INDEX

Sr. No. Name of Chapter Page Numbers

1. Introduction 02 to 20

2. Review of Literature 21 to 26

3. Research Methodology 27 to 31

4. Data Analysis & Interpretation 32 to 48

5. Findings, Conclusions & Suggestions 49 to 52

Appendices:
Bibliography 53 to 54
Questionnaire 55 to 57
 CHAPTER-1
INTRODUCTION
Personal loan is a simple hassle free process of acquiring personal finance with minimal
documentation and within quick time. The bank will require the borrower’s documents
regarding the proof of identity, residence along with income proof / ITR of last 2 years to
initiate the process for loan sanction. After verifying the documents and checking the
borrower’s credit score with Credit Information Bureau (India) Limited commonly known as
CIBIL, the bank may decide whether to approve or reject the personal loan. Normally bankers
will consider whose CIBIL score is equal or more than 700.

An incorporated monetary foundation is especially fundamental in fortifying and maintaining

monetary development for any nation. A well working monetary division encourages
proficient intermediation of money related assets. 'The more effective a money related
framework is, in asset era and in its portion, the more noteworthy is its commitment to
monetary development. 'The exchange of assets by acquiring and loaning is critical to any
economy. Without these exchanges the level of monetary movement cannot be supported;
work and salary cannot be created.

Many individuals are having buying power now and need the utilization to be delayed to
future which is conceivable through savings .Other individuals who hope to have buying
power in future need it to be progressed which is conceivable through borrowings. To begin
with classification expects some reward for such deferments and the second classification is
set up to pay some cost for such headway. Here emerges the budgetary market to satisfy the
requirements of both the classifications. In this way, money related market assumes a
noteworthy part in the preparation and portion of investment funds.

Banks are the most important service institutions in the economy of any country. Especially,
in the Indian economy it plays catalytic role in the socio-economic development since
independence. It includes not only public sector but also private sector banks. After banks
nationalization (1969 and 1980) banks have changed from class banking to mass banking.
Before nationalization of commercial banking in India, all private sector banks were dealing
with banking business based on business approach and opened their most of branches were
opened in the urban areas. But now their approach has been changed and many banks are
opening their branches were opened in the rural areas. According to RBI3, there are all
Scheduled Commercial Banks (SCB) in India are providing banking services through 71,998
offices (61301 offices of public sector banks, and 10387 offices of private sector banks) and
their 9,44,620 employees as on March 2010. Deposits of all SCB were increased from `
21,64,682 to ` 47,52,456 crore, Advances and advances have increased from ` 15,16,811 to `
34,97,054 crore, Business per employee has increased from ` 419.80 lakh to ` 873.32 lakh and
Profit per employee has increased from ` 2.80 lakh to ` 6.05 lakh in year 2005-06 to 2009-10.
It is evidenced that, Indian banking sector is growing significantly during post reform period
with novelties and inclusiveness.

The historical backdrop of Indian Banking demonstrates that seeds of keeping money in India
were sown back in the eighteenth century when endeavors were made to 3 build up the
General Bank of India and Bank of Hindustan in 1786 and 1790 individually. Later some
more banks like Bank of Bengal, Bank of Bombay and the Bank of Madras were set up under
the contract of British East India Company. These three banks were converged in 1921 and it
shaped the Imperial Bank of India, which later turned into the State Bank of India. The period
in the vicinity of 1906 and 1911 seen the foundation of banks, for example, Bank of India,
Bank of Baroda, Canara Bank, Corporation Bank, Indian Bank and Central Bank of India;
these banks have made due to the present.

PRIVATE BANKING SECTOR:

Private Sector Banks are those Banks which are owned by the private players. The private
sector played a strategic role in the development of joint sector bank’s reforms in India. In
1951, there were in all 556 private sector banks, of which 474 were nonscheduled and 92
were scheduled. Since then, the number of public sector banks is increasing while those of
private sector banks are decreasing. Private sector banks include Indian and foreign banks.

The private-sector banks in India speak to some portion of the Indian banking area that is
comprised of both private and open area banks. The "private-division banks" are banks where
larger parts of stake or value are held by the private investors what's more, not by
government. Managing an account in India has been ruled by open division banks since the
1969 when every single real bank was nationalized by the Indian government. However since
progression in government managing an account approach in 1990s, old and new private
division banks have re-developed. They have become speedier and greater over the two
decades since advancement utilizing the most recent innovation, giving contemporary
developments and financial instruments and systems. The private banks are part into two
gatherings by monetary controllers in India, old what's more, new. The old private part banks
existed preceding the nationalization in 1969 what's more, kept their autonomy since they
were either too little or master to be incorporated into nationalization. The new private part
banks are those that have picked up their keeping money permit since the advancement in the
1990s.

Then from the early 1990s, RBI's liberalization policy came in picture and with this the
government gave licenses to a few private banks, which came to be known as new private-
sector banks. The financial liberalization literature assume that the removal of repressions
policies will allow the banking sector to better perform its functions of mobilizing savings and
allocating capital what ultimately results in higher growth rate. If India wants to achieve its
ambitious growth targets of 7-8% per year as lined out in the common minimum programmer
of the current government, a successful management of the systematic changes in the banking
sector is a necessary pre-condition. The year 1991 marked a decisive changing point in India’s
economic policy since independence in 1947. Following the 1991 balance of payment crisis,
structural reforms were initiated that fundamentals changed the prevailing economic policy in
which the state was supposed to take the commanding heights of the economy. After decades
of far reaching 74 government involvement in the business world, known as ‘The mixed
Economy’ approach, the private sector started to play a more prominent role.

There are two categories of the private-sector banks: "old" and "new". The old private-area
banks have been working since quite a while and might be alluded to those banks, which are
in operation from before 1991 and each one of those banks that have initiated their business
after 1991 are called as new private division banks. Housing Development Finance
Corporation Limited was the main private bank in India to get permit from RBI as a piece of
the RBI's advancement strategy of the keeping money division, to set up a bank in the private-
segment banks in India.
EVOLUTION OF HDFC BANK:

The HDFC Bank was consolidated on August 1994 by the name of 'HDFC Bank Limited',
with its enlisted office in Mumbai, India. HDFC Bank initiated operations as a Scheduled
Commercial Bank in January 1995. The Housing Development Finance Corporation (HDFC)
was among the first to get an 'on a basic level' endorsement from the Reserve Bank of India
(RBI) to set up a bank in the private segment, as a component of the RBI's progression of the
Indian Banking Industry in 1994. HDFC Bank is headquartered in Mumbai. The Bank at
present has an enviable network of over 1416 branches spread over 550 cities across India.
All branches are linked on an online real– time basis. Customers in over 500 locations are also
serviced through Telephone Banking. The Bank also has a network of about over 3382
networked ATMs across these cities.

On May 23, 2008, the amalgamation of Centurion Bank of Punjab with HDFC Bank was
formally endorsed by Reserve Bank of India to finish the statutory and administrative
endorsement process. The merged entity now holds a strong deposit base of around Rs.
1,22,000 crore and net advances of around Rs. 89,000 crore.

EVOLUTION OF AXIS BANK:

AXIS Bank set up in 1993 was the first of the new private banks to have started operations in
1994 after the Government of India enabled new private banks to be established. Axis Bank
Ltd. has been advanced by the biggest and the best Financial Institution of the nation, UTI.
The Bank was set up with a capital of Rs. 115 crore, with UTI contributing Rs. 100 crore, LIC
– Rs. 7.5 crore and GIC and its four backups contributing Rs. 1.5 crore each. Axis Bank is one
of the principal new age private division banks to have started operations in 1994.

AXIS Bank entered an arrangement in November 2010 to purchase the venture keeping
money and values units of Enam Securities for $456 million. Pivot Securities, the values arm
of Axis Bank, will converge with the venture managing an account business of Enam
Securities. As per the arrangement, Enam will demerge its speculation keeping money,
institutional values, retail values and dispersion of budgetary items, and non– saving money
back organizations and union them with Axis Securities.
Process of Personal Loan:

Once the borrower is qualified for the personal loan it takes close to about three days or so to
get the loan amount disburse. The personal loan repayment is in equated monthly installments
and tenure can vary from 1- 5 years.

It is advisable for a borrower to get in touch with as many banks as possible and get them to
make loan offers to him. Then he can then try to negotiate with them and select the most cost
effective option for him. The borrower will also have to take into consideration the processing
fee and prepayment charges while finalizing the lender.

Always remember that personal loan should be taken in dire emergency as far as possible.
Being classified as unsecured loans, these loans are usually more expensive in terms of
interest rate compare to any other loan taken against collateral security like gold jewelry, high
surrender value insurance policies, etc.

Eligibility:

Personal loans are provided by various banks and non-banking financial companies (NBFCs).
There are various factors which affect personal loan eligibility. Below mentioned are some of
the few factors which the bank or the NBFC will consider while they decide on personal loan
eligibility.

Financial Background:

This is the most important parameter that determines if we are eligible for a personal loan and
also the quantum of personal loan we are eligible for. It will help the bank understand how
well we can pay back our loan. Every bank will have a minimum level of income to be
eligible for a personal loan.

Credit History:

This will help the bank ascertain our track record for payment of EMI of any loan or the
payment of the credit card bills. In case we have paid all your previous EMIs and credit card
bills on time, chances are there getting the loan is higher.
Company in which we are employed:

Personal loan eligibility may depend upon the company we are working for. In case our
company is a public ltd or among the A class companies, which the banks call them as, the
chances are there to get a loan becomes very easy. If we are working for a B class company,
then getting a personal loan may be difficult for we or it may be costlier also compared to a
person who is working in an A class company which means that if we are working for a
company which belongs to the A class according to the bank, and then the personal loan rate
would be comparatively lower to a person who belongs to a B class company.

Any other loans we may be holding:

In case we are having any other loan at the given point of time, then our eligibility for
personal loan may go down as we are already paying towards EMI of the previous loan and
the income in our hand would be lower compared to a case where we are not paying any EMI.

Personal loan providers in India:

Applying for a personal loan is quite simple these days. The personal loan market is filled
with competitors, such as HDFC bank, ICICI bank, AXIS bank, SBI Personal Loan and all
Public and private sector banks. Among the NBFCs Bajaj Finance Limited is playing key
role. Other financiers are Fullerton India Credit Company Ltd and Shriram City Union
Finance Ltd.

Types of Personal Loan:

The personal loan is divided into following three types;

1. Personal Loan for Salaries class,

2. Personal Loan for Self Employed class and

3. Personal loan cross sell

Salaried class Personal Loan, some of the general important criteria are:

 The applicant should get a healthy and stable income with a ratio of 1:4, i.e., if a salary
of an individual is Rs.20000/- the EMI should not cross Rs.5000/-.
 The applicant should be not less than 21 years and 60 years of age.
 Few of the financial institution lend to their own exiting customer, who are having
good track record with them.
 The residing stability is also an important factor. For rented class, 6 months to 1 year
residence stability is sufficient.
 Apart from this all the KYC documents, such as ID proof, address proof, bank
statement etc., should satisfy the financier.

Self-employed classes Personal Loan, some of the general important criteria are:

 The applicant should not less than 21 years and should not cross 65 years of age at the
time of completing the loan.
 The banking transaction should be healthy and indeed should have no returns.
 To understand the stability of the business the business RC is also mandate.
 Few of the financial institution also ask for the latest income tax return copy, the Profit
& Loss and Balance Sheet, to understand the cash flow of the applicant.

Personal Loan Cross Sell, some of the general important criteria are:

Bajaj Finance Limited is playing major role in this segment in all over India. Who are existing
customers in Bajaj could be offered for this loan as pre-approved loan. Customer is required
to submit only KYC documents like address proof, ID proof and photograph. They need not
to submit any other papers. Credit team will check and make a decision based on their
existing repayment track and CIBIL history.

Credit Information Bureau of India (CIBIL):

CIBIL stands for Credit Information Bureau of India, an organization which gives a full
picture of one’s repayment track and the loan commitment. The Credit Information Bureau of
India (CIBIL) gives score between 300 to 900. The lower the credit score, the more chances
of loan rejection.

CIBIL Scoring Factors:

The CIBIL score value indicates the score value of an applicant. The basic factors of CIBIL
scoring are: -

 The score is backed up with a maximum of 5 reasons. The reasons indicate why a
customer did not receive the most optimal score.
 Some exclusion such as restructured, willful default, write off and suit filed in the past
24 months are also seen on the credit report. For such an individual, a valid score
between 300 and 900 is received with the applicable exclusion code.
 In some cases score can be 0 or -1. -1 score is returned for No hit or subject with only
enquires and 0 is returned for subject where the earliest open trade is less than six
months old.

Some of the important CIBIL status in which a Personal Loan will not be sanctioned:-

 SUIT FILED / WILFUL DEFAULT: Suit filed, willful default cases are not
sanctioned for personal loan, where the customer may have submitted manipulated
document in his previous applied loan.
 WRITE OFF/ SETTLED STATUS: The valid values for this category are,
Restricted loan, Written off, Settled Post Write off, Settled Account Sold, Written off
and Account sold, Account Purchased and Written off/ settled/ restructured.
 TOTAL WRITE OFF: Total written off amount in case of a written off account.
 PRINCIPAL WRITTEN OFF: Indicates the written off principal amount (total
written off amount – interest and other charges) especially relevant for credit cards.
 SETTLEMENT: The amount is populated in case of settled account.
 ACTUAL PAYMENT: Actual payment made by the borrower.

The credit report displays upto 36 months of payment history. Information on Days Past Due
(DPD) or Asset classification (AC) is extracted over the history of one’s payment. IN case of
DPD, days are mentioned, after which the EMI is paid for any loan. It will be mentioned as
030, 120, 232 days etc. An XXX is inserted for any month for which information is not
reported to CIBIL.

Valid Values of CIBIL:

Some of the valid values which are used in CIBIL are DPD, a three digit number, In case of
account classification STD is Standard, SMA is Special Mentioned Account. SUB stands for
Sub Standard, DBT is for Doubtful and LSS used in CIBIL means loss.

A personal loan is an unsecured loan that you get without having to submit any collateral for
the same. It can be given for numerous purposes such as marriage, education, medical
emergencies, travel, home renovation, and any other personal use. Both salaried and self-
employed can apply for a personal loan. The loan comes with attractive interest rates and
flexible repayment options. You can either apply online or at the branch of the bank or non-
banking finance company (NBFC). You will also need to pay the processing fee at applicable
rates. The lender will assess the loan eligibility based on your income, credit score and
repayment potential. After receiving the application, the lender will pull your credit report
from CIBIL. Once you meet the eligibility criteria, the lender will disburse the loan amount in
your bank account.

Personal loans come with the following features and benefits that make one opt for the same.
Let’s take a look at them.

Instant Loan Approval & Disbursal - The loan can be approved instantly provided you
have the required income, desired credit score and repayment capacity as sought by lenders.
Once the instant personal loan approval happens, the next course of action is sanction. The
lender, after assessing your income and credit profile, sanctions a loan amount and
communicates the same via an email or SMS. After sanction, the process of disbursal begins
and you get the loan amount credited to your account within a few hours from the sanction.

Flexible Repayment Tenures - The best part about a personal loan is that you are given time
to repay the dues. You will get a loan tenure ranging from 1 to 5 years.
Attractive Interest Rates - Personal loans are available at attractive interest rates starting
from 9.85% per annum. As the cost of funds for banks has come down rapidly, the rate of
personal loan interest rates has also come down like secured loans.

No Collateral/Security Required - You won’t need to submit any collateral or security to get
a personal loan, which is unsecured in nature. As a result, the loan sanction and disbursal
depend firmly on your income and credit score.

Use the Personal Loan the Way You Want - The loan amount disbursed can be used by the
borrower in the way he/she wants. You can get the loan for numerous purposes such as
marriage, travel, home renovation, etc.

Prepayment Allowed in a Loan - You can prepay the loan any time after the successful
payment of the first 12 EMIs. The prepayment means the payment of the outstanding loan
balance before the completion of the original loan tenure. Now it depends on the lender
whether it allows you to prepay in full or parts.

Fees & Charges

A personal loan comes with a list of charges that you can see below.

Interest Rate - The first charge that most of us contemplate is the interest rate at which the
loan will be available. The effect of the interest rate will be seen in the monthly installment as
well as the overall interest outgo.

Processing Fee - It’s a one-time fee that banks and other financial institutions levy to process
the loan amount. The fee can either be a flat amount or account for a certain percentage of the
loan amount. The personal loan disbursal amount is different from the applied amount
because the processing fee payable is deducted from the latter. But the interest rate will be
charged on the applied amount.

Late Payment Charges - If you pay the EMI after the due date, the lender will deduct late
payment charges at around 2% of the amount due.

Foreclosure Charges - If you close the loan before the original tenure, it will be called
foreclosure and charges will apply on the same.
Personal Loan Eligibility Criteria (It can vary from one lender to another):-

As the loan comes to you without collateral, lenders like to be absolutely convinced of your
ability to pay off the EMI. So, the lender can place conditions regarding age, earning amount,
the period of employment, residence stability, credit score, the type of organization, etc.
Instant personal loans can be granted if you tick all the boxes. Let’s check out each of these
aspects below.

Age - The age of the applicant is an important criterion for personal loan approval. There’s a
difference when you apply for a personal loan in your 30s compared to the time when you go
past 50. The difference is the job prospects are greater when you are younger. The greater job
prospects make lenders more confident of your repayment capacity. Lenders can allow you to
apply for a personal loan when you attain a minimum age of 21 years (salaried) and 24 years
(self-employed). However, the maximum age of the applicant must not be more than 58 years
if you are salaried and 65 years if you are self-employed.

Earning Amount - Different lenders can have different minimum income requirements for
borrowers to meet. Not only has the amount varied but also the definition of income. Yes,
there are some banks assessing eligibility based on the gross monthly income of an individual.
Whereas, some banks assess eligibility based on the net monthly income. Salaried can get
their personal loan sanctioned on earning a minimum net monthly income of INR 15,000-
20,000. One more thing, lenders don’t consider your variable income such as incentives while
assessing personal loan eligibility. In the case of self-employed, loan eligibility is based on
the profit that comes after the incidence of tax.

Check Your Existing Loan Obligations - The lender assesses the personal loan eligibility of
candidates based on their existing loan obligations too. In case you have a running loan, the
lender will check the EMI amount and add it to the EMI of a personal loan you want. If the
combined value comes within 50% of your net monthly income, the lender would approve the
loan easily. In case it is beyond, your personal loan eligibility will be lower.

Period of Employment - Personal loans are offered to borrowers having worked in the
organization for at least 1 year. Apart from that, lenders would also want your overall work
experience to be of around 2-3 years so that the loan can be sanctioned.
Residence Stability - You must have stayed in your current residence for at least 1-2 years.

Credit Score - A credit score represents the creditworthiness of borrowers. The high
creditworthiness enhances the possibility of a timely repayment track. For instant personal
loan approval, it is important the credit score must be 750 and above. However, if the score is
between 700 and 750, the loan can still be approved albeit at a slightly higher rate of interest.
So, if you are having a credit history of 1 year and above, you must have a credit score.
Whatever debt obligations you might have, be it a credit card, home loan or even a personal
loan, make sure to pay dues on time. This will help build a strong credit history and a good
score.

Type of Organization - The personal loan approval is also contingent on the type of
organization you are working with. You can get the approval quickly if you are working in a
top organization compared to someone working with a very less known company.

Type of Business - Self-employed applicants will need to be in the business that runs across
seasons. This will ensure a greater degree of confidence amongst lenders about your
repayment capacity. Some businesses are seasonal and can thus impact repayment negatively.
Lenders remain wary of disbursing loans to such applicants.
BASIS TO COMPARE PERSONAL LOAN:

 Compare Interest Rates:

Personal Loan can be compared primarily on the basis of interest rates which vary
across banks depending on customer profile which is further linked to your
occupation, salary/income, credit history etc. The personal loan interest rate ranges
from 12% to 25%, you must go for that loan which is offering customer at the
minimum rate.

 Other Charges:
Customer should also check on the other charges like processing fee, pre- payment
penalties and documentation fee because they increase the overall loan cost and vary
widely across banks.

 Evaluation of various Loan offers:

Customer should first calculate the entire loan cost across banks which constitutes the
rate of interest & banks other charges. Evaluate offers keeping the tenure of the loan
constant & compare the rate of interest, EMIs & other charges. This process will help
customer get the Best Loan deal.
 EMIs:
EMI is the monthly equated installment which constitutes the principal amount and the
interest on the principal equally divided across each month in the loan tenure.
 Tenure:
Tenure is the time frame for the personal loan payments to be paid back to the bank; it
ranges from 1 year to 5 years. If customers have a longer tenure it will end up paying
more interest & will have lower EMI, on the other hand shorter loan tenure will carry
higher EMIs & the interest amount is less. Customer must compare the loan offers by
keeping the tenure constant.
 Eligibility Check:
Before taking a personal loan customer must know the eligibility criteria offered by
various banks on the basis of which they offer loans and also compare personal loan
banks. Checking the eligibility parameters will help customer find the best loan deal.
 Turnaround time:
It becomes one of the most important factors in evaluation of customer loan
application when customers are in a direct need of money. Turnaround time is the time
which banks take in processing your loan application; customer must check this
parameter which varies from bank to bank.
Top 10 Reasons for Taking Personal Loan in India:

Here are some of the popular reasons for availing a personal loan:–

1. Clear Credit Card Debt

2. Finance a New Venture

3. Improving Credit History

4. Medical Emergencies

5. Going on a Vacation

6. Wedding Expenses

7. Buying Your Dream Vehicle

8. Financing Big Ticket Purchases

9. Higher Education

10. Home Renovation

1. Clear Credit Card Debt:

Credit card debts can be hard on your pocket. With annual interest rates of 40%, this is
an expensive debt to carry and if repayment is not made soon, then your credit score
will be affected negatively. As a result, taking out a personal loan with annual interest
rates ranging from 12 to 15% is a much better option. You save money on interest
while maintaining your credit history.

2. Finance a New Venture:

Inadequate funds can put a stop to your dream of starting a new business. A personal
loan on the other hand, can assist you in obtaining funds to finance your business.
Furthermore, one can apply for a business loan, but in that case, you must prove your
financial history and tax-related documents, which is not possible for a new business.
As a result, a personal loan would be the most practical option to pursue as it is much
easier to avail.

3. Improving Credit History:

When it comes to loans and credit cards, your credit score is very important. If you do
not have a good credit score, a personal loan may be able to help you get one. Most
people apply for small personal loans to improve their credit score by repaying the
loan on time to establish a good payment history, which demonstrates to the lender
 your creditworthiness. Paying a loan on time will eventually raise your score, allowing
you to apply for a larger loan amount in the future.

4. Medical Emergencies:
The deterioration of people’s quality of life as a result of lifestyle factors may
necessitate the use of medical procedures on occasion. Insurance policies do not cover
all medical procedures. Certain diseases and treatments that you may need to undergo
are not covered by all insurance policies. Medical policy clauses may even require you
to pay a certain amount out of pocket. In such cases, a personal loan for a medical
emergency is one of the best options. The loan amount can be used to cover any
medical expenses or therapies that you may require.

5. Going on a Vacation:

It is often said, “Life is not a destination to reach, but a journey to be experienced.”

Traveling to new locations can often refresh the soul and break the monotony of the
routines of daily lives. It is always a financially prudent decision to make regular
savings towards such vacation goals; wherein one can aim to accumulate a healthy
amount to meet the vacation expenses.
However, in the interim, making advance bookings towards such expenses, especially
for flights, hotels, etc., can help you gain a significant price advantage, thereby
lowering your overall travel budget indeed. One can take a personal loan for travel to
make such advance payments and repaying such loans with regular savings at a later
stage.

6. Wedding Expenses:
Marriages are made in Heaven but celebrated on Earth. And we all tend to splurge
quite a bit on the festivities. With intent to celebrate in the grandest manner, marriage
expenses can often go off-budget. Instead of facing financial stress about this, one can
take a personal loan for wedding expenses and then systematically repay the loan in
monthly installments.

7. Buying a New Vehicle:

A personal loan is one option for financing the purchase of your dream car or bike, or
even a boat. It’s also one way to pay for a vehicle if you’re not purchasing it directly
from the manufacturer. For example, if you want to buy a used car from another
consumer, a personal loan will allow you to do so without depleting your savings
account.
8. Financing Big Ticket Purchases:
One can avail a personal loan to fund any big-ticket purchases like electronic
appliances and gadgets eg. laptop, refrigerator, washing machine, etc., This is a
prudent option as compared to spending large sums in a month A personal loan allows
one to defer the large expenses over future months since it is to be repaid in monthly
installments in the future.

9. Higher Education:
While you may have prioritized your child’s career aspirations and making regular
savings towards it, the ever-increasing education costs may cause some deficit towards
such financial goals. One can take a personal loan to bridge such deficit and enable
their child to get admission into the desired college and stream, not allowing any
financial constraints to alter such goals.

10. Home Renovation:

One often spends a significant amount of time with family at home. Getting a home
renovated can often is one’s desire, but relatively higher expenses may cause one to
push it down the priority list. A personal loan can help one make this desire a reality,
wherein the home renovation expenses can be funded through such loan to be repaid
in monthly installments.
Here is a comparison of Personal Loan rates and details for HDFC Bank, Axis Bank on
key parameters as on 14/11/2022:-

Parameters HDFC Bank Axis Bank

Interest Rate 11.00% - 22.00% 13.00% - 18.00%

Processing Fees Rs. Upto 2.50% Min 999 2%

Loan Amount Rs. 50,000 to 75 Lakh Rs. 50,000 to 25 Lakh

Loan Tenure 12 to 60 Months 12 to 60 Months

Lowest EMI Per Lakh Rs. 2,174 Rs. 2,275

Part Payment Charges Allowed after 12 months at 2- Allowed after 3 months at Nil
4% Part-Payment Charges

Foreclosure Charges Allowed after 12 months at Allowed after 6 months at Nil

Foreclosure Charges. 2% if
2 - 4% foreclosure is done within the
lock-in period

Eligible Age 21 to 60 Years 21 to 58 Years

Minimum Income Rs. 25,000 Rs. 25,000

Current Work 1 Month 12 Months

Experience

Total Work Experience 1 Month 24 Months

Customer Ratings 4.6/5.0 4.4/5.0

HDFC Bank Profile:-

The Housing Development Finance Corporation Limited or HDFC was among the first
financial institutions in India to receive an “in principle” approval from the Reserve Bank of
India (RBI) to set up a bank in the private sector. This was done as part of RBI’s policy for
liberalization of the Indian banking industry in 1994.
HDFC Bank was incorporated in August 1994 in the name of HDFC Bank Limited, with its
registered office in Mumbai, India. The bank commenced operations as a Scheduled
Commercial Bank in January 1995.
As of June 30, 2022, the Bank had a nationwide distribution network of 6,499 branches and
18,868 ATM's in 3,226 cities/towns.

Axis Bank Profile:-

Axis Bank is the third largest private sector bank in India. The Bank offers the entire spectrum
of financial services to customer segments covering Large and Mid-Corporates, MSME,
Agriculture and Retail Businesses.

The Bank has a large footprint of 4,758 domestic branches (including extension counters)
with 10,990 ATMs & 5,972 cash recyclers spread across the country as of 31st March 2022.
The Bank has 6 Axis Virtual Centers with over 1,500 Virtual Relationship Managers as of
31st March 2022. The Overseas operations of the Bank are spread over eight international
offices with branches in Singapore, Dubai (at DIFC), and Gift City-IBU; representative
offices in Dhaka, Dubai, Abu Dhabi, Sharjah and an overseas subsidiary in London, UK. The
international offices focus on Corporate Lending, Trade Finance, Syndication, Investment
Banking, Liability Businesses, and Private Banking/Wealth Management offerings.

Axis Bank is one of the first new generation private sector banks to have begun operations in
1994. The Bank was promoted in 1993, jointly by Specified Undertaking of Unit Trust of
India (SUUTI) (then known as Unit Trust of India), Life Insurance Corporation of India
(LIC), General Insurance Corporation of India (GIC), National Insurance Company Ltd., The
New India Assurance Company Ltd., The Oriental Insurance Company Ltd., and United India
Insurance Company Ltd. The shareholding of Unit Trust of India was subsequently
transferred to SUUTI, an entity established in 2003.

With a balance sheet size of Rs. 11,75,178 crores as on 31st March 2022, Axis Bank has
achieved consistent growth and with a 5-year CAGR (2016-17 to 2021-22) of 14% each in
Total Assets & Advances and 15% in Deposits.
 CHAPTER-2

REVIEW OF LITERATURE
The reasons for undertaking a literature review are numerous and include eliciting
information for developing policies and evidence-based care, a step in the research process
and as part of an academic assessment. Frequently-asked questions range from where to start,
how to select a subject, and how many articles to include, to what is involved in a review of
the literature.

A literature review is an objective, thorough summary and critical analysis of the relevant
available research and non-research literature on the topic being studied (Hart, 1998). Its goal
is to bring the reader up-to-date with current literature on a topic and form the basis for
another goal, such as the justification for future research in the area. A good literature review
gathers information about a particular subject from many sources. It is well written and
contains few if any personal biases. It should contain a clear search and selection strategy
(Carnwell and Daly, 2001). Good structuring is essential to enhance the flow and readability
of the review. Accurate use of terminology is important and jargon should be kept to a
minimum. Referencing should be accurate throughout (Colling, 2003).

Dr. B Sudha, P Rajendran, 2019 Conducted a study on financial health of Axis Bank &
HDFC Bank for the time period of 2013-2014 to 2017-2018 by using various statistical tools
and ratio analysis for analyzing data. The study concludes that overall financial performance
of Axis Bank is less compared the HDFC Bank.

S. Mammadli 2016 the author explains the risks that the banks are facing, when banks give
loans to the person when compared to the business organization. To overcome this problem a
fuzzy logic model for the loan evaluation has been used. It has 5 input variables such as
income, employment, character, credit history which shows the standing credit. Based on
level of the membership of the linguistic terms of the fuzzy model output, the applicants
standing credit should be classified as high, medium, low.
Xudong Lin, Lin Cheng, Wentao Mao and Zhiwei Qiu, 2015 the author explains the
willingness of the bank loans which is based on prospect theory. Companies with fewer credit
ratings face difficulty in getting loans from the banks. The author found the attributes which
directly or indirectly affect the willingness of the loan and using simulation model which
further helps in solving the financial problem of these companies.

Dash et al. (2014) in their paper on “Housing Loan Disbursement in India: Suggestive
Metrics to Prevent Bad Debts” indicated that Non-Banking Financial Companies (NBFC) in
different parts of India were involved in the activities of lending mortgage loans in respect of
adequate security. The study focuses on the policies, terms, and conditions while making
disbursement of loans. It has been suggested that the financing system of housing loan by
NBFCs needed technological advancement in analyzing the credential of the borrowers and
that there should have been a mechanism to obtain credit score from approved agencies. The
study also suggested some quantitative parameters to check the credential of the borrowers.
The different parameters were discussed in the study in respect of the credit scoring software,
which were quantitative parameters as well as qualitative parameters. The study showed only
those qualitative parameters which could be quantified.

Shafinar Ismail (2013) studied on the determinants of personal loans borrowings with the
hypothesis on the factors like knowledge about personal loans (how to manage the finance of
earnings and borrowings), media awareness (instruments that help to publish the information
about financial management), Perception towards personal loans, family influence and
religious/ethical belief. The researcher found out that media awareness, religious/ethics belief
had the strong effects towards personal loans in Malaysia while South African researchers
found that application process, cost of the loans, no collateral and advertisement strategy were
influencing the trend in personal loans. The findings were arrived at using by a sample of only
one Mabank’s employees with a minimum.

Christos C. Frangos (2012), study on the factors affecting customers’ decisions for taking
out bank loan reveals that lending rate is the main factor, service quality and social factors
like marital status also affecting the decision for taking out the loan among Greek people.
This study mostly concentrated on the factors that influence the choice of their bank to take a
loan not considering some other possible factors that might affect the decision for getting
loans.

In the view of Felicia Omowunni Olokoyo (2011), commercial banks loan advance, volume
of deposit, investment portfolio, interest rate, and cash reserve requirements ratio and their
liquidity ratio are the major factors that determine the commercial banks’ lending behavior in
Nigeria. The researcher used secondary data and analytical method of research to conclude
this study.

Constantinos Alexiou and Voyazas Sofoklis (2009), DETERMINANTS OF BANK

PROFITABILITY: EVIDENCE FROM THE GREEK BANKING SECTOR. As
profitability back bone of any firm we know so same they try to investigate the find
profitability of selected 6 banks from Greek from the duration of 2000-2007. For study panel
data method adopted by them. In result they found the methods used for approving loans and
monitoring troubled loans in the past depended heavily on collateral and did not focus on the
cash flow of the borrower, leading to relatively high levels of default, this reason profitability
for Greek banks decrease. For improvement of this revising the 7 structure of banks’ assets
and liabilities as well as introducing cost-efficiency measures can enhance the quality of the
sector, making it thus more profitable.

Medhat Tarawneh, (2006) this paper study Comparison of Financial Performance in the
Banking Sector: Some Evidence from Omani Commercial Banks. For this study total 5
Omani banks are taken with more than 260 branches were financially analyzed. In his
findings suggest that the bank with higher total capital, deposits, credits, or total assets does
not always mean that has better profitability performance. The regression analysis results
showed that financial performance of the banks was strongly and positively influenced by the
operational efficiency, and asset management, in addition to the bank size.

Velnampy. T (2006) examined the financial position of the companies and the relationship
between financial position and profitability with the sample of 25 public quoted companies in
Sri Lanka by using the Altman Original Bankruptcy Forecasting Model. His findings suggest
that, out of 25 companies only 4 companies are in the condition of going to bankrupt in the
near future. He also found that, earning/total assets ratio, market value of total equity/book
value of debt ratio and sales/total assets in times are the most significant ratios in determining
the financial position of the quoted companies.

JOHN GODDARD, PHIL MOLYNEUX, JOHN O.S. WILSON (2004) Dynamics of

Growth and Profitability in Banking. Dynamic panel and cross-sectional regressions are used
to estimate growth and profit equations for 583 European commercial bank, the sample
includes all commercial, savings, and co-operative banks from five major European Union
countries for time period of 1992-1998. One hand, current profit is an important pre-requisite
for future growth, because profit is the ultimate source of finance for expansion. But on the
other hand, excessive current growth can have damaging implications for future profit, due to
a managerial constraint on the rate at which a bank can grow without causing its profitability
to deterioration.

Adam Lindgreen (2004) enumerates few published empirical studies have examined the
design, implementation, and monitoring of customer relationship management (CRM)
programmes at a practical level. The article develops a single embedded case study on
Dagbladet Børsen (http://www.borsen.dk), the largest publisher of business-related materials
in Scandinavia.

The article first introduces the reader to the philosophy behind CRM. Following that, it
considers key areas of a four-year long CRM program me and offer insights into the
procedure that has been developed by SJP (http://www.sjp.dk), the consulting firm that was
brought into assist.

Randi Priluck (2003) analyses the relationship marketing can mitigate product and service
failures, Relationship marketing is beneficial to firms because it can foster customer loyalty
and re-patronage behavior. Consumers engaged in relational exchanges are more satisfied
than those in discrete transactions because of the ease and psychological comfort of
purchasing from a familiar company. This research investigates the power of relationship
marketing to mitigate in two situations. One exposes consumers to poor product performance
and examines their levels of trust, commitment and satisfaction.

The second presents a product failure that is followed by a lapse in service recovery and
measures satisfaction and exit behavior. The findings of both studies suggest that relationships
make up for increasingly strong negative encounters, providing a level of insulation for the
marketer. Implications for service firms are discussed.

Antony Beckett, Paul Hewer, Barry Howcroft (2000) explains an exposition of consumer
behavior in the financial services industry, Deregulation and the emergence of new forms of
technology have created highly competitive market conditions which have had a critical
impact upon consumer behavior.

Bank providers must, therefore, attempt to better understand their customers in an attempt not
only to anticipate but also to influence and determine consumer buying behavior. The paper
accordingly presents and develops a model which attempts to articulate and classify consumer
behavior in the purchasing of financial products and services.

The theoretical insights generated by this model are then used to examine qualitative research
data gained from focus group discussions on consumers’ attitudes to their financial providers
and their financial products. Finally, these findings are examined for the potential insights
they provide to bank providers attempting to identify appropriate strategies which are
conducive to increased customer retention and profitability.

Trevor Richards (1996) explains by defining the conversion model – a model used as a
marketing tool to identify commitment to different brands of goods or services. Argues that
there is a difference between committed and uncommitted customers which are not related to
service quality and that this makes it difficult to predict customer retention based solely on
these grounds. Other factors also drive commitment. Presents two short case studies based on
these assumptions.

Kurt Matzler, Hans H. Hinterhuber, Franz Bailom, Elmar Sauerwein (1996) describes
on how to delight your customers, Asks which product qualities are decisive for the
satisfaction of the customer and which features merely prevent dissatisfaction. They proposes
Kano’s model of customer satisfaction for answering these questions and for drawing
conclusions for the management of product development.

In his model, Kano distinguishes between three types of product requirement which influence
customer satisfaction in different ways when met: must-be requirements, which are basic
criteria of a product - if these requirements are not fulfilled, the customer will be extremely
dissatisfied; one- dimensional requirements, where customer satisfaction is proportional to the
level of fulfillment, the higher the customer’s satisfaction and vice versa; and attractive
requirements, which are the product criteria which have the greatest influence on how
satisfied a customer will be with a given product. Attractive requirements are neither
explicitly expressed nor expected by the customer.
 CHAPTER-3
RESEARCH METHODOLOGY
Meaning of Research:
The word research as it is used in everyday speech has numerous meanings, making it a
decidedly confusing term for students, especially graduate students, who must learn to use the
word in a narrower, more precise sense. From elementary school to college, students hear the
word research used in the context of a variety of activities. In some situations, the word
connotes finding a piece of information or making notes and then writing a documented
paper. In other situations, it refers to the act of informing oneself about what one does not
know, perhaps by rummaging through available sources to retrieve a bit of information.
Merchandisers sometimes use the word to suggest the discovery of a revolutionary product
when, in reality, an existing product has been slightly modified to enhance the product‘s sales
appeal. All of these activities have been called research but are more appropriately called
other names: information gathering, library skills, documentation, self-enlightenment, or an
attention-getting sales pitch.
Research in common parlance refers to a search for knowledge. Once can also define research
as a scientific and systematic search for pertinent information on a specific topic. In fact,
research is an art of scientific investigation. The Advanced Learner’s Dictionary of Current
English lays down the meaning of research as ―a careful investigation or inquiry specially
through search for new facts in any branch of knowledge.‖ Redman and Mory define research
as a ―systematized effort to gain new knowledge.‖ Some people consider research as a
movement, a movement from the known to the unknown. It is actually a voyage of discovery.
We all possess the vital instinct of inquisitiveness for, when the unknown confronts us, we
wonder and our inquisitiveness makes us probe and attain full and fuller understanding of the
unknown. This inquisitiveness is the mother of all knowledge and the method, which man
employs for obtaining the knowledge of whatever the unknown, can be termed as research.

Research is an academic activity and as such the term should be used in a technical sense.
According to Clifford Woody research comprises defining and redefining problems,
formulating hypothesis or suggested solutions; collecting, organizing and evaluating data;
making deductions and reaching conclusions; and at last carefully testing the conclusions to
determine whether they fit the formulating hypothesis.

D. Slesinger and M. Stephenson in the Encyclopedia of Social Sciences define research as

―the manipulation of things, concepts or symbols for the purpose of generalizing to extend,
correct or verify knowledge, whether that knowledge aids in construction of theory or in the
practice of an art.‖ Research is, thus, an original contribution to the existing stock of
knowledge making for its advancement. It is the pursuit of truth with the help of study,
observation, comparison and experiment. In short, the search for knowledge through objective
and systematic method of finding solution to a problem is research.

The systematic approach concerning generalization and the formulation of a theory is also
research. As such the term ‗research‘ refers to the systematic method consisting of
enunciating the problem, formulating a hypothesis, collecting the facts or data, analyzing the
facts and reaching certain conclusions either in the form of solutions(s) towards the concerned
problem or in certain generalizations for some theoretical formulation.

Research Problem Statement:

As Personal loan is one of the requirements for individual person for their various purposes
such as marriage, education, medical emergencies, travel, home renovation, and any other
personal use. Both salaried and self-employed can apply for a personal loan. Hence researcher
would like to study and analyze the personal loan procedure and their formalities so that
researcher and other general people of the society would be benefited with the help of this
research. Therefore, the above stated study will be the worth finding.

Objectives of the Study:

1. To study the personal loan procedure of both HDFC Bank & Axis Bank.

2. To identify the requirement of documents needed for taking personal loan from HDFC
Bank and Axis Bank.

3. To compare personal loan procedure of HDFC Bank & AXIS Bank.

4. To find out which personal loan is better for respondents.

Scope of the Study:

1. Study is useful for prospective customers who want to take or planning to avail
personal loan facility from any financial institution.
2. Study is helpful to know about the personal Loan facility of financial
institutions/banks like its eligibility criteria, documentation, and its rate of interest.
3. Through this study we also came to know how much amount of loan sanctioned under
this scheme for a salaried person.
4. Through this study, we also came to know that within how much time the personal
loan of an individual is being sanctioned and the processing charges on personal loan.

Research Methodology:

Research in common parlance refers to a search for knowledge. Research is an endeavor to

discover answers to problems through the application of scientific method to knowable
universe. The Webster’s International Dictionary gives a very inclusive definition of research
as ‘a careful critical inquiry or examination in seeking facts or principles, diligent
investigation in order to ascertain something’.

Research is essentially a systematic enquiry seeking facts through objective verifiable

methods in order to discover the relationship among them and to deduce from them broad
principles or laws. It is really a method of critical thinking. It comprises defining and re-
defining problems, formulating hypothesis or suggested solutions, collecting, organizing and
evaluating data, making deductions and making conclusions.

Research Methodology is a way to systematically solve the research problem. The Research
Methodology includes the various methods and techniques for conducting a Research. This
project comes under the head of “Marketing Research”. The “Marketing Research” is the
systematic design, collection, analysis and reporting of data and finding relevant solution to a
specific marketing situation or problem”.
Research Design:

This study was based on exploratory as well as descriptive research design. The descriptive
research was carried out to describe about the phenomenon. This study was done to
understand the personal loan procedure of both HDFC Bank & Axis Bank and their
documentation formalities.

Sample Design

 Sample Universe:

The sample universe for the said study was all the personal loan holders of HDFC bank and
Axis Bank of Amravati city.

 Sample Size:

Sample size was of 100 respondents only due to time and money constraint.

 Sampling technique:

Convenience sampling technique has been used in this research. In this, customers were
selected according to the convenience of the researcher.

 Sample unit:

An Individual customer of HDFC Bank or Axis Bank of Amravati city who had borrowed
personal loan was the sample unit.

Data Collection:

The study is based on both primary as well as secondary data.

 Primary data:

Primary data has been collected through well designed questionnaire and personal interview,
which will be administered by the researcher personally from discussion with the customers
of HDFC Bank and Axis Bank in Amravati city.
  Secondary data:

Secondary data has been collected from various published and unpublished sources like
reports, magazines, books, journals, web-site, etc.

Data Analysis and Interpretation:

The collected data has been analyzed by using tables, charts, and graphical representations,
statistical or mathematical techniques as per the requirement of the research study.

LIMITATIONS OF THE STUDY:

1. Sample size was of only 100 respondents.

2. It is assumed that the information provided by respondents is true and fair.

3. This study was restricted to personal loan of HDFC Bank and Axis bank only.

4. This study was restricted only for one academic year due to time constraint.
 CHAPTER-4
DATA ANALYSIS AND INTERPRETATION
4.1 Introduction
The process of converting information from a questionnaire so it can be manipulate and
analyze is referred as data preparation. This process normally follows data entry and data
tabulation. The purpose of data preparation process is to take data in its row form and convert
it so as to transform into meaningful and useful information. While conducting a research,
presentation of collected data is an important stage. The collected data should be interpreted
properly so as to reach out at a proper conclusion, thus data collected must be edited and
tabulated into statically from on the basis of questionnaire.
Microsoft Excel 2007 was used for data preparation. And data was tabulated in one way
tabulation. Tabulation is a simple process of counting the number of observations that are
classified into certain categories. One way tabulation shows the number of respondents who
gave answer to each question of the questionnaire.

The successful completion of every study depends on the authenticity of the observations. To
observe the collected data carefully, following detail analysis of data collected through a
structured questionnaire. The analysis and interpretation of 120 respondents is given below.

Analysis of Data:

After the data has been collected, the researcher wants to analyze it. The analysis of data
require a number of closely related operation such as establishment of categories, the
application of these categories to raw data through coding, tabulation and drawing statistically
inference. The unwisely data showed necessarily be condensed into a few manageable groups
an tables for further analysis. In short it is a set of methods and techniques that can be used to
obtain the information and sight from the data.
Table 4.1 Gender of the Respondents:-

Sr. No. Gender No of Respondents Percentage (%)

1. Male 67 67%
2. Female 33 33%
3. Transgender 00 00%
Total 100 100%

Graph 4.1 Gender of the Respondents:-

Gender of the Respondents

0%

33%

Male
Female
67%
Transgender

Analysis:

From the above table and graph, it is analyzed that majority i.e. 67% respondents were male
and 33% respondents were female.

Interpretation:

From the above analysis, it is revealed that majority i.e. 67% respondents were male.
Table 4.2 Age of the Respondents:-

Sr. No. Age Groups No. of Respondents Percentage (%)

1. Up to 30 yrs 30 30%
2. 30-40 yrs 26 26%
3. 40-50 yrs 24 24%
4. More than 50 yrs 20 20%
Total 100 100%

Graph 4.2: Age of the Respondents:-

Age of the Respondents

30%
30% 26%
24%
25%
20%
20%

15% Age of the Respondents

10%

5%

0%
Up to 30 yrs 30-40 yrs 40-50 yrs More than 50
yrs

Analysis:

From the above table and graph, it is analyzed that 30% respondents were from up to 30 years
age group, 26% respondents from 30 to 40 years age group, 24% respondents from 40 to 50
years age group and 20% respondents from more than 50 years age group.

Interpretation:

From the above analysis, it is revealed that majority i.e. 30% respondents were youth from
age group of up to 30 years and 26% respondents from 30 to 40 years age group.
Table 4.3 Annual Incomes of the Respondents:-

Sr. No. Annual Income Groups No. of Respondents Percentage (%)

1. Up to 1 Lakh 15 15%
2. 1 to 2 Lakhs 40 40%
3. 2 Lakhs to 5 Lakhs 35 35%
4. Above 5 Lakhs 10 10%
Total 100 100%

Graph 4.3 Annual Incomes of the Respondents:-

Annual Incomes of the Respondents

10% 15%

Up to 1 Lakh
35%
1 to 2 Lakhs
40% 2 Lakhs to 5 Lakhs
Above 5 Lakhs

Analysis:

From the above table and graph, it is analyzed that 15% respondent’s annual income was up
to 1 lakh, 40% respondent’s annual income between 1 lakh to 2 lakhs, 35% respondent’s
annual income between 2 lakhs to 5 lakhs and 10% respondents annual income above 5 lakhs.

Interpretation:

From the above analysis, it is revealed that majority i.e. 40% respondents annual income was
between 1 lakh to 2 lakhs.
Table 4.4 Occupation of the Respondents:-

Sr. No. Occupation No. of Respondents Percentage (%)

1. Government Employee 19 19%
2. Private Employee 23 23%
3. Businessman 45 45%
4. Professional 13 13%
Total 100 100%

Graph 4.4 Occupation of the Respondents:-

Occupation of the Respondents

Professional 13%

Businessman 45%

Occupation of the Respondents

Private Employee 23%

Government Employee 19%

0% 10% 20% 30% 40% 50%

Analysis:

From the above table and graph, it is analyzed that 19% respondents were government
employees, 23% respondents were private employees, 45% respondents were businessmen
and 13% respondents were professionals.

Interpretation:

From the above analysis, it is revealed that majority i.e. 45% respondents were businessmen.
Table 4.5 From which source you knew about the various schemes of personal loans of
banks?:-
Sr. No. Sources No. of Respondents Percentage (%)
1. News Paper 23 23%
2. Television 12 12%
3. Social Media 10 10%
4. Official websites of Banks 29 29%
5. Friends 18 18%
6. Relatives 08 08%
Total 100 100%
Graph 4.5 From which source you knew about the various schemes of personal loans of
banks?:-

Sources from where respondents knew about

various schemes of Personal Loans

8% News Paper
23%
Television
18%
Social Media

12% Official websites of Banks

Friends
29% 10%
Relatives

Analysis:
From the above table and graph, it is analyzed that 23% respondents’ source was newspaper,
12% respondents’ source was TV, 10% respondents’ source was social media, 29%
respondents’ source official websites of banks, 18% respondent’s source was friends and 8%
respondents source was relatives.
Interpretation:

From the above analysis, it is revealed that majority i.e. 29% respondents’ source was official
websites of banks to knew about various schemes of personal loans.
Table 4.6: Which type of loan you availed from banks?

Sr. No. Types of Personal Loan No. of Respondents Percentage (%)

1. Secured Personal Loan 00 00%
2. Unsecured Personal Loan 100 100%
Total 100 100%

Graph 4.6: Which type of loan you availed from banks?

Type of loan

0%

Secured Loan
Unsecured Loan

100%

Analysis:

From the above table and graph it is analyzed that 00% respondents taken secured personal
loans and the total 100% respondents taken unsecured personal loans from banks.

Interpretation:

From the above analysis it is revealed that majority i.e. 100% respondents were taken
unsecured personal loans, as personal loans always unsecured.
Table 4.7: How much amount of personal loan you have taken from any bank?

Sr. No. Amount of Personal Loan No. of Respondents Percentage (%)

1. Upto Rs. 2 lakhs 25 25%
2. Between Rs. 2 Lakhs to 5 lakhs 42 42%
3. Between Rs. 5 Lakhs to 10 Lakhs 28 28%
4. Above Rs. 10 Lakhs 05 05%
Total 100 100%

Graph 4.7: How much amount of personal loan you have taken from any bank?

Amount of Personal Loan

Above Rs. 10 Lakhs 5%

Rs. 5 Lakhs to 10 Lakhs 28%

Amount of Personal Loan

Rs. 2 Lakhs to 5 lakhs 42%

Upto Rs. 2 lakhs 25%

0% 10% 20% 30% 40% 50%

Analysis:

From the above table and graph, it is analyzed that 25% respondents have taken personal loan
upto Rs. 2 Lakhs, 42% respondents have taken personal loan between Rs. 2 Lakhs to 5 Lakhs,
28% respondents have taken personal loan between Rs. 5 Lakhs to 10 Lakhs and 05%
respondents have taken personal loan above Rs. 10 Lakhs.

Interpretation:

From the above analysis, it is revealed that majority i.e. 42% respondents have taken personal
loan between Rs. 2 Lakhs to 5 Lakhs.
Table 4.8: What is the repayment period of your loan?

Sr. No. Repayment Period in Years No. of Respondents Percentage (%)

1. Less than - 1 Years 19 19%
2. 1 to 3 Years 43 43%
3. 3 to 5 Years 28 28%
4. More than 5 Years 10 10%
Total 100 100%

Graph 4.8: What is the repayment period of your loan?

Repayment Period in Years

43%
45%
40%
35% 28%
30%
25% 19%
20% Repayment Period in Years
15% 10%
10%
5%
0%
Less than 1 1 to 3 Years 3 to 5 Years More than 5
Years Years

Analysis:

From the above table and graph, it is analyzed that 19% respondents repaid their loan within 1
years, 43% respondents repaid their loan within 1 to 3 years, 28% respondents repaid within 3
to 5 years and only 10% respondents took more than 5 years to repay their loan.

Interpretation:

From the above analysis, it is interpreted that majority i.e. 43% respondents repaid their loan
within 1 to 3 years.
Table 4.9: Are you satisfied with the rate of interest and processing fees charged by the
HDFC and Axis Banks?

Sr. No. Particulars No. of Respondents Percentage (%)

1. Yes 92 92%
2. No 08 08%
Total 100 100%

Graph 4.9: Are you satisfied with the rate of interest and processing fees charged by the
HDFC and Axis Banks?

Satisfied with the rate of interest and processing

fees

100%
80%
60% Satisfied with the rate of interest
92% and processing fees
40%
20%
8%
0%
Yes No

Analysis:

From the above table and graph, it is analyzed that 92% respondents were satisfied with the
rate of interest and processing fees charged by HDFC and Axis Banks and only 8%
respondents were not satisfied with the processing fees charges by these banks.

Interpretation:

From the above analysis, it is revealed that majority i.e. 92% respondents were satisfied with
the rate of interest and processing fees charged by HDFC and Axis Banks.
Table 4.10: As per your experience, which bank is better in terms of the rate of interest
and processing charges/fees for personal loans?

Sr. No. Name of Bank No. of Respondents Percentage (%)

1. HDFC 67 67%
2. AXIS 33 33%
Total 100 100%

Graph 4.10: As per your experience, which bank is better in terms of the rate of interest
and processing charges/fees for personal loans?

Better Bank in terms of Interest rate and

Processing fees

AXIS 33%

Better Bank in terms of Interest

rate and Processing fees

HDFC 67%

0% 20% 40% 60% 80%

Analysis:

From the above table and graph, it is analyzed that 67% respondents stated that HDFC bank is
better in terms of the rate of interest and processing charges/fees for personal loans and only
33% respondents stated that axis bank is better in terms of the rate of interest and processing
charges/fees for personal loans.

Interpretation:

From the above analysis, it is revealed that majority i.e. 67% respondents stated that HDFC
bank is better in terms of the rate of interest and processing charges/fees for personal loans.
Table 4.11 Does HDFC/Axis Bank provide personal loan on floating rate of interest?

Sr. No. Name of Bank No. of Respondents Percentage (%)

1. Yes 00 00%
2. No 100 100%
Total: 100 100%

Graph 4.11 Does HDFC/Axis Bank provide personal loan on floating rate of interest?

HDFC/Axis Bank provide personal loan on

floating rate of interest
0%

Yes
No
100%

Analysis:

From the above table and graph, it is analyzed that 100% respondents stated that HDFC/Axis
Bank does not provide personal loan on floating rate of interest.

Interpretation:

From the above analysis, it is interpreted that 100% respondents stated that HDFC/Axis Bank
does not provide personal loan on floating rate of interest.
Table 4.12: What are the main factors which persuade you to avail personal loan?

Sr. No. Factors to avail Personal Loan No. of Respondents Percentage (%)
1. Easy Repayment 19 19%
2. Easy Documentation 26 26%
3. Attractive Rate of Interest 29 29%
4. Quick Processing 17 17%
5. Others 09 9%
Total 100 100%

Graph 4.12: What are the main factors which persuade you to avail personal loan?

Factors to avail Personal Loan

Others 9%

Quick Processing 17%

Attractive Rate of Interest 29% Factors to avail Personal Loan

Easy Documentation 26%

Easy Repayment 19%

0% 5% 10% 15% 20% 25% 30%

Analysis:

From the above table and graph, it is analyzed that 19% respondents avail personal loan by
considering main factor as easy repayment process, 26% respondents’ main factor is easy
documentation, 29% respondents main factor is attractive rate of interest, 17% respondents
main factor is quick processing and of 9% respondents’ factor is other than the above
mentioned.
Interpretation:

From the above analysis, it is interpreted that majority i.e. 29% respondents’ considerable
factor to avail personal loan was attractive rate of interest followed by 26% respondents’
considerable factor was easy documentation process of the banks.
Table 4.13: What grade you will assign to the services offered by HDFC Bank?

Sr. No. Grades No. of Respondents Percentage (%)

1. Excellent 12 12%
2. Very Good 47 47%
3. Good 31 31%
4. Fair 6 6%
5. Poor 4 4%
Total 100 100%
Graph 4.13: What grade you will assign to the services offered by HDFC Bank?

Grades assigned to the services offered by

HDFC Bank
4%

6% 12% Excellent
Very Good

31% Good
Fair
47%
Poor

Analysis:

From the above table and graph, it is analyzed that 12% respondents stated that the services
offered by HDFC Bank were excellent, 47% respondents stated Very Good, 31% respondents
stated good, 6% respondents stated fair and only 4 % respondents stated poor.

Interpretation:

From the above analysis, it is revealed that majority i.e. 47% respondents stated that the
services offered by HDFC Bank were Very Good followed by 31% respondents as services
were good.
Table 4.14: What grade you will assign to the services offered by Axis Bank?

Sr. No. Grades No. of Respondents Percentage

(%)
1. Excellent 07 7%
2. Very Good 38 34%
3. Good 24 24%
4. Fair 08 8%
5. Poor 23 27%
Total 100 100%
Graph 4.14: What grade you will assign to the services offered by Axis Bank?

Grades assigned to the services offered by Axis

Bank

7%
Excellent
27%
Very Good
34% Good
8% Fair
Poor
24%

Analysis:

From the above table and graph, it is analyzed that 7% respondents stated that the services
offered by Axis Bank were excellent, 34% respondents stated Very Good, 24% respondents
stated good, 8% respondents stated fair and 27 % respondents stated poor.

Interpretation:

From the above analysis, it is revealed that majority i.e. 34% respondents stated that the
services offered by Axis Bank were Very Good and on the contrary 27% respondents stated
that the services offered by Axis Bank were poor.
Table 4.15: What is your purpose towards taking personal loan?
Sr. No. Purpose of Personal Loan No. of Respondents Percentage (%)
1. Debt Consolidation 09 09%
2. Vehicle Financing 37 37%
3. Wedding Expenses 09 09%
4. Renovation of House 23 23%
5. Education Expenses 17 17%
6. Any Other Purpose 05 05%
Total 100 100%
Graph 4.15: What is your purpose towards taking personal loan?

Purpose of Personal Loan

Any Other Purpose 5%

Education Expenses 17%

Renovation of House 23%

Purpose of Personal Loan
Wedding Expenses 9%

Vehicle Financing 37%

Debt Consolidation 9%

0% 10% 20% 30% 40%

Analysis:
From the above table and graph, it is analyzed that 9% respondents’ purpose of taking
personal loan is debt consolidation, 37% respondents’ purpose is vehicle financing, 9%
respondents’ purpose is to meet wedding expenses, 23% respondents’ purpose is renovation
of house, 17% respondents’ purpose is to meet education expenses and only 5% respondents’
have taken personal loan for any other purposes than the above stated.

Interpretation:
From the above analysis, it is revealed that majority i.e. 37% respondents’ purpose of personal
loan is vehicle financing.
 CHAPTER-5

FINDINGS, CONCLUSION AND SUGGESTIONS

5.1 Findings:

 It is revealed that majority i.e. 67% respondents were male.

 It is revealed that majority i.e. 30% respondents were youth from age group of up to
30 years and 26% respondents from 30 to 40 years age group.
 It is revealed that majority i.e. 40% respondents annual income was between 1 lakh to
2 lakhs.
 It is revealed that majority i.e. 45% respondents were businessmen.
 It is revealed that majority i.e. 29% respondents’ source was official websites of banks
to knew about various schemes of personal loans.
 It is revealed that majority i.e. 100% respondents were taken unsecured personal loans,
as personal loans always unsecured.
 It is revealed that majority i.e. 42% respondents have taken personal loan between Rs.
2 Lakhs to 5 Lakhs.
 It is interpreted that majority i.e. 43% respondents repaid their loan within 1 to 3
years.
 It is revealed that majority i.e. 92% respondents were satisfied with the rate of interest
and processing fees charged by HDFC and Axis Banks.
 It is revealed that majority i.e. 67% respondents stated that HDFC bank is better in
terms of the rate of interest and processing charges/fees for personal loans.
 It is interpreted that 100% respondents stated that HDFC/Axis Bank does not provide
personal loan on floating rate of interest.
 It is interpreted that majority i.e. 29% respondents’ considerable factor to avail
personal loan was attractive rate of interest followed by 26% respondents’
considerable factor was easy documentation process of the banks.
 It is revealed that majority i.e. 47% respondents stated that the services offered by
HDFC Bank were Very Good followed by 31% respondents as services were good.
 It is revealed that majority i.e. 34% respondents stated that the services offered by
Axis Bank were Very Good and on the contrary 27% respondents stated that the
services offered by Axis Bank were poor.
 It is revealed that majority i.e. 37% respondents’ purpose of personal loan is vehicle
financing.
5.2 Conclusions:

 Customers can avoid high rate of interest and compare with other banks and financiers
rate during loan availing time.
 Prevention is better than cure. So customers need to honor their EMI cheques on time.
Otherwise they can face some difficult situation with bankers and finance. In future
they can not avail any loan with bankers and finance if they do not repay the amount
on time.
 End users can think about their repaying capacity. They can calculate their personal
loan EMI at 1:4 calculations and this will be very useful to them for prompt
repayment.
 Bankers and finance can provide prompt repayment rebate to the customers and this
will be a good encouragement to the customers for their repayment.
 CIBIL is an important tool to the bankers for determining about their loan sanctioning.
So customer need to maintain their credit record with all the bankers and financiers as
good one.
Suggestions & Recommendations:-

The following suggestions have been formulated on the basis of above study. These set of
suggestions might help to HDFC Bank & Axis Bank to improve their quality of service
regarding loan provisions and simultaneously these suggestions help them to tackle the
competition prevailing in the market, thereby achieving success in the future.

 Firstly HDFC Bank and Axis Bank should create awareness among the common
public about the various personal loan schemes of they are providing.
 In order to create awareness regarding the loan schemes an electronic medium of
media can put to use to advertise about the schemes and services provided by Banks.
This would help to change the attitude of the people regarding both the banks.
 The interest rates should be regularly revised in order to attract more and more
customer. Some new plans should be introduced regularly to cater the special needs of
customer which provides them more offerings and benefits.
 New strategies should be made by both the banks which enable them to face the
competition with other private leading Non-Banking Financial Companies.
 Both the banks need to focus more on providing value added services to its customer.
This will create Brand loyalty among customers which indirectly attract more and
more customer because a satisfied customer will always bring two more new
customers.
 The management of both the banks should be more efficient which enables in quick
processing of the task regarding loans disbursement and loan collection; this will
enable efficiency in the working capital cycle of both the banks.
 There should be a strong customer relationship management concept in both the banks
which help them to understand the special needs of the customer. Accordingly banks
formulate schemes should be maintained.
 Both the banks need to concentrate on new target market by expanding its business
through introducing new loan schemes and services. Currently these banks are
providing loans under main two category i.e. Parivaar and vyapaar so, it looks limited.
Therefore both the banks need to introduce new schemes to enter in to new target
market.
APPENDICES:

BIBLIOGRAPHY

Books:

 Srinivasan and Murugan, (2010) “Accounting for Management”, S. Chand &

Company Ltd, New Delhi – 110055, pp- 212-213.

 Ramasamy, (2011) “Management accounting”, Gold books Publishing House,

Srivilliputtur-626125, PP-80-86.

 Majhi and Khatua, (2011) “Business Research methods”, Himalaya Publishing House,
Mumbai-400004, PP-278.

 Kothari C. R., (2010) “Research Methodology (Methods & Techniques)”, New Age
International (P) Ltd Publishers, New Delhi-110002, PP-258.

 Gupta, (2010) “Statistical methods”, S. Chand & Sons, New Delhi-110002 ,PP 1011-
1013.

 Ahmed, (2006), ”Financial Reforms in India” Mittal Publications, First Edition, Delhi

 Arora, (2010) “Accounting for Management”, Himalaya Publishing House, Mumbai

400004, PP- 9.13 & 9.39.

Journals:

 Adeoye and Lawanson, (2012) Customers Satisfaction and its Implications for Bank
Performance in Nigeria, British Journal of Arts and Social Sciences ISSN: 2046-
9578, Vol.5 No.1.
 Bena, (2010) Evaluating customer satisfaction in banking services, Management &
Marketing (2010) Vol. 5, No. 2, pp. 143-150.
 Chandrashekharan, (2002), The relationship between service quality and customer
satisfaction – a factor specific approach", Journal of Services Marketing, Vol. 16 Iss 4
pp. 363 – 379.
  Chaudhary and Sharma, (2011) Performance of Indian Public Sector & Private Sectors
banks a Comparative Study, International Journal Of Innovation, Management &
Technology, Vol 2,No 3,June 2011,PP- 249-256.
 Kunt and Huizinga, (2013) Determinants of Commercial Bank Interest Margins and
Profitability: Some International Evidence. The world banks Economic Review VOL.
13. No2.
 Kangis Peter and Vassilis Voukelatos, (1997) Private and public banks: a comparison
of customer expectations and perceptions, International Journal of Bank Marketing,
Vol. 15, No. 7, pp.279–287, MCB University Press.

Websites/Weblinks:

 WWW.HDFCBANK.ORG
 WWW.AXISBANK .ORG
 www.bajajfinservlendig.in/pages/personal-loan.aspx
 www.fullertonindia.com/products.html
 http://shriramcity.in/our-Products-Personal-Finance.aspx
 http://www.hdfcbank.com/search/personal-loans/index.asp?
 www.cibil.com/faq
 www.icicibank.com/personalBanking/loans/personal-loan/index-html
 www.axisbank.com/personal/loans/personal-loan/personal-loan-features.aspx
 http://www.bankofindia.com/personalLoans.aspx
 http://www.pubindia.in/en/ui/personalLoan.aspx
 http://www.kvb.co.in/personal/loan.html
 http://www.bajajallianz.com/corp/lite/group-members-families.
 http://www.indianbank.in/rate_loan_personal.php
 QUESTIONNAIRE

Dear Sir/Madam,

I am Mr. Ajinkya Chandankar student of Department of Research & P.G. Studies in

Science & Management, Vidya Bharati Mahavidyalaya, Amravati, doing my dissertation
topic on, “Comparative Analysis of Personal Loan offered by HDFC Bank and Axis
Bank”, as a part of my MBA curriculum.

I would be grateful if you spare few minutes to complete this questionnaire. I assure you that
the information provides by you will be strictly used for research purpose only.

Thanking You.

Name of the Respondent:_________________________________________________

1. Gender of the Respondents:-

Male Female Transgender

2. Age of the Respondents:-

Up to 30 yrs 30-40 yrs 40-50 yrs More than 50 yrs

3. Annual Incomes of the Respondents:-

A Up to Rs. 1 Lakh A Rs. 1 to Rs. 2 Lakhs

b b
A Rs. 2 Lakhs to Rs. 5 Lakhs A Above Rs. 5 Lakhs
o o
bv bv
4. Occupation of the Respondents:-
oe oe
v v
Ae5 Government Employee e5
Private Employee
b
o 5L Businessman 5L
Professional
va a
eL k Lk
ah ah
5ks ks
h h
LsA sA
ab b
k
5. From which source you knew about the various schemes of personal loans of banks?:-

News Paper Television Social Media

Official website of Banks Friends Relatives

6. Which type of loan you availed from banks?

Secured Personal Loan Unsecured Personal Loan

7. How much amount of personal loan you have taken from any bank?

Upto Rs. 2 lakhs Between Rs. 2 Lakhs to 5 lakhs

Between Rs. 5 Lakhs to 10 Lakhs Above Rs. 10 Lakhs

8. What is the repayment period of your loan?

Less than 1 Years 1- to 3 Years

3 to 5 Years More than 5 Years

9. Are you satisfied with the rate of interest and processing fees charged by the HDFC
and Axis Banks?

Yes No

10. As per your experience, which bank is better in terms of the rate of interest and
processing charges/fees for personal loans?

HDFC AXIS

11. Does HDFC/Axis Bank provide personal loan on floating rate of interest?

Yes No

12. What are the main factors which persuade you to avail personal loan?

Easy Repayment Easy Documentation Attractive Rate of Interest

Quick Processing Others

13. What grade you will assign to the services offered by HDFC Bank?

Excellent Very Good Good Fair

Poor

14. What grade you will assign to the services offered by Axis Bank?

Excellent Very Good Good Fair

Poor

15. What is your purpose towards taking personal loan?

Debt Consolidation Vehicle Financing Wedding Expenses

Renovation of House Education Expenses Any Other Purpose

****Thanks a lot for your kind co-operation****