A COMPARATIVE ANALYSIS ON HOME LOAN BY VARIOUS FINANCIAL INSTITUTIONS

  A COMPARATIVE ANALYSIS ON HOME LOAN BY VARIOUS FINANCIAL INSTITUTIONS

INTRODUCTION:

Housing is one of the basic needs of human beings and it is essential as food and clothing. The problem of housing has been of great importance ever since the evolution of mankind. It is viewed not only as a basic need, but an instrument of change to generate income, provides safe living and increase productivity. The house plays a significant role in the socio- psychological development of individuals. Housing has a vital bearing on the health and status of people. Proper accommodation is an important indicator of the standard of living of people. A house is a permanent shelter to protect human beings from the vagaries of nature. Now housing is a symbol of social prestige and an indicator of the social status. It provides aesthetic contentment, emotional and mental satisfaction, comfort and safety. The home gives shelter from natural dangers like rain, wind, snowfall, flood, heat etc. Home is a place where persons feel happy and spend their time with loved ones. Since home life affects the very foundation of an individual's life, it has top priority for most people, regardless of their income levels (Report on Trend and Progress of Housing in India,2014). Housing has great social importance. It is one of the basic human entitlements which connect people with the society. The social quality of life is more or less reflected in the state of its housing. The indirect impact of housing is in terms of improved habitat living, educational, social and cultural standards leading to human capital formation. The house value is important collateral for contracting other loans, that improve the earning and repayment capacity of borrowers (Report on Trend and Progress of Housing in India, 2013).

 

HYPOTHESIS:

A Research hypothesis is a specific, clear, and proposition or predictive statement about the possible outcomes of a scientific research study based on a particular property of a population, such as presumed differences between groups on a particular variables or relationships between variables.

There are basically two types, namely;

• Null Hypothesis (H0)

• Alternative Hypothesis (H1)

 NULL HYPOTHESIS(H0):

A Null hypothesis is a type of hypothesis used in statistics that proposes that there is no difference between certain characteristics of a population or data generating

process.

ALTERNATIVE HYPOTHESIS(H1):

Alternative hypothesis is one in which a difference between two or more variables is anticipated by the researchers: that is, the observed pattern of the data is not due to a chance occurrence. The concept of the alternative hypothesis is a central part of formal hypothesis testing.

H0: P = 0

H1: P ≠ 0

Significant level 95% _ 5% = 0.05

Significant level 99% _ 1% = 0.01

The p value of below 0.05 null hypothesis H0 is rejected. Otherwise, alternative hypothesis H1 is accepted.

CONCLUSION:

To occupy a home is one of the major decisions a person to take during the early years of his life. Housing loan is supportive to fulfil the dream comes true. Taking a home loan is a long journey which involves many stages. The key to getting a home loan in a smooth way is being familiar with the entire home loan process. The amount decided to borrow should be based on level of income, down payment, job security, previous loan liability and repayment capacity of the borrower. Prospective borrowers should make financial planning about the payment of EMI, processing fees, loan tenure etc. They should be aware of the different types of home loans available in the market. Applicants of home loan should be aware of the types of interest offered by banks and the modes of repayments.

In summary we can conclude that both public sector and private sector banks truly deserve to be the leading banks in home loan sector. The services offered by them are very competitive. Mostly people prefers public sector banks for home loans, especially because they believe that it is more secure bank and interest rate is lower. On the other hand the private sector banks are coming daily in our country and the preference of younger population is changing because of services & facilities provided by them. Private sector banks are very fast and lots of time they make things easy for borrower and also bends some rules for home loans but on the other hand public sector banks rules are very strict and stringent. The documents needed for home loan by private sector banks are also less as compared to public sector banks. It was found that private sector banks are very popular among the customers these days. The satisfaction level that customer have with these banks is very high in comparison to public sector banks. Customer are associated with banks for many services that they require on regular basis and people tend to prefer banks which provide better facilities and convenient banking. From the overall analysis it can be said that the satisfaction level in relation to the services provided by private sector banks are very high as compared to public sector banks. Different banks offer same product but their services differentiate and the bank has gone for in this direction. The customer can choose these schemes which he feels is good for him and have the capacity to repay it on that specified time period.