© 2019 IJRAR June 2019, Volume 6, Issue 2 www.ijrar.
org (E-ISSN 2348-1269, P- ISSN 2349-5138)
A STUDY ON CUSTOMERS PERCEPTION
TOWARDS HOUSE LOAN
Mrs. S Dharchana1, M Lobha Mithirai2, P Niranjana 3.
1 Assistant professor, Department of B.Com (A&F) and B.Com (BA), PSGR Krishnammal College
for women, Coimbatore.
2 & 3 III B.Com (A&F), PSGR Krishnammal College for women, Coimbatore.
ABSTRACT:
A person always keeps the first basic need as to own a house. Housing is also accepted as a key sector
of the national economy which measures the standard of living and economic condition of the country. To
attract customers bank provide home loans at cheaper rate. This study takes into account the choice of the
customer, reasons, problems and knowledge about house loan.
KEY WORDS:
House Loan, consumer perception, problems.
INTRODUCTION:
A person always keeps the first basic need as to own a house. Housing is also accepted as a key sector
of the national economy which measures the standard of living and economic condition of the country. Good
housing is important for human development and welfare. It provides shelter, security, amenities and privacy to
human beings. To attract customers bank provide home loans at cheaper rate. The more information the
customer have about a product or service, the more comfortable they are while buying the product. Positive
customer perception is an invaluable tool in marketing. Customers are the Kings of any business. It is an
important key to success. This study takes into account the choice of the customer, reasons, problems and
knowledge about house loan. There are many problems faced by customers while borrowing loans from banks.
Few problems are as lack of knowledge, procedural delays, desired amount not being sanctioned and credit
score. This study aims to identify those problems faced by customers while borrowing home loans from banks.
When there is lot of problems the study was made to know the consumer perception towards the loan.
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LITERATURE REVIEW:
"Factors affecting Customers' decision for taking out bank loans: A case of Greek customers"- Frangos
Et Al (2012)
He studied The Factors affecting Decision to choose a Bank for Loan among Greek Citizens. The
Survey Was Carried By Administering Questionnaires To Citizens Of Athens. Using Factor Analysis Variables
Like Satisfaction, Interest Rates, Insurances/Guarantees, Instalments, General Loan Factors, Service Quality,
And Shop Design And Customer Service Were Selected. It Was Then Observed That Interest Rate Followed
By Service Quality Factors Are Significant Variables Affecting Loan Taking Decision. Considering
Demographic Factors, It Was Observed That Females, Young Individuals, Employed And Educated
Respondents Generally Those Working In Public Sector Having Gross Monthly Income Less Than 1000 Euros
And Annual Income Less Than 8000 Euros And Belonging To Personal Property Band Less Than 10000 Euros
Prefer To Take Loan.
“A study on comprehensive problems of H.D.F.C. and S.B.I. loan takers in Andhra Pradesh State” - Rao
(2013)
This study discussed about the perception and problems of home loan takers in Andhra Pradesh. The
author has focused on research by taking into account H.D.F.C. and S.B.I. bank. The paper discussed about the
Housing Policy frame work, trends and progress in Housing Finance, the operational performance of H.D.F.C.
and S.B.I. with regard to providing housing finance to individuals, perception and problems of home loan takers
in the State of Andhra Pradesh. The author concluded by stating that the Housing Finance in India faced a
number of set-back in decades but the designing of a shelter policy, the organization of the housing finance
market, the introduction of fiscal incentives have bought about a number of changes in the housing finance. The
services and product innovations are the key tools for success.
“A conceptualization of a customer – Bank bond in the context of the twenty first century U.K retail
banking industry”- Rizal Ahmad (2005)
It studied the conceptualization of a customer- bank bond. The primary bond consists of utility,
reliability and overall value of the services. The secondary bonds are friendliness, empathy, helpfulness, and
convenience and user friendliness of banking infrastructure.
STATEMENT OF THE PROBLEM:
The more information the customer have about a product or service, the more comfortable they are
while buying the product. Positive customer perception is an invaluable tool in marketing. Customers are the
Kings of any business. It is an important key to success. So it is important to find about customers’ perception
towards home loans and the problems faced by them while availing loan. Objectives are framed according to
that.
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OBJECTIVES OF THE STUDY:
1. To know customers perception towards house loan.
2. To identify the problems faced by the customers while borrowing loans from bank.
RESEARCH METHODOLOGY:
This research is based on the primary data collected through the questionnaire from the respondents
who have taken home loans. The data are analysed with the help of SPSS. The study sample size is 100
respondents. Convenient sampling method was used here. It is a demographic study. The tools used in the
study was percentage and Friedman test. From this it results were found.
ANALYSIS OF THE RESULTS:
Table 1: Demographics of the customers
Factor Frequency Percent
Gender Male 38 45.0
Female 62 55.0
Marital status Married 38 38.0
Unmarried 62 62.0
Age Below 30 years 72 72.0
30 – 40 years 14 14.0
40 – 50 years 9 9.0
50 & above 5 5.0
Level of education School level 7 7.0
Under graduate 61 61.0
Post graduate 23 23.0
Diploma 3 3.0
Professional 6 6.0
Occupation Employed 49 49.0
Business 24 24.0
Professional 17 17.0
Home maker 10 10.0
Monthly income Less than 20000 23 23.0
20000 – 30000 34 34.0
30000 – 40000 24 24.0
40000 and above 19 19.0
Period taken for 5 – 15 years
61 61.0
repayment loan
15 – 20 years 30 30.0
20 – 25 years 5 5.0
25 – 30 years 4 4.0
Out of one hundred respondents, 55% are female respondents and 45% are male respondents. It shows
that the majority is female. Maximum respondents are unmarried (62.0%) and minimum respondents are
married 38%. Maximum respondents opted for home loan are below 30 years (72%), 14% are between 30 – 40
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years, 9% are between 40 – 50 years, 5% are 50 and above. Maximum respondents of 61% studied up to under
graduate, 23% studied up to post graduate, 7% studied up to school level, 6% studied up to professional, 3%
studied up to diploma. 49% of the respondents are employed, 24% of the respondents are doing business, 17%
are professionals and 10% are home makers. Respondents with the income less than 20000 are 23%, the
monthly income 20000 – 30000 is the highest of 34%. 30000 – 40000 are 24% which is nearer to the income of
the people less than 20000. The respondents with the income above 40000 have 19% as their preference
towards housing loan which is least among the other income levels. Most of the respondents (61%) prefers
repayment period 5 – 15 years. And 30% of respondents for 15 – 20 years, while 5% for 20 – 30 years and 4%
for 30 – 40 years.
Table 2: problems and preference
Factor Frequency Percent
Rate of interest 8.40% - 8.90% 62 62.0
8.90% - 9.40% 24 24.0
9.40% - 9.90% 9 9.0
9.90% - 10.50% 5 5.0
Type of bank Nationalized bank 43 43.0
Private bank 48 48.0
Other financial institutions 9 9.0
Recommendation of bank Yes 78 78.0
No 22 22.0
Approach home loan Direct approach
63 63.0
through
Builder 9 9.0
Agents 13 13.0
Loan personal in bank 15 15.0
Reasons to avail loan Investment 32 32.0
Desire for home 52 52.0
Income tax relief 8 8.0
To receive rent income 8 8.0
Duration by bank to 0 – 1 months
28 28.0
sanction
0 – 2 months 36 36.0
0 – 3 months 17 17.0
More than 3 months 19 19.0
Source of knowledge Television advertisement
21 21.0
about bank
Friends 43 43.0
Relatives 21 21.0
Bank call 14 14.0
Rate of interest preferred Fixed rate of interest 72 72.0
Fluctuating rate of interest 28 28.0
Problems faced Lack of knowledge 30 30.0
Procedural delays 34 34.0
Non-cooperation 7 7.0
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Desired loan amount not
20 20.0
being sanctioned
Credit score issue 9 9.0
Out of one hundred respondents, 62% of respondents prefer 8.40% - 8.90% of rate of interest. The least
preference was given to 9.90% - 10.50% interest. Maximum number of respondents have chosen private bank
to avail house loan and minimum in other financial institution. 78% of respondents have recommended the
bank chosen by them and 22% not recommended. 21% of respondents has got the source of knowledge about
bank through televisions, 43% through friends, 21% through relatives, 14% through bank calls.72% of
respondents made a preference for fixed rate of interest rather than fluctuating rate of interest. 30% of
respondents has a problem of lacking knowledge about house loan, 34% faced problem of procedural delays,
7% faced non-cooperation, 20% for desired loan not sanctioned, 9% for credit score.
Table 3: Rank Table
Mean Rank
Home improvement loan 3.02
Home extension loan 3.08
Loan to professional 3.30
Home equity loan 3.65
Loan against rent receivables 4.00
Loan to professional for non-
3.95
residential premises
Table 4: Test Statisticsa
N 99
Chi-Square 26.230
Df 5
Asymp. Sig. .000
a. Friedman Test
It is seen from above table that home improvement loan has got the highest importance with lowest
mean rank of 3.02. Home extension loan get the next highest importance with mean of rank 3.08. Professional
loan got the next importance with the mean of rank 3.30. Followed by next importance for equity loan with the
mean of rank 3.65. Followed by the non-resident loan next importance is given with the mean of rank 3.95.
Loan against rent receivable has got the lowest importance with the highest mean rank of 4.00.
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FINDINGS:
Keeping the data as a base, it is found that the customers are happy with the service experienced,
because,
78% of the customers are ready to recommend their banks or financial institutions to others.
Most of the customers avail loan with the desire for home and have chosen to be comfortable with the
fixed rate of interest.
The problems faced by the customers are procedural delays followed by lack of knowledge.
So, the perception of the customers towards house loan is positive.
CONCLUSION:
There are many comments and thoughts about house loan. The customers are satisfied with the service
though they don’t have knowledge about the same. The perception of the customers is positive. The study
showcases the perception of the customers in availing house loan, problems faced by the customers and the
knowledge they hold about home loan. Irrespective of satisfaction level the desire to acquire the demand forces
a customer to take a service. Though the study have some limitations it was a small attempt to know the view of
customers towards house loan.
REFERENCE:
1. Factors affecting Customers' decision for taking out bank loans: A case of Greek customers- Frangos Et
Al (2012)
2. A study on comprehensive problems of H.D.F.C. and S.B.I. loan takers in Andhra Pradesh State - Rao
(2013)
3. A conceptualization of a customer – Bank bond in the context of the twenty first century U.K retail
banking industry- Rizal Ahmad (2005)
4. www.google.com
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