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Research
journali’s ournal of
Commerce
Vol. 1 | No. 2 December| 2013
1
www.researchjournali.com
 
Mrs.S.Rajalakshmi
AssistantProfessorofcommerce,GovindammalAditanarcollegeforwomen,Tiruchendur,ThoothukodiTamilnadu
Mrs.C.Pappeswari
AssistantProfessorofcommerce,GovindammalAditanarcollegeforwomen,Tiruchendur,ThoothukodiTamilnadu
 Mr.A.venkatesh
AssistantProfessorofcommerce,AmbaiArtscollege,TirunelveliDistrict,Tamilnadu
A STUDY ON HOUSING LOAN BORROWERS OF PUBLIC AND PRIVATE SECTOR BANKS IN THOOTHUKUDI AREA
 
 
Research
journali’s ournal of
Commerce
Vol. 1 | No. 2 December| 2013
2
www.researchjournali.com
 
Abstract
 
Housing is a primary human need next in importance only to food and clothing. A first priority for a youngster who beings life is therefore to plan for a house. This takes precedence over other household expenditure and creature needs. Housing, however, is a major expenditure and cannot be funded out of a
family‟s normal monthly income or savings. The prospective homeowner must look for a loan substantial in
size and so structured that he can repay it over a longer p
eriod of time, in many cases almost one‟s entire
working life. Loan is offered to a borrower to purchase or build a new house on the basis of his/her eligibility
and the bank‟s lending rules. One of the important basic human needs is shelter. House is the
ultimate dream of every middle class family. Government gave encouragement for house finance subsidiaries by offering number of tax concessions to individuals with the overall encouragement given to this sector, a number of  players entered in housing finance. One of the most important benefits of taking a home loan is the interest rate that is allowed on the home loan. Fixed and variable interest rate options are also available for home loans. Many financiers also offer home improvement loans at the same interest rate as they offer the home loans.
Keyword
s: Housing loan, Types of housing loan, Attitude of housing loan borrowers.
1.
 
Introduction
 
Every human being aspires to have his own house to live in. After food and clothing, housing is the third most important human requirement. On an average a person spends almost two-thirds of his life in a house which is his sanctuary in his old age. Adequate housing is therefore a fundamental need of human beings and an essential pre-requisite for physical, intellectual and mental development. Blessed are those who live in their own house and fortunate are those who have the money to buy one. But all are not privileged to buy a house of their own. For many such less privileged, buying a house has become possible in modern times through housing loans. Though shelter was enshrined as a fundamental right in the constitution, housing did not get the attention it reserved. This was perhaps due to the fact that at that time nobody expected the problem of housing to assume the present gigantic proportions. Proper housing, even at a lower scale, has never kept pace with the minimum requirements of the people. The housing backlog has been compounded by the high rate of  population growth. Inadequate housing facilities have led to the rapid growth of slums and unauthorized settlements, poor quality of services, housing land prices and increasing costs of construction. In rural areas the situation is even more alarming. The Government and some public sector undertakings have been trying
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Research
journali’s ournal of
Commerce
Vol. 1 | No. 2 December| 2013
3
www.researchjournali.com
 
to tackle the problem but their efforts do not much even the fringe of the problem. The central and state governments cannot solve this problem.So the Life Insurance Corporation of India and housing societies entered the field of housing loans for their customers. Today these are 350 housing finance companies registered with the registrar of companies, of these 29 have been approved by National Housing Bank for financial assistance. The housing finance industry has been borrowing at the rate of nearly 35% for the last two years.Over the last 3 years Commercial banks and Private sector banks have been playing an important role in housing finance. All Commercial banks and Private sector banks are now emerging as lenders in the segment, taking a slew initiatives in the form of opening dedicated outfits/cells to cater to the ever-increasing demand for housing loans, offering competitive interest rates with fixed/ variable options, Waiver of  processing fee, Free additional attractive packages and flexibilities in housing loan Schemes. Generally the
traditional trend of the term “Housing Loans” or “Housing Finance” means finance for buying or modifying a  property. Hence “Housing Finance” may be defined as the financial resources for an individual
 or a group of  persons used facially for the purpose of housing. A study of the housing loan schemes offered by public sector banks and private sector banks would pave the way taking certain policy decisions for improving these housing loan schemes.
2.
 
Public Sectors Banks
Banks which are owned by government are known as public sector banks. At present in India, there are 26 largest public sector banks. Under this study only deals with three kinds of public sector banks. That is a) SBI  b) CB c) IOB
2.1
 
State Bank Of India (SBI)
The state bank of India was established on 18
th
 July 1955, under the state bank of India act to take over the  business of the imperial bank of India. SBI is owned by the government of India and is the largest bank in the India sub co
ntinent. SBI is the second largest bank in the world. SBI has been awarded “The Most Preferred Home Loan Provider” by AWAAZ Consumer Awards. SBI home loans give concession on interest rates on
GREEN HOMES under its environment protection program. SBI offer 
s „SBI
-
optima‟ additional home loans and „SBI
-
Home line‟ special personal loans for existing home loan borrowers who have a repayment record
of 3years, etc.
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Research
journali’s ournal of
Commerce
Vol. 1 | No. 2 December| 2013
4
www.researchjournali.com
 
State bank of India housing finance offers loan for construction and renovation of houses at the lowest interest rates which range from10.05% & goes up to 10.20 %p.a.
Highlights Interest Rates
2.2 Canara Bank (CB)
The canara bank is a government of India undertaking, and carries on all banking business. The bank was  brought into existence by an ordinance passed on the 19
th
 July 1969 by the Central Government. In terms of the ordinance the undertaking of the Canara bank was rested to and transferred to the new bank. This ordinance was replaced by the banking companies (Acquisition and Transfer of Undertaking) Act, 1969. This act was declared null & void by the Supreme Court on the 10
th
 of February 1970 and subsequently the ordinance was promulgated. Then the banking companies act, 1970 was passed and it was made effective retrospectively from 19
th
 July 1969. For construction, purchase, repairs, additions, renovations of residential house, flat include the Purchase of land and construction there on. For taking over of the housing loan liability with other recognized housing finance companies, housing boards, co-operative banks, co-operative societies and commercial banks at our  prevailing low rate on interest. Canara bank of housing finance offers loan for construction and renovation of houses at the lowest interest rates which range from 10.25% & goes up to 10.50% p.a. Interest Rate 10.20% Loan Amount Minimum
 – 
 `5,00,000 Maximum
 – 
 `30,00,000 Tenure Minimum
 – 
 5 years Maximum
 – 
 30 years Time to Process Loan 7 days
Tenure Interest Type Interest Rate Offer
1-30 years Floating 10.20% Regular (up to `5Lakhs-10.05% Above`3 Lakhs-10.20% )
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