges. Late payment
charges are fixed at the time of signing the loan contract.

28
This is chargeable you make the payment after the due date. Late payment fees range from 2-
3 per cent of the EMI.

Cheque Bounce Charges:

Cheque bounces mean that a cheque has been presented for clearance, but the amount written
on cheque exceeds that available balance in the account. It is often colloquially referred to as
a bounced cheque. Business frequently use the term dishonoured cheque. If post-dated
cheques are given to the bank to debit the EMI from the customers account, it is to be ensured
that there are sufficient funds in the account every month. If a single cheque bounces, the
bank charges anything from Rs 250 to Rs 500 as penalties.

Duplicate statements charge:

When the loan is sanctioned, the lender gives the customer a statement detailing the
repayment schedule. If he loses it, he can request the bank to issue a duplicate statement. The
statement indicates the balance loan amount and the remaining EMIs. Banks charges
anywhere between Rs 100 to Rs 500 for issuing duplicate statements.

Documentation charges:

Banks levy documentation charges towards the various documents provided towards the loan
application. Many banks employ third-party vendors to do the document verification. The
expense on this account is usually passed on the customers, which ranges from Rs 500 or Rs
1000.

Service tax:

Service tax is a tax levied on service providers who have annual revenue of more than 8 lakh.
Banks loans too fall under the purview of service tax. service tax is charged at the rate of
12.36 per cent.

4.7 PERSONAL LOAN : ELIGIBILITY CRITERIA :-

The person eligible for a personal loan are a salaried individual, self-employed individual
(own business), or a self-employed professional (doctor, lawyer, etc.). Other factors such as
income, age, residence, work experience, repayment capacity, past obligations and place of
work are also taken into account. A personal loan can be used for any purpose provided it is
legitimate; the end use of the lender need not be mentioned.

29
The following people are eligible to apply for a Personal Loan:

 Salaried doctors, CAs, employees of private limited companies, employees from

public sector undertakings, including central, state and local bodies

 Individuals between 21 and 60 years of age

 Individuals who have had a job for at least 2 years, with a minimum of 1 year with the
current employer

 Those who earn a minimum of Rs. 15,000 net income per month (Rs. 20,000 in
Mumbai, Delhi, Bengaluru, Chennai, Hyderabad, Pune, Kolkata, Ahmedabad,
Cochin)

Personal Loan: Eligibility Criteria: Basics

Personal Loan eligibility calculator

Calculate the personal loan amount likely to get from the lender.

Personal Loan Eligibility Calculator for Self-Employed

If self-employed, this calculator will tell the amount of personal loan one likely to get.

Personal Loan: Interest Rates:

Interest rates charged on personal loans vary across various banks. There are primarily 3
kinds of interest rates, most commonly offered by banks are:

Fixed interest rate

Floating interest rate

Flat rate

Of the rates offered, flat rates can be considered the most expensive as in other cases, the
reducing balance method is used for calculation.

30
4.8 PERSONAL LOAN RATES AND FEES
HDFC Bank offers competitive rates of interest on personal loans. If you are an existing
customer, you can enjoy additional benefits on interest rate on your personal loan. Find out
more about HDFC Bank’s personal loan interest rates, along with personal loans fees and
charge below.

Enclosed below are HDFC Bank Personal Loan Interest Rates & Charges :-

Fee Amount to be Paid

Rack interest rate Salaried - 15.00% TO 20.99 %

Up to 2.50% of the loan amount subject to a

Loan processing charges minimum of Rs. 1,999/- & Maximum of Rs. 25000/-
for Salaried Customers.

Salaried - No pre-payment in part or full permitted

until repayment of 12 EMIs
Prepayment in Part or full
(Refer FAQ section for detailed
Part Payment allowed up to 25% of Principal
terms)
Outstanding. It is allowed only once in a financial
year and twice during Loan tenure.

Pre-payment charges
Salaried - 13-24 Months - 4% of Principal
(on PrincipalOutstanding) /
Outstanding,
25-36 Months - 3% of Principal Outstanding
Part Payment Charges
>36 Months - 2% of Principal Outstanding
[on Part Payment amount]

31
No Due Certificate/No
NIL
Objection Certificate (NOC)

Duplicate of No Dues
NIL
Certificate/NOC

Solvency Certificate Not applicable

Charges for late payment of 2% per month on EMI / Principal overdue subject to
EMI the a minimum amount of Rs. 200/-

floating rate Not applicable

Charges for changing from

Not applicable
floating to fixed rate of interest

Stamp duty & other statutory

As per applicable laws of the state
charges

Credit assessment charges Not applicable

Non standard repayment

Not applicable
charges

Cheque swapping charges Rs 500/-

Amortization Schedule charges Rs 200/-

NIL (However client would be charged interest for

the interim period between date of loan
Loan cancellation charges
disbursement and loan cancellation and processing
fees would be retained.)

Cheque bounce charges Rs. 550/- per cheque bounce

Legal/incidental charges At actual

32
Rates offered to customer during the period of April 2018 - to June 2018.

IRR Q I (2018-19)

Min IRR 10.90%

Max IRR 21.27%

Avg IRR 13.04%

Annual Percentage Rate offered to customer during the period of April 2018 - to June
2018.

APR Q I (2018-19)

Min APR 10.91%

Max APR 25.26%

Avg APR 13.26%

4.9 LOAN PROCEDURE :-

HDFC bank adopt following procedure for loan :-

Submit the Application

Appraisal of Loan

Documentation

33
 Convene to loan applicant

To Issue Draft or Pay order

1. Submit the Application: -

First of all the loan borrower should submit application to the particular bank. The borrower
is required to fill out a common application form, which seeks comprehensive information
about proprietor’s and loan borrower’s back ground and his business network and as well as
his cost of project and economic consideration.

2. Appraisal of Loan: -

The bank follows good appraisal system for effective lending and to make easy repay in
future way. The main task of the lending bank is to make sure that the income generated from
the loan is sufficient to repay the loan installments according to the terms and conditions of
amortization. The risk involved in term lending is much more than the risk in short-term
lending because the loans are given to new undertaking, or for the modernization and
expansion of existing undertaking and for loan period.

Before sanctioning any loan a banker should assure himself that the borrowing concern shall
be able to earn sufficient income to pay the loan installments. The methods of analysis and
standard to be adopted for an appraisal of loan are more similar to investment decision than to
short-term lending. The appraisal of loan included projection of future trends of output, sales
estimated of costs, returns and flow of funds. It is extremely difficult to have a clever cut
formula for the appraisal of term loan since many factors have to be considered such as the
type of borrowing bank and its activities, the markets potential, its management, and financial
position. The amount of loan and the period of its repayment. Another important factor is
whether to give weight age to profitability or to its broad economic significance in the
development of the economy.

A term loan may be appraised by considering four different aspects of the proposal. They are:

a. Technical feasibility

b. Economic feasibility

c. Managerial competence

34
 d. Financial feasibility

3. Documentation: -

After completing the step of submit the application and appraisal system of loan. Then loan
applicant should collect the document for borrowing loan, every documents and requirement
are needed according to the co-operative bank rate. If the loan applicant wants to borrow loan
of huge amount, so at a time strong documents are presented by loan applicant against bank
like evident of shareholders, original and photocopy of property’s documents, photocopy last
three years income tax returns file, etc. if loan applicants has no any recommendation from
share holder so firstly the bank becoming share holders of his bank by issuing share to them,
so above types of documents are used to borrow loan and advances from the bank.

4. Convene to Loan Application: -

After collecting the necessary documents, an officer of the recipient bank review it to
ascertain whether it is complete for processing, when the application is considered complete.
Then the co-operative bank held meeting of his loan applicant and sanctioned the particular
loan. Generally this meeting is convened on Monday and Thursdays in every week.
Otherwise expected it in other contingent situation and gives date, day and time for delaying
particular meeting.

5. To Issue Draft or Pay order: -

At the last stage is that, after convening of loan applicant and sanctioning loan, borrower
should pay its stamp duty, margin and one installment of loan, then in the stamp document or
stamp procedure. Then bank gives to them pay order or draft. If the any loan borrowers want

to purchase machinery or vehicle from out of city so he need quotation of that particular
company, and finally bank made draft of company’s name otherwise if the quotation of city
area so at a time the co-operative bank made pay order of company’s name. Them it gives to
company through loan applicant.

Thus above procedure is followed by the loan applicant, who wants to borrow loan from
banks and satisfied his goal or objectives.

35
 5. RESEARCH METHODOLOGY
5.1 RESEARCH DESIGN AND METHODOLOGY
For any research, research design is of immense importance as it facilitates the smooth sailing
of various research operations. The method adopted by the researcher for completing the
project is called Research Methodology. In other words, Research Methodology is simply the
plan of action for a research which explains the detail, how data is to be collected, analyzed
and interpreted. Data becomes information only when a proper methodology is adopted. Thus
we can say methodology is a tool which processes the data into reliable information.

5.2 SCOPE OF THE STUDY

As the competition level in the banking sector is ever increasing, it becomes indispensable for
the company (HDFC) to conduct the study on the perception and satisfaction level of its
customers. This study will help the company in making its new strategies to satisfy its
customer in the ways in which he or she wants to be satisfied and to the company its position
in the market. The study on customer satisfaction has the geographical coverage limited to
White Field area and Indira Nagar only. This study will help the company to know in detail
about the customer perception and their attitude towards the company services and products.
The company will gain the feedback from the customer to improve its products and quality of
service.

5.3 METHODS USED FOR DATA COLLECTION ARE :-

1) Primary Data 2) Secondary Data

Primary data:

Primary data are datas, which are original in nature, and are collected by the researcher. The
method used to collect the primary data was Survey Method. The survey method included a
structured questionnaire that was given to the respondents.

Secondary data:

36
Secondary data are data, which has been collected and compiled in advance for another
needed purpose. Secondary data is an important method to know the present problem faced
by the account holders in the field of HDFC Bank. Newspapers, articles, books, magazines
etc. have been used to prepare the questionnaire.

5.4 TOOLS FOR DATA COLLECTION

The tool used for data collection is Primarily “Questionnaire method”.

The questions contained:

a) Open-Ended Questions- Where the respondent was given a chance to reply or give
suggestions to the Company. This included Free Responses questions where the respondents
were given the freedom to give suggestions.

b) Close-Ended Questions- Where the respondent was given a lesser chance to reply. This
includes Multiple Choice Questions where the respondents were given a number of
alternatives.

5.5 SAMPLING METHOD USED:

Non probability sampling, i.e., convenient sampling method was used to select a sample of
100 customers among the customers of the HDFC Bank.

5.6 SAMPLE SIZE:

Sample size of 100 customers are taken from the Boat Club branch of HDFC Bank.

5.7 SAMPLING METHOD USED :

Random sampling method was used to select a sample of 100 customers among the
customers of HDFC Bank.

5.8 SCALE:
Respondents were given a scale whose positions range from ‘Highly Satisfied´ to ‘Highly
Dissatisfied´

37
5.9 AREA OF SURVEY:
The area selected to find the satisfactory level was in and around Boat club road,Pune.

6. DATA ANALYSIS

The study on customer satisfaction has the geographical coverage limit to Boat Club Road
,Pune only. This study will help the company to know in detail about the customer perception
and their attitude towards the company services and products. The company will gain the
feedback from the customer to improve its products and quality of service.

6.1) TABLE SHOWING DISTRIBUTION OF AGE -

AGE GROUP NO. OF RESPONDENTS PERCENTAGE

20-30 22 22%

30-40 43 43%

40 and above 35 35%

Total 100 100%

ANALYSIS –

The above table shows that-

38
22% of the respondents fall under the age group of 20 - 30 years,

43% of the respondents fall under age group of 30 - 40 years and

35% of the respondents belonging to age group of 40 and above years.

INFERENCE -

Hence it clearly shows that he majority of the respondents fall under the age group of 30 - 40
years i.e. 43%.

6.2) TABLE SHOWING DISTRIBUTION OF GENDER

GENDER NO. OF RESPONDENTS PERCENTAGE

FEMALE 43 43%

MALE 57 57%

TOTAL 100 100%

39
ANALYSIS –

The table shows that there are – 57% of male respondents

43% of female respondents

INFERENCE-

Thus the table clearly shows that the majority of the respondents are male i.e. 57%.

40
6.3) TABLE SHOWING THE DISTRIBUTION OF THE MONTHLY SALARY

ANALYSIS-

The above table shows that there are no respondents who have a monthly net take home
salary of less than Rs 15,000; there are 23% of the respondents who fall under Rs 15,000 - Rs
30,000 household income and 77% fall under the more than Rs 30,000 net take home salary

41
category.

INFERENCE -

The table clearly shows that the majority of the respondents have more than Rs 20,000 of
monthly net take home salary that is 77%.

6.4) THE IMPORTANCE OF THE INTEREST RATE ACCORDING TO THE

CUSTOMERS-

42
ANALYSIS -The above table relates that the 65% of the respondents think its extremely
important for the interest rate to be convenient, 20% of the respondents think it is somewhat
important, 15% of the respondents think its not so important while none of them think its not
at all important.

43
INFERENCE-

Table number 7 clearly shows that majority of the customers think that it is very 42
important that the interest rate are convenient i.e. 65%.

6.5) THE IMPORTANCE OF PROCESSING FEES AND TIME IN HDFC

BANK ACCORDING TO CUSTOMRES

ANALYSIS –

From the above table it can be analyzed that out of 100 respondents 10% are highly satisfied
with the processing fees & time of the bank, 62% are satisfied, 23% are neutral, 5% are
dissatisfied and none are highly dissatisfied.

44
INFERENCE –

Therefore, it can be inferred that almost 5% of the respondents are not happy with the
processing fees & time.This indicates that the customers are not satisfied with the processing
fees & time

6.6)TABLE SHOWING SIZE OF THE EASY MONTHLY INSTALLMENT-

45
ANALYSIS –

The table shows that according to 30% of the respondents it is very important that the size of
the EMI is appropriate, 45% of the respondents think it is somewhat important, 20 % of the
respondents said it is not so important while 5% of the respondents replied that it is not at all
important.

46
INFERENCE-

Hence the table clearly shows that the majority of the respondents think it is somewhat
important for the EMI to be appropriate.

7. SUMMARY OF FINDINGS

1. Most of the customers of the bank are satisfied, but there is a minority of customers who
are still looking for improvement.

2. The bank has strong customer relationship, whether it is customer service or post sales
service, HDFC Bank serves the customer well.

3. However the bank timings are not very convenient for the customers. Hence, flexible
banking hours shoud be adopted to meet customers requirements.

47
4. When it comes to the processing fees & time , it shows mix response. More customers
would prefer a change in the. processing fees & time.

5. The only drawback that HDFC bank has in compare to other banks is only regarding the
interest rates which is considered to be low in comparison to other bank. While most of
the banks charges high monthly installment for the repayment of loan with compare to
HDFC bank.

6. Enable customers to get personal loan easily and provide variety of other banking
scheme to the personal loan customer .

48
8. CONCLUSION

49
It is important in today’s competitive world to create loyal customers and retain them. Hence

customer service is an area where every organization put emphasis on. The quality of

products along with the quality of services influences customers to choose a particular bank.

HDFC Bank, as its punch line says, ‘we understand your world’, is the largest private sector

bank in India which has shown tremendous growth in the past couple of years .Its customer

centric focus and aim to satisfy every customer with wide range of products and services as

mentioned in the report has helped the bank to have an edge above its competitors.

50
9. RECOMMENDATIONS-

51
1. The processing time which is now 10 days , must be reduce to 9 days ,so more and more
people can apply for the urgent loan for unforeseen calamities

2. Scheduling regular promotional activities like canopies, company visit etc. to know the
more and more people about the loan facilities based on their salary i.e. ³Personal Loan´.

3. More number of scheme is provided to the current salary holder cutomer with HDFC Bank
with different features .

4. Proper and general instruction about the product with latest changes and working provides
to the executive .

5. The interest rates made to be more liberal to cutomer to customer on the basis of their
salary and company profile .

6. The process of funding the loan needs to be more simple so that the customer can
understand the product according to their needs.

7. There should be more executive especially inbig and crowded branches in the main part of
the town.

52
8. Special schemes should be provided for small scale sector business employees as well new
package of offers and discounts should be provided for high network people

53
 10. BIBLIOGRAPHY

BOOKS AND MAGAZINES

Marketing Management- Philip Kotler

India Today

In-house journals

JOURNALS :

HDFC bank universe

. Internal reports

Presentation material

Brochures

WEBSITES:

54
 www.hdfcbank.com

www.google.co.in

www.icicibank.com

www.citibank.com

www.utibank.com

NEWSPAPERS

The Times of India

The Economic Times

Business Standard

55
56
 11.ABBREVIATIONS

HDFC – Housing Development Finance Corporation .

57
58
 12.ANNEXURE

12.1 Questionnaire
1. Name ______________________________________

2. Age

o 20-30
o 30-40
o 40 <

3. Gender

o Male
o Female

4. Marital Status

o Married
o Single

5. Net Salary Level

o < Rs.15, 000

o Rs.15, 000-Rs 30, 000
o < Rs.30,000

59
6. How important is it for an employee to greet you with a smile?

o Very important
o Somewhat important
o Not so important
o Not at all important

7. How important is the Easy monthly Installment to you?

o Very important
o Somewhat important
o Not so important
o Not at all important

8. How important are the bank Interest Rates according to you?

o Very important
o Somewhat important
o Not so important
o Not at all important

9. How important are the benefits and facilities provided by HDFC for personal loan to you?

o Very important
o Somewhat important
o Not so important
o Not at all important

10. What is your level of satisfaction with respect to the executive services of the bank?

o Highly satisfied
o Satisfied
o Neutral Dissatisfied

60
11. What is your level of satisfaction with respect to customer care measures undertaken by
the bank?

o Highly satisfied
o Satisfied
o Neutral Dissatisfied
o Highly dissatisfied

12. What is your level of satisfaction with respect to the quality of overall service provided by
the bank?

o Highly satisfied
o Satisfied
o Neutral Dissatisfied
o Highly dissatisfied

13. What is your level of satisfaction with respect to special schemes offered by bank?

o Highly satisfied
o Satisfied
o Neutral Dissatisfied
o Highly dissatisfied

14. What is your level of satisfaction with respect to the response time for grievance
handling?

o Highly satisfied
o Satisfied
o Neutral Dissatisfied
o Highly dissatisfied

15. What is your level of satisfaction with respect to the tenure period for the loan provided
by the bank?

o Highly satisfied
o Satisfied

61
 o Neutral Dissatisfied
o Highly dissatisfied

12.2 FAQ

Qu.1 What are the benefits of having a Salary Account for my Personal loan?

Ans.1 You get preferred interest rates, priority processing and simpler documentation if you
have a Salary Account with HDFC Bank. This is taken into account at the time of disbursal of
the loan. You can pay through Standing Instructions to debit your HDFC Bank account with
the EMI amount

Qu.2 How much loan can I avail of?

Ans.2 You can avail of a loan from Rs 50,000/- to Rs 15,00,000/- depending on your income
and repayment capacity. You can club the income of your spouse if you wish to increase your
loan amount

Qu.3 How do I repay my Personal loan?

Ans3.You pay the loan in equated monthly installments. The loan will be paid through
postdated cheques or through Standing Instructions to debit your HDFC Bank account with
the EMI amount. Calculate how much you will repay each month

Qu.4 What security do I need to provide to obtain this loan?

Ans4. To obtain the loan, there is absolutely no need to provide any security or collateral

Qu.5 What are the loan tenure options?

Ans5.You can repay your loan over a period of 12 to 60 months

62
Qu.6 How long will it take for me to get my loan?

Ans6.Once you submit your application form and supporting documents, we shall give
approval within 72 hours provided everything is in order. All loan approvals are at the sole
discretion of the bank.

Qu.7 Can I repay the loan earlier?

Ans7. You can choose to repay your loan anytime after 6 months of availing the loan at a
maximum pre-payment penalty of 4% of the principal outstanding on your loan.

63