STUDY ON HOME LOAN

PROVIDED BY BAJAJ
FINANCE

Bachelor Of Management Studies

Semester VI
(2024-25)

Submitted by
DUBEY SANJEEV VINOD PUSHPA
Roll no 19

Matrushri Kashiben Motilal Patel Senior

College
of Commerce & Science
Padmakar Colony, Cholegaon, Thakurli (E)
 STUDY ON HOME LOAN
PROVIDED BY BAJAJ
FINANCE

Bachelor Of Management Studies

Semester

VI

Submitted

In Partial Fulfillment of the

requirements For the Award of

Degree of

Bachelor Of Management Studies

By
DUBEY SANJEEV VINOD PUSHPA
Roll no 19

Matrushri Kashiben Motilal Patel Senior

 College
of Commerce & Science
Padmakar Colony, Cholegaon, Thakurli (E)
 DECLARATION

I, Mr. DUBEY SANJEEV VINOD PUSHPA a student

of T.Y.B.M.S. Semester VI (2024-2025) hereby
declare that I have completed the project on
“STUDY ON HOME LOAN PROVIDED BY
BAJAJ FINANCE”
The information submitted is true and original to the
best of my knowledge.

(Signature of Student)
DUBEY SANJEEV VINOD
PUSHPA
19
 Matrushri Kashiben Motilal Patel Senior
College of Commerce & Science,
Padmakar Colony, Cholegaon, Thakurli (E)

CERTIFICATE
This is to certify that Mr. DUBEY SANJEEV VINOD
PUSHPA , Roll no: 19 of Third Year B.M.S Semester VI
(2024-2025) has successfully completed the project on
INTRODUCTION TO DEMAT ACCOUNT under the
guidance of [Link]. Pujita Penamala.

I/C Principal
Dr. Madhuri Nandanwar

Course Coordinator
Asst. Prof. ANJU PAL

Project Guide/ Internal Examiner

[Link]. Pujita Penemala

External Examiner
 ACKNOWLEDGEMENT

To list who all have helped me is difficult because they

are so numerous and the depth is so enormous. I would
like to acknowledge the following as being idealistic
channels and fresh dimensions in the completion of
this project.

I take this opportunity to thank the University of

Mumbai for giving me the chance to do this project. I
would like to thank my I/C Principal, Dr. Madhuri
M. Nandanwar for providing the necessary facilities
required for completion of this project.

I take this opportunity to thank our Coordinator

[Link]. ANJU PAL, for her moral support and
guidance.

I would also like to express my sincere gratitude

towards my project guide [Link] Pujita
Penemala whose guidance and care made the project
successful.

I would like to thank my College Library, for having

provided various reference books and magazines
related to my project.

Lastly, I would like to thank each and every person

who directly or indirectly helped me in the
completion of the project especially my Parents
and Peers who supported me throughout my
project.
SR CHAPTER TITLE PAG
N E NO
O

1 1 Introuction 1-28

2 2 Literature Review 29-31

3 3 Research Methodology 32-34

4 4 Data Analysis and interpretation 35-52

5 5 Conclusion 53-58

6 6 Finding & Review 59-61

7 7 Recommendation 62-63

8 8 Reference And Bibliography 63-69

9 9 ANNEXURE 70
 CHAPTER 1
INTRODUCTION
 1.1 INTRODUCTION
Money is the lifeblood of any business, playing a crucial role in ensuring smooth operations,
expansion, and overall financial stability. Every business, whether small or large, requires funds to
meet various financial needs, such as purchasing raw materials, maintaining inventory, paying
salaries, expanding production, marketing products, and investing in new projects. These financial
needs can be broadly classified into two categories: short-term requirements and long-term
requirements.

1. Short-term financial requirements refer to the immediate or operational expenses of a

business that need to be covered within a short period, typically less than a year. These
include expenses such as wages, utility bills, rent, and inventory purchases.
2. Long-term financial requirements involve funding for capital investments, infrastructure
development, acquiring fixed assets (such as land, buildings, machinery, and vehicles), and
business expansion, which require large sums of money for a prolonged period, usually
beyond three years.

Since businesses often do not have sufficient internal funds to meet all these financial requirements,
they seek financial assistance from external sources. Among the most common and reliable sources
of external finance are loans and advances provided by financial institutions such as banks, non-
banking financial companies (NBFCs), and government financial schemes.

Understanding Loans and Advances

Loans and advances are both forms of financial assistance provided to businesses, but they serve
different purposes and have distinct characteristics.

1. Loans: A loan is a sum of money borrowed from a financial institution or lender for a
specified purpose, with the obligation to repay the principal amount along with interest over a
predetermined period. Loans are usually granted for a longer duration and can be repaid in
fixed installments or in a lump sum. They are often classified into two main types based on
their repayment period:
o Term Loans: These are loans that must be repaid over an extended period, generally
beyond three years. Term loans are primarily used for capital investments such as
purchasing machinery, setting up new units, or business expansion.
o Demand Loans: These loans are repayable within a shorter duration, typically within
three years, based on the lender's demand for repayment.
2. Advances: Advances, on the other hand, are short-term financial aids provided by banks to
businesses to help them meet their working capital requirements. Unlike loans, advances are
generally meant for immediate operational needs and are to be repaid within a year. These
advances can take various forms, such as overdrafts, cash credits, and bill discounting.

Key Differences Between Loans and Advances

Although loans and advances are both forms of financial support, they
differ in several aspects:
  Purpose: Loans are typically taken for long-term investments, whereas advances are meant
for short-term working capital needs.
 Duration: Loans have a longer repayment period (more than one year), whereas advances are
usually repaid within a year.
 Repayment Structure: Loans can be repaid in installments or lump sum, while advances are
repaid within a short period, often through business transactions.
 Security Requirement: Loans generally require collateral or security, while advances may
be granted based on business credibility and financial strength.

Since loans and advances play a crucial role in business financing, it is essential for business owners
to carefully assess their financial needs, repayment capability, and the terms offered by financial
institutions before opting for either. A proper understanding of these financial instruments can help
businesses effectively manage their cash flow, optimize their financial resources, and achieve
sustainable growth.

Meaning of Loans and Advances :-

The term ‘loan’ refers to the amount borrowed by one person from another. The amount
is in the nature of loan and refers to the sum paid to the borrower. Thus From the view
point of borrower, it is ‘borrowing’ and from the view point of bank, it is ‘lending’. Loan
may be regarded as ‘credit’ granted where the money is disbursed and its recovery is
made on a later date. It is a debt for the borrower. While granting loans, credit is given for
a definite purpose and for a predetermined period. Interest is charged on the loan at
agreed rate and intervals of payment. ‘Advance’ on the other hand, isa ‘credit facility’
granted by the bank. Banks grant advances largely for short-term purposes, such as
purchase of goods traded in and meeting other short-term trading liabilities. There is a
sense of debt in loan, whereas an advance is a facility being availed of by the borrower.
However, like loans, advances are also to be repaid. Thus a credit facility- repayable in
installments over a period is termed as loan while a credit facility repayable within one
year may be known as advances.

Definition of Loan:-
The amount lent by the lender to the borrower for a specific purpose like the construction
of the building, capital requirements and purchase of machinery and so on, for a
particularperiod of time is known as Loan. In general, loans are granted by the banks and
financial
institutions. It is an obligation which needs to be repaid back after the expiry of the
stipulated period. The loan carries an interest rate on the debt advanced. Before advancing
loans, the lending institution checks the credit report of the customer, to know about his
credibility,financial position and capacity to pay.

According to Thembi Palane “a loan is a financial transaction in which one party (the
lender) agrees to give another party (the borrower) a certain amount of money with the
total expectation of repayment agreed upon by both parties. Usually there’s a
predetermined time for repaying a loan with conditions attached to it” According to
oxford dictionary “Money that someone borrow from a bank or other financial
 Loan Examples:
o Home Loan: Used for purchasing property.
o Car Loan: Taken for buying a vehicle.
o Business Loan: For expansion, machinery, or capital expenditure.
o Education Loan: Covers tuition fees and related expenses.
 Advance Examples:
o Overdraft: A facility allowing businesses to withdraw more than their
account balance.
o Cash Credit: A loan facility provided to businesses for operational expenses.
o Bill Discounting: Businesses can get cash in advance by discounting their
invoices before they are due.

4. When to Choose a Loan vs. an Advance?

 If you need long-term financial assistance (e.g., buying assets, expanding business)
Choose a Loan.
 If you require short-term funds for operational needs (e.g., managing daily
expenses, buying stock) Opt for an Advance.
 Loans and advances serve different financial needs. While loans are suitable for long-
term projects, advances help businesses maintain cash flow in the short term.
Understanding their differences allows individuals and companies to make better
financial decisions.

1.2 Introduction to Bajaj Fianace

Bajaj Finance Ltd. (‘BFL’, ‘Bajaj Finance’, or ‘the Company’), a
subsidiary of Bajaj Finserv Ltd., is a deposit taking Non-Banking
Financial Company (NBFC-D) registered with the Reserve Bank of India
(RBI) and is classified as an NBFC-Investment and Credit Company
(NBFC-ICC). BFL is engaged in the business of lending and acceptance
of deposits. It has a diversified lending portfolio across retail, SMEs, and
commercial customers with significant presence in both urban and rural
India. It accepts public and corporate deposits and offers a variety of
financial services products to its customers. BFL, a thirty- five-year-old
enterprise, has now become a leading player in the NBFC sector in India
and on a consolidated basis, it has a franchise of 69.14 million customers.
BFL has the highest domestic credit rating of AAA/Stable for long-term
borrowing, A1+ for short-term borrowing, and CRISIL AAA/Stable &
[ICRA]AAA(Stable) for its FD program. It has a long-term issuer credit
rating of BB+/Positive and a short-term rating of B by S&P Global
ratings.
Bajaj Finance Limited (BFL) is a deposit-taking Indian non-
banking financial company headquartered in Pune. It has a customer
base of 88.11 million and holds assets under management worth
₹354,192 crore (US$41 billion), as of June 2024.
As per the 2023 list of NBFCs issued by the Reserve Bank of India, Bajaj
Finance Limited holds the second position in the upper layer based on
As of March 2023, the company deals in consumer lending, SME (small
and medium-sized enterprises) lending, commercial lending, rural
lending, deposits, and wealth management. And, across 3800 towns, it
has 294 consumer branches and 497 rural locations with over 33,000+
distribution points and 1,50,000+ stores.

Most of Bajaj Finance's revenue is generated from suppliers who pay for
access to their larger customer base As of December 2024, mortgages
currently make up 31% of its consolidated AUM, while SME lending
accounts for 14% and commercial lending for
13%.

In the past, Bajaj Finance had been working with RBL Bank and DBS
Bank to issue co- branded credit cards. But, in early December 2024, the
company ended its partnerships due to new Reserve Bank of India rules
restricting the role of non-banking partners in such agreements.

1.3History of Bajaj Fianace

Originally incorporated as Bajaj Auto Finance Limited on March 25,
1987, as a non-banking financial company, primarily focused on
providing two and three-wheeler finance. After 11 years in the auto
finance market, Bajaj Auto Finance Ltd launched its initial public issue
of equity share and was listed on the Bombay Stock Exchange and
National Stock Exchange of India. At the turn of the 20th century, the
company ventured into the consumer durables
finance sector and started offering small-size loansIn the subsequent
years, Bajaj Auto Finance diversified into business and property loans as
well.
In 2006, the company's assets under management hit the ₹1,000 crore
(US$120 million). In 2010, the company's registered name changed from
Bajaj Auto Finance Limited to Bajaj Finance Limited.[18] In its first seven
years, Bajaj Finance mainly borrowed wholesale and lent retail. Since
2014, it has also borrowed retail and lent wholesale, diversifying its
liability profile.[19]

By 2015, BFL had set up a series of Disaster Recovery (DR) data centers
for business continuity.[20] Additionally, by 2020, it had started using data
analytics and big data tools.[21]

In January 2023, Bajaj Finance launched its loan against property (LAP)
business for micro, small, and medium-sized enterprise (MSME)
customers.[22][23] By 2020, 60% of Bajaj Finance's workload was on cloud
and originally, they aimed to create a super-app for existing customers,
but due to COVID-19 pandemic in India, they expanded the plan to
encompass various services by integrating five proprietary marketplaces
within their ecosystem—EMI store, insurance, mutual funds, broking,
and health.[24]
As of September 30, 2024, money markets made up 47% of company's
borrowings, bank borrowings 29%, deposits 20%, and external
commercial borrowings 4%. Deposits grew 21% YoY to ₹66,131 crore
(US$7.7 billion)

1987 - Bajaj Auto Finance was incorporated on 25th March, as a Private

Limited

Company to take up Hire Purchase Finance and Lease Finance activity. It

became a deemed public company by virtue of Section 43(A) of the Act
with effect from 20th October 1987 and the word private was deleted by
the Registrar of Companies, Maharashtra, Mumbai.
The company is primarily engaged in the Hire Purchase Financing of
Two, Three Wheelers, Leasing of equipments and vehicles and Bill
Discounting. The company is also engaged in Real Estate Operations as
Project Management Consultant. The Company was promoted by Bajaj
Auto Ltd and Bajaj and Auto Holdings Ltd.
1992 - The Company is proposed to enter into other areas of financing, such as Bills
Discounting. - The Company is proposed to increase the financing
activities of the Company by introduction of various schemes of
financing cars, trucks and leasing of equipment.
It is proposed to increase the share capital of the Company by public
issue of upto 50,00,000 equity shares of Rs.10/- each at a premium, to be
determined in consultation with the
concerned Authorities. - During the year under review, Company has
opened a brach office at Hyderabad for promoting Company's financing
schemes.
1993 - The Company has, for the first time, issued commercial Papers
(CPs) to the extent of Rs.80 million. The issue of Commercial Papers has
been rated as P1+ (pronounced P oneplus) by The Credit Rating and
Information Services of India Limited (CRISIL). This rating is the best
rating for CPs.
During the year under review, Company has opened its branch offices at New
Delhi,
Chennai, Bangalore and Mumbai for promoting Company's financing schemes. -
The
proposal of issue of 67,00,000 equity shares of Rs.10/- each at a premium
of upto Rs.70/- per equity share was approved by the shareholders. - It is
proposed to issue shares to the public at an appropriate time and at a
suitable premium after taking into account the Capital Market
conditions.
1994 - The Company offered 64,88,200 No. of equity shares of Rs 10
each at a premium of Rs 80 per share of which 23,13,200 shares were
offered to promoters and their associates and the balance 41,75,000
shares were offered to the Indian Public. All were accepted.
During the year under review, Company has opened its branch office at Nagpur for
promoting Company's financing schemes. - The Company is entering
into financing of other automobiles mainly through the branch network.
1995 - During the year, Company has allotted, pursuant to a Public Issue,
4,15,000 No. of Equity Shares of Rs.10 each for cash at a premium of Rs.
80 per Equity Share. After
allotment of shares ,Company's paid up share capital is Rs. 164,884,500 as at
31.3.95.
- After allotment of shares against Public Issue on 28th May, 1994,
Company has ceased to be a subsidiary Company of Bajaj Auto
Limited. - The Company has opened its branch
offices at Vijaywada, Nasik, Vishakhapattanam, Calcutta, Goa, Madurai
and Pune for promoting Company's financing schemes
1996 - The Company has obtained a credit rating of FAA+ from CRISIL for its
Fixed
During the year, Company has opened its branch offices at Baroda and
Trivandrum for promoting Company's financing schemes. The Company
has a network of 15 branches.
1997 - Bajaj Auto Finance plans to double its borrowing capacity
from Rs 100 crore to Rs 200 crore. - The Credit Rating and
Information Services of India Ltd (Crisil) has assigned P1+ ratings to
the debt programmes of Wipro and Bajaj Auto Finance Ltd.
Crisil has also reaffirmed the FAAA rating assigned to the fixed deposits
(FD) programme of Bajaj Auto Finance and the FA+ rating assigned to
the FD programme of Vysya Bank Housing Finance Ltd.
1998 - Bajaj Auto Finance Ltd (BAFL), has entered into a tie-up with
Godrej GE Appliances, Korean consumer durables conglomerate LG and
air-conditioning major Blue Star to finance their consumer durables.
Bajaj Auto Finance Ltd has come out with a scheme a low downpayment plan to
aggressively push sales of its parent company. The low downpayment
scheme is being launched by BAFL, along with its earlier 9 per cent
interest finance scheme.
1999 - Bajaj Auto Finance has gone in for demateralisation of its share and joined
the
National Securities Depository Ltd. - BAFL's tie-up with BPL to finance
all its consumer durables except refrigerators is aimed at synergising its
existing business and adding value for its customers.

Timeline of Bajaj Finance’s History

 Establishment and Early Years (1987 - 2000)
 1987: Incorporated as Bajaj Auto Finance Limited on March 25, primarily
to provide financing for two-wheelers and three-wheelers manufactured by
Bajaj Auto.
 1994: The company launched its Initial Public Offering (IPO) and got listed
on the Bombay Stock Exchange (BSE) and National Stock Exchange
(NSE).
 1998: Expanded into consumer durables financing by partnering with major
brands like Godrej GE, LG, and Blue Star.
 2006: Assets under management (AUM) crossed ₹1,000 crore.

2010: The company was renamed Bajaj Finance Limited to reflect

its diversified financial services portfolioBAFL has regional tie ups
with Daewoo's in Punjab, Voltas in Andhra Pradesh, Sharp in
Maharashtra and Carrier Aircon in Gujarat, some of which
could be upgraded to national tie ups.
2000 - The Credit Rating Information Services of India
Ltd (Crisil) on March 6 reaffirmed the EAAA rating for
the fixed deposit programme of Bajaj Auto Finance Ltd
(BAFL).
The company's Rs 10-crore commercial paper programme has been
assigned P1+ rating.
2002-Bajaj Auto Finance Ltd has informed that the Board
has decided to reappoint Mr Dipak Poddar as Managing
Director of the Company, for a further period of five years.
2003 -Approves to voluntarily delist the Equity Shares
from Pune Stock Exchange Ltd & The Stock Exchange
Ahmedabad, in accordance with the provisions of SEBI
(Delisting Securities)-
Guidelines 2003 2004 --Ties up with Bajaj Auto Finance
for finance scheme on Intel Pentium 4 PC. -Bajaj
Finance Ltd Issues Rights in the Ratio of 6:10
2008 - Bajaj Auto has increased the stakes in the
extremely competitive 125 cc bike segment by offering its
vehicles at extremely low financing rates. - Bajaj Auto
Finance Ltd has informed that the Board of Directors of
the Company at its meeting held on October 22, 2008,
have appointed Shri. D J Balaji Rao as an additional
Director of the Company.
2009 -Bajaj Auto Finance Ltd. - Board recommends Dividend of Rs.
2/- per share (20%)
2010 -Bajaj Auto Finance Ltd. - Board recommends
Dividend of Rs. 6/- per share (60%) - Company has
changed its name from Bajaj Auto Finance Ltd to BAJAJ
FINANCE LTD
2011 -Bajaj Auto Finance Ltd. - Board recommended
Dividend of Rs. 10 per share (100%) 2012 Bajaj Finance
Ltd - Board recommended Dividend of Rs. 12/-2013 -
Bajaj Finance Ltd Issues Rights in the Ratio of 3:19 2014

-Bajaj Finance acquires Bajaj Financial Solutions for worth Rs 17cr.

2015 -Bajaj Finance
subsidiary gets license to commence housing finance
business from National Housing Bank (NHB)
2016 -Bajaj Finserv introduces the smarter way to pay, Enables EMI
payments on retail
fashion, travel and small appliances -Bajaj Finance Ltd has
approved Issue of one fully paid bonus equity share of the
face value of Rs. 2 each for one equity share of the face
value of Rs. 2 each
2017 - Bajaj Finance enters into SSA with MobiKwik
2018 -Bajaj Finance Ltd was chosen as the winner of the
MINT Corporate Strategy Awards in 2018 in the
'Shaping' Category.
2019 -Bajaj Finance launches 5 digitally-enabled FD
service brancating a diversified financial services market
place for consumers.

Bajaj Finance Limited (BFL) is a non-banking financial

company (NBFC) based in India and a subsidiary of
Bajaj Finserv Ltd. It is one of the leading NBFCs in
India, offering a wide range of financial services,
including consumer lending, SME (small and medium
enterprises) lending, commercial lending, rural lending,
and wealth management.
Incorporated as Bajaj Auto Finance Limited on March
25, primarily to provide financing for two-wheelers and
three-wheelers manufactured by Bajaj Auto.
The company launched its Initial Public Offering (IPO)
and got listed on the Bombay Stock Exchange (BSE)
and National Stock Exchange (NSE).
Expanded into consumer durables financing by
partnering with major brands like Godrej GE, LG, and
Blue Star.

Diversification and Growth (2001 - 2010)

 Assets under management (AUM) crossed ₹1,000 crore.
The company was renamed Bajaj Finance Limited to
reflect its diversified financial services portfolio.
Expanded into business and property loans, personal
loans, and rural lending.

1. Digital Transformation and Market Expansion (2011

- 2020)

 2014: Adopted data analytics and big data for financial decision-
making.
 2015: Bajaj Housing Finance Ltd. was launched as a subsidiary for
home loan and real estate financing.

Bajaj Finance Today

 One of the largest NBFCs in India.

 Operates in consumer, SME, and commercial lending.
 Holds the highest domestic credit rating (AAA/Stable).
 Expanding into digital banking and fintech solutions.

Bajaj Finance has transformed from a vehicle loan provider to a diversified

financial powerhouse, shaping India's NBFC sector.

1.4 Introduction to Loans

A loan is a form of debt incurred by an individual
or other entity. The lender— usually a corporation,
financial institution, or government—advances a
sum of money to the borrower. In return, the
borrower agrees to a certain set of terms including
any finance charges, interest, repayment date, and
other conditions.

In some cases, the lender may require

collateral to secure the loan and ensure
repayment. Loans may also take the form of
bonds and certificates of deposit (CDs). It is
also possible to take a loan from a 401(k)
account.

The Loan Process

Here's how the loan process works: When someone needs
money, they apply for a loan from a bank, corporation,
government, or other entity. The borrower may be
 required to provide specific details such as the reason for
the loan, their financial history, Social Security number
(SSN), and other information. The lender reviews this
information as well as a person's debt-to-income (DTI)
ratio to determine if the loan can be paid back.

Based on the applicant's creditworthiness, the lender

either denies or approves the application. The lender
must provide a reason should the loan application be
denied. If the application is approved, both parties sign a
contract that outlines the details of the agreement. The
lender advances the proceeds of the loan, after which the
borrower must repay the amount including any additional
charges, such as interest.

The terms of a loan are agreed to by each party before any

money or property changes hands or is disbursed. If the
lender requires collateral, the lender outlines this in the
loan documents. Most loans also have provisions
regarding the maximum amount of interest, in addition to
other covenants, such as the length of time before
repayment is required.
Imagine you want to buy something expensive, like a
house, a car, or start a business, but you don’t have
enough money to pay for it right now. In such a situation,
a bank or a financial company can lend you the money to
help you make the purchase.
This borrowed money is called a loan. You promise to
pay it back over time, usually with some extra amount
called interest (which is the cost of borrowing money).
How Does a Loan Work?
Step 1: You Apply for a Loan

You go to a bank or a financial company and ask them to give you money
for your need (house, car, business, etc.). The lender (bank) will ask you for
some details, such as:
How much money do you need?
Why do you need it?
How will you pay it back?
Do you have a stable income/job?
Do you have anything valuable (like property or gold) that you can give
as security?

Step 2: The Lender Checks Your Information

The bank or lender will check your financial history to see if you are a
trustworthy person who can repay the loan. They look at:
Your credit score (past payment history)
Your salary or income
Your existing debts (if any)

If they are satisfied, they approve your loan. If not, they may reject it or give
you a smaller amount.

Step 3: You Receive the Loan Money

Once approved, the bank transfers the loan amount to your bank account.
You can now use it for your specific purpose.

Step 4: You Repay the Loan in Installments

You don’t have to pay back the full amount immediately. Instead, you pay it
in small parts every month (called EMIs - Equated Monthly Installments).

Each EMI includes:

A part of the original loan amount
A part of the interest (the extra amount the lender charges for giving you the
loan)

Example of a Loan

Let’s say you want to buy a bike that costs ₹1,00,000, but you only have
₹20,000. You take a loan of ₹80,000 from the bank.

The bank tells you:

You must repay the loan in 24 months (2 years)
You will pay ₹3,700 per month as EMI (including interest)

So, every month, you pay ₹3,700 until the full ₹80,000 + interest is paid
back.
Why Are Loans Used?
Loans are advanced for a number of reasons, including major purchases,
investing, renovations, debt consolidation, and business ventures. Loans
also help existing companies expand their operations. Loans allow for
growth in the overall money supply in an economy and open up
competition by lending to new businesses.

The interest and fees from loans are a primary source of revenue for
many banks as well as some retailers through the use of credit facilities
and credit cards.

Components of a Loan
There are several important terms that determine the size of a loan and
how quickly the borrower can pay it back:

Principal: This is the original amount of money that is being borrowed.

Loan Term: The amount of time that the borrower has to repay the loan.

Interest Rate: The rate at which the amount of money owed increases,
usually expressed in terms of an annual percentage rate (APR).

Loan Payments: The amount of money that must be paid every month
or week in order to satisfy the terms of the loan. Based on the
principal, loan term, and interest rate, this can be determined from an
amortization table.

In addition, the lender may also tack on additional fees, such

as an origination fee, servicing fee, or late payment fees. For
larger loans, they may also require collateral, such as real
estate or a vehicle. If the borrower defaults on the loan, these
assets may be seized to pay off the remaining debt.

1.5 Types of Loans

I. Secured loans:-
These are loans that do require collateral, i.e., you have to provide an
asset to the lender as security for the money you are borrowing. That
way, if you are unable to repay the loan, the lender still has some means
to get back their money. The rate of interest of secured loans tends to be
lower as compared to those for loans without collateral.
Types of
secured
loans :-
Home loan
Home loans are a secured mode of finance, that give you the funds to
buy or build the home of your choice. The following are the type of
home loans available in India:
Land purchase loan: Purchase land for
your new home Home construction
loan: Build a new home
Home loan balance transfer: Transfer the balance of your existing home
loan at a lower interest rate
Top up loan: Can be used to renovate an existing home or have the latest interiors
for your
new home Note that while buying a new property/home, the lender
requires you make a down payment of at least 10-20% of the property’s
value. The rest is financed. The loan amount disbursed depends on your
income, its stability and current liabilities among others.

Loan against property (LAP)

Loan against property is one of the most common forms of a secured loan where
you can
pledge any residential, commercial or industrial property for availing the
funds required. The loan amount disbursed is equivalent to a certain
percentage of the property’s value and varies across lenders. While some
lenders may offer an amount equivalent to 50-60% of the
property’s value, others may offer an amount close to 80%. A loan against property
helps you the The borrower agrees to repay the principal amount along with interest
over a predetermined period. Loans can be secured (requiring collateral) or
unsecured (based on creditworthiness).
unlock the dormant value of your asset and can be used to satiate personal life goals
such as higher education of children or marriage. Businesses use a loan against
property for business expansion, R&D and product development among others.

Loans against insurance policies

Yes, you can also avail loans against your insurance policy. However,
note that all insurance policies don’t qualify for this. Only policies, such
as endowment and money-back policies, which have a maturity value can
be used to avail loans. Thus, you can’t avail a loan against a term
insurance plan as it doesn’t have any maturity benefits. Also, loans can’t
be availed
against unit-linked plans as the returns aren’t fixed and depends on the
 performance of the market. It’s essential to note that you can opt for a
loan against endowment and money back policies only after they’ve
acquired a surrender value. These policies acquire a surrender
value only after paying regular premiums continuously for 3 years.

Gold loans
For the longest time, gold has been one of the most favored asset classes. The
organized
Indian gold loan industry is expected to touch Rs.3,101 billion by 2019-
20, according to a KPMG report, thanks to flexible interest rates offered
by financial institutions
A gold loan requires you to pledge gold jeweler or coins as collateral. The loan
amount
sanctioned is a certain percentage of the gold’s value pledged. Gold loans are
generally used for short-term needs and have a short repayment tenor compared to
home loans and loan against property.

How Does a Gold Loan Work?

The process of getting a gold loan is simple and quick. Here’s how it works:

Step 1: You Pledge Your Gold

 You take your gold jewelry, coins, or ornaments to a bank or NBFC (Non-Banking
Financial Company) that offers gold loans.
 The lender checks the purity and weight of the gold to determine its value.

Step 2: Loan Amount Calculation

 The lender calculates the loan amount based on the gold's value.
 Banks usually offer 75% of the gold’s market value as a loan (as per RBI guidelines).
 Example: If your gold is worth ₹1,00,000, you may get a loan of ₹75,000.

Step 3: Loan Disbursement

 Once the paperwork is completed, the loan amount is given to you (cash or bank transfer).
 The lender keeps your gold as collateral (security) until the loan is fully repaid.

Step 4: Repayment
 You repay the loan in EMIs (Equated Monthly Installments) or as a lump sum before the
loan period ends.
 After full repayment, the lender returns your gold.
Loans against mutual funds and shares
An ideal vehicle for long-term wealth creation, mutual funds can also be pledged as
collateral for a loan. You can pledge equity or hybrid funds to the
financial institution for availing a loan. For doing so, you need to write to
your financier and execute a loan
agreement. Your financier then will write to the mutual fund registrar and
a lien on the certain number of units to be pledged is marked. Typically,
you can get 60-70% of the value of units pledged as a loan. Similarly,
with shares, financial institutions create a lien against shares
against which the loan is taken and the loan value is equivalent to a
percentage of the value of the shares.

Loans against fixed deposits

The humble fixed deposit not only offers assured returns but can also
come handy when you need a loan. The amount of loan can vary between
70-90% of the FD’s value and varies across lenders. However, it’s
essential to note that the loan tenor can’t be more than the FD’s tenor. II.
Unsecured loans These are loans that do not require collateral. The
lender lends you the money based on past associations, and your credit
score and history. Thus, you have to have a good credit history to avail
these loans. Unsecured loans usually come at a higher rate of interest due
to the lack of collateral

Type of unsecured Loans :-

Personal loan
Offering an instant flush of liquidity, a personal loan is one of the most popular
types of
unsecured loans. However, since a personal loan is an unsecured mode of
finance, the interest rates are higher compared to secured loans. A good
credit score along with high and stable
income ensures you can avail this loan at a competitive rate of interest.
Personal loans can be used for the following purposes-
- Manage all expenses of a family wedding - Pay for a vacation or an international
trip
- Finance your home renovation project - Fund the cost of your
child’s higher education Consolidate all your debts into a single
loan
Meet unexpected/ unplanned/ urgent expenses

[Link]-term business loans

 Another type of unsecured loans, a short-term business loan can be used
to meet their expansion and daily expenses by various entities and
organizations.

A short-term business loan is a type of financing that provides quick

funds to businesses for their immediate needs. These loans typically
have a short repayment period (less than 3 years) and help businesses
manage cash flow, purchase inventory, pay employees, or cover
unexpected expenses.

Unlike long-term loans (which are used for big investments like buying
property or expanding business operations), short-term business loans
help businesses manage day-to-day expenses and short-term growth
needs.

Working capital loans

Machinery loans
Equipment finance
Small business loans
Loans for women
Entrepreneurs
Loans for traders
Loans for manufacturers
Loans for service enterprises
Types of Short-Term Business Loans
There are different types of short-term business loans based on the lender and
business needs:
1️ Working Capital Loans

 Helps businesses cover day-to-day expenses like rent, salaries, and utilities.
 Usually unsecured, meaning no collateral is required.

2️ Invoice Financing (Bill Discounting)

 Businesses can borrow money against unpaid customer invoices.
 When the customer pays the invoice, the loan is repaid automatically.
 Ideal for businesses that have slow-paying clients.

3 Merchant Cash Advance

 The lender gives a lump sum loan, and repayment happens through a percentage of daily
sales.
 Suitable for businesses with high daily transactions, such as retail shops and restaurants.
 4️ Business Line of Credit
 Works like a credit card: the business gets a pre-approved loan limit and can borrow as
needed.
 Interest is charged only on the amount used.
 Helps manage fluctuating cash flow needs.

5️ Short-Term Equipment Loan

 Used to purchase new equipment, machinery, or tools.
 The equipment itself may act as collateral for the loan.

Advantages of Short-Term Business Loans

Quick Access to Funds – Loan approval and disbursement happen within hours or days.
No Long-Term Debt Burden – Businesses can repay the loan within months, avoiding long-term
financial stress.
Flexible Loan Amounts – Businesses can borrow as per their needs, from small to large amounts.
Easier Approval Process – Less paperwork and lower eligibility requirements than long-term
loans.
Unsecured Loan Options – Many short-term loans do not require collateral.

Disadvantages of Short-Term Business Loans

Higher Interest Rates – Since the repayment period is short, interest rates can be higher than long-
term loans.
Frequent Repayments – Some loans require daily or weekly payments, which can impact cash
flow.
Risk of Over-Borrowing – Businesses might take loans frequently and struggle to repay.
Penalties for Late Payments – Missing payments can result in high penalties and lower credit
scores.

Example of a Short-Term Business Loan

🔹 Ravi owns a small bakery and needs ₹5 lakh to buy ingredients and hire staff for a festival season.
🔹 He applies for a short-term loan and gets the money within 2 days.
🔹 The loan term is 12 months with 15% interest per year.
🔹 He repays the loan in monthly EMIs of ₹48,000.
🔹 After 12 months, the loan is fully repaid, and his business earns good profits during the festival.
Flexi Loans
A facility whereby you can avail funds from your approved limit and as
when required and pay interest only on the amount used. You can
withdraw on your loan limit, any number of
times and prepay when you have extra cash, at no extra cost. Such a
unique facility gives you the freedom to be in full control of your
finances unlike rigid term loans and offers you
savings on your emis by up to 45%. Here, you also have the option to
pay only interest as emis, with the principal payable at the end of the
tenor.

Education loans
Aspiration for higher education from reputed institutions have bolstered the demand
for
education loans in the country. This loan covers the basic fees of the course along
with allied
expenses such as the accommodation, exam fee, etc. In this loan, the
student is the main borrower while parents, siblings and spouse are co-
applicants.

An education loan can be taken for a full-time, part-time or vocational

course along with graduation and post-graduation course in the fields of
management, engineering and
medicine, among others. The loan must repaid by the student once the course is
complete. A unique feature of an education loan is the moratorium period, wherein
the student has the option of not paying the emis until after 12 months of completing
the course or 6 months after he/she starts working, whichever is earlier.
Vehicle loans
A vehicle loan is extended in the form of a two or four-wheeler loan
which helps you to buy your dream vehicle. Vehicle loans are offered
either on purchase of a new vehicle or a used one. Your credit score, ratio
of debt to income, loan tenor, etc., play a crucial role in
determining the loan amount.
With Bajaj Finserv you can get pre-approved offers on all the above-
mentioned loans and there are no queues, forms or details needed. Here,
your loan offer is already approved, so you can avail instant financing.
A vehicle loan (also called an auto loan) is a type of secured loan that
helps individuals buy a new or used car, bike, truck, or any other vehicle.
The loan is provided by banks, NBFCs (Non-Banking Financial
Companies), and online lenders, where the vehicle itself acts as collateral
(security).
If the borrower fails to repay the loan, the lender has the right to
repossess the vehicle and sell it to recover the remaining amount.
 1.6 What is Home Loan
A Home Loan is a securecd loan that is obtained to purachase a
property by offering it as collateral. Home loans offer high-value
funding at economical interest rates and for long tentures . They are
repaid through EMIs .After repayment the propertys title is
transferred back to the borrowe.

Buying a house is one of the biggest dreams come true for most people
and an extravagant affair altogether. Imparting life to such a dream
requires a lot of effort from the buyers’ end and the best one can do to
accommodate the home in their budget is through a home loan.
A home loan can be opted to buy a new house/flat or a plot of land
where you construct the house, and even for renovation, extension, and
repairs to an existing house.

This is the most common type of home loan availed to purchase a house. There are
many
housing finance companies, public banks, and private banks that offer
housing loans where you borrow money to purchase the house of your
choice and repay the loan in monthly
instalments.
You can get up to 80%-90% of the house’s market price in the form of
financing. The lender will hold the house until you completely repay the
loan.
[20:27, 15/01/2025] Pradnya Adhav: This is the right home loan type if
you already have a plot of land and you need financing to construct a
house in that land.

 2018: Introduced digital lending platforms and mobile applications, revolutionizing

customer experience.
 2020: Over 60% of Bajaj Finance's operations moved to cloud-based platforms.

2. Recent Developments (2021 - Present)

 2023: Entered the loan against property (LAP) segment for MSMEs.
 2024: Ended partnerships with RBL Bank and DBS Bank for co-branded credit
cards due to new RBI regulations.
 2025: AUM reached ₹354,192 crore (US$41 billion) with a customer base of 88.11
million.
A home loan is a secured loan that helps individuals purchase or construct a house,
apartment, or plot of land. The property itself acts as collateral (security) for the loan. This
means if the borrower fails to repay, the bank or financial institution has the right to take
ownership of the property.

Home loans offer high-value funding, low interest rates, and long repayment periods (up
to 30 years), making it easier for people to buy their dream homes.

How Does a Home Loan Work?

Step 1: Loan Application

 The borrower applies for a home loan at a bank or NBFC (Non-Banking Financial
Company).
 The lender checks income, credit score, employment status, and property details.

Step 2: Loan Approval & Disbursement

 If approved, the lender sanctions the loan amount based on the property’s value and
the borrower’s repayment ability.
 The bank directly pays the loan amount to the property seller or builder.

Step 3: Repayment in EMIs

 The borrower repays the loan in EMIs (Equated Monthly Installments) over 10 to
30 years.
 Each EMI includes a portion of the principal amount + interest.

Step 4: Property Ownership Transfer

 Once the borrower repays the full loan, the lender removes the mortgage on the
property, making the borrower the legal owner.

Types of Home Loans

1 Home Purchase Loan 🏡

 Used to buy a new or resale house/apartment.

 Covers up to 80-90% of the property value.

2️ Home Construction Loan 🏗️

 For people who want to build a house on their own land.

 Loan is disbursed in phases as construction progresses.

3️ Home Renovation Loan 🔧

  Used for renovation, repairs, or remodeling of an existing house.
 Can cover painting, flooring, plumbing, etc.

4️Home Extension Loan 🏠➕

 Used to add extra rooms, floors, or space to an existing house.

5️Land Purchase Loan 🌳

 Helps in buying a plot of land for future construction.

6️Home Loan Balance Transfer 🔄

 If a borrower finds lower interest rates with another bank, they can transfer their
loan to save money.

Home Loan Eligibility Criteria

✔ Age: 21 – 65 years 📆
✔ Employment: Salaried or self-employed 👨‍💼
✔ Minimum Income: ₹25,000 – ₹50,000 per month 💰
✔ Credit Score: 700+ preferred 📊
✔ Loan-to-Value (LTV) Ratio: Up to 90% of property value 🏠
✔ Work Experience: 2 years (salaried), 3 years (self-employed) 🏢

Documents Required for a Home Loan

Identity Proof – Aadhaar Card, PAN Card, Passport
Address Proof – Utility Bill, Driving License
Income Proof – Salary Slips, ITR (Income Tax Return)
Bank Statements – Last 6 months’ transactions
Property Documents – Sale Agreement, Builder NOC, Land Title

Home Loan Interest Rates & Loan Tenure

Loan Type Interest Rate Loan Tenure
Salaried Borrower 6.5% – 9% per year Up to 30 years
Self-Employed Borrower 7% – 10% per year Up to 25 years
Home Renovation Loan 8% – 12% per year 5 – 15 years
Land Purchase Loan 8% – 11% per year Up to 20 years

🏦 Tip: Women borrowers often get a 0.05% discount on interest rates!

 How to Calculate Home Loan EMI?
EMI (Equated Monthly Installment) is calculated using this formula:

EMI=P×r×(1+r)n(1+r)n−1EMI = \frac{P \times r \times (1 + r)^n}{(1 + r)^n - 1}

Where:
📌 P = Loan Amount
📌 r = Monthly Interest Rate (Annual Rate / 12)
📌 n = Number of months (Loan Tenure)

✅ Example: If you take a ₹30 lakh loan at 7% interest for 20 years, your EMI will be
₹23,259 per month.

(Use online EMI calculators for quick estimates!)

Advantages of a Home Loan

✅ Affordable Home Ownership – Buy a house without waiting for years to save money.
✅ Lower Interest Rates – Home loans have cheaper interest rates than personal loans.
✅ Long Repayment Period – You can repay over 10 to 30 years, making EMIs affordable.
✅ Tax Benefits – Get tax deductions under Section 80C & 24(b) of the Income Tax Act.
✅ Home Loan Balance Transfer – Shift your loan to another bank for better interest rates.

Things to Consider Before Taking a Home Loan

⚠ Compare Interest Rates – Different banks offer different rates, so choose wisely.
⚠ Check Loan-to-Value (LTV) Ratio – Banks lend 80-90% of the property cost, so you
must arrange the rest.
⚠ Processing & Hidden Charges – Some banks charge processing fees (0.5-2%).
⚠ Fixed vs. Floating Interest Rate – Fixed stays the same; floating changes with market
rates.
⚠ Prepayment Penalty – Some lenders charge a fee if you repay early.

Example of a Home Loan

🔹 Raj wants to buy a flat worth ₹50 lakh.
🔹 He applies for a home loan of ₹40 lakh (80% of property cost).
🔹 The bank approves the loan at 7% interest for 25 years.
Loan Interest Rates Home
The average home loan interest rates are from 6.5% to 12.00% in India as
of March 2021. The rates usually vary from lender to lender, RBI-
prescribed repo rate, inflation, economic activities, and many other
factors.
Some banks also give a special privilege to women, bank staff, and senior
citizens by providing a 0.05% concession on the home loan interest rate.
Further, a home loan interest rate can either be fixed or floating in
nature. A fixed-rate home loan remains the same for a period specified
by the bank. This type of home loan is immune to market fluctuations.
In the case of floating-rate home loans, the interest rate applicable varies based on
the market fluctuations. It may or may not be beneficial for the borrower.
As the name suggests, a home loan is the amount of money an individual
borrow from banks or other financial institutions after meeting certain
loan eligibility criteria to purchase a
residential or commercial property. The money borrowed has to be paid back to the
lender .

Advantages and Disadvantages of Loans

Loan is a form of debt, often with interest. There are several reasons
why people apply for loans. Usually they borrow money to purchase a
house, buy a car, or start a business. Often, applying for a loan is
necessary because most do not have available financial resources they
need to make a [Link] forms of loans, like the student loans have
helped a lot of students get through school. Thosewho use student loan
debt consolidation clearly have multiple student loans. They do this to
manage their obligations better. Since loan is borrowed, the lender
expects to receive payment with the interest specified. In addition,
borrowers should make the payments at the specified due date for a
certain period. This is where most people have problems. Most problems
start when people cannot make the
monthly payments required due to different circumstance.
The many other debts they have. Some encounter additional problems
such as medical emergencies and job loss. Since getting a loan is a
commitment, you have to be very careful with your decisions. Choose
the right lender. There is more to picking a lender than just
looking for one with the least interest. Keep in mind that those with low
interest require longer period. Remember, when choosing a lender,
check its stability, its flexibility,
repayment schemes, and interest rates. Before you decide to get a loan,
it is only right that you review its advantages and disadvantages.

Advantages:-
 Below are the advantages of getting a loan. These are also the reasons
why many apply for it:

There is a loan for just about anything. If you are in need of money to
purchase a house, you can apply for a housing loan. If you need a car,
you can apply for a car loan. With all the loans available, you will be
able to purchase everything you need.
It helps a person afford an expensive purchase. All of us wish to acquire a
property. However, we do not have the amount of money to make the
purchase. Loans allow us to do this. They lend us the money so that we
can finally afford our desired property.
Payment is staggered, which makes it affordable. This enables the person
to pay off the loan gradually. If a person has chosen a good deal, he
should be able to finish paying off the loan in the time specified.
One gets the funding he needs. If a person wants to start a business, he can do so by
applying for a business loan. He does not have to wait for his savings to
build up before he can start his own business. They can also use the
amount they loan for investment purposes.
Getting a loan is very helpful to start building your dream. However, you
have to be very careful with your decisions. This is because of the problems
you will possibly encounter if you mismanage your loans and other debts. If
you have multiple loans, make sure to manage it well. Use a debt
consolidation loan calculator and check if it is better to consolidate all your
loans
Often, applying for a loan is necessary because most do not have available
financial resources they need to make a [Link] forms of loans, like
the student loans have helped a lot of students get through school. Thosewho
use student loan debt consolidation

Types of Home Loans

1️Home Purchase Loan 🏡
 Used to buy a new or resale house/apartment.
 Covers up to 80-90% of the property value.

2️Home Construction Loan 🏗️

 For people who want to build a house on their own land.
 Loan is disbursed in phases as construction progresses.

3️Home Renovation Loan 🔧

 Used for renovation, repairs, or remodeling of an existing house.
 Can cover painting, flooring, plumbing, etc.
 4️Home Extension Loan 🏠➕
 Used to add extra rooms, floors, or space to an existing house.

5️Land Purchase Loan 🌳

 Helps in buying a plot of land for future construction.

6️Home Loan Balance Transfer 🔄

 If a borrower finds lower interest rates with another bank, they can transfer their loan to
save money.

Disadvantages:-
Here are some of the disadvantages of having loans:
Is a long-term debt. This means that you have to deal with it for a
specified period, which means that you have to commit yourself to
making monthly payments specified in your
agreement for the period indicated to repay the loans.
If you miss payments, you will face serious consequences. You can face foreclosure
or
repossession of the property. In addition, you could also face penalties
and legal issues. It will alsoreflect in your credit rating, which can lead to
a low credit scores.
You may not be able to make early loan repayment. Few lenders give option for
early
repayment. Although there are some who will allow you to do this, they
will charge you with early repayment fees.
Loans are very helpful. However, you have to manage them well because
you can get into a lot of trouble if you fail to make the expected
payments.

Advantages and disadvantages of Cash Advances :-

At some time or another you will have to use some sort of cash advance
system, especially if you don’t have any credit cards or know someone
you can borrow money from. While it may be alright to use cash
advances every so often, becoming dependant on them to help you pay
bills every month is not. Cash advances can be extremely expensive
because you are charged a fee in addition to the money youare
borrowing. Overtime, these monthly fees could be used to make a down
payment on a house or [Link] is why it is important to learn the proper
ways to use this type of loan service and to educate you about the
advantages and disadvantages of cash advances
If you don’t have sufficient funds in your checking account, you will
have to pay the fee associated with insufficient funds put into effect by
your financial institution when your check bounces.
As you can see there are many advantages and disadvantages of cash
advances. To find out if a cash advance is the right solution for your
current financial situation, you should first
weigh the pros and cons before you sign on the dotted line. While cash
advances may be one of the easiest ways to obtain cash when you have
bad credit or no credit history, they should be used sparingly and with
caution. Make sure to read all the rules and stipulations associated with
the cash advance loan before making an agreement to pay it back. By
following these cash advance tips, you will know when you should use
this type of loan and when you should consider other available options.

Utility of Loans and Advances :-

Loans and advances granted by banks and other financial institutions are
highly beneficial to individuals, firms, companies and industrial
concerns. The growth and diversification of
business activities are effected to a large extent through bank financing.
Loans and advances granted by banks help in meeting short-term and
long term financial needs of business enterprises. We can discuss the role
played by banks in the business world by way of loans and advances as
follows:-
Loans and advances can be arranged from banks in keeping with the
flexibility in business operations. Traders may borrow money for day to
day financial needs availing of the facility of cash credit, bank overdraft
and discounting of bills. The amount raised as loan may be
repaid within a short period to suit the convenience of the borrower.
Thus business may be run efficientlywith borrowed funds from banks
for financing its working capital
requirements.
Loans and advances are utilized for making payment of current liabilities,
wage and salaries of employees, and also the tax liability of business.
Loans and advances from banks are found to be ‘economical’ for traders and
businessmen,because banks charge a reasonable rate of interest on such
loans/advances. For loans from money lenders, the rate of interest
charged is very high. The interest charged by commercial banks is
regulated by the Reserve Bank of India.
Banks generally do not interfere with the use, management and control
of the borrowed money. But it takes care to ensure that the money lent is
used only for business purposes.
Bank loans and advances are found to be convenient as far as its repayment
Loans and advances are essential financial tools that help individuals, businesses,
 and the economy grow and function smoothly. They provide the necessary capital
for various

1️Utility of Loans for Individuals

Loans help individuals achieve personal financial goals that may otherwise be difficult due
to a lack of immediate funds.

🔹 Home Ownership 🏡

 Home loans allow people to buy a house without paying the full cost upfront.
 Offers affordable EMIs and long repayment tenures (up to 30 years).

🔹 Vehicle Purchase 🚗🏍️

 Vehicle loans help individuals buy cars, bikes, and commercial vehicles.
 Easier to afford expensive vehicles through monthly EMIs.

🔹 Higher Education 🎓

 Education loans support students in paying college tuition fees.

 Moratorium period (no EMI until course completion) makes it easier to repay.

🔹 Medical Emergencies 🏥

 Personal loans or medical loans provide quick financial help for hospital bills,
surgeries, and treatments.

🔹 Debt Consolidation 💳

 Helps individuals pay off multiple debts by merging them into one loan with a lower
interest rate.

2️Utility of Loans for Businesses

Businesses need money to grow and expand. Loans and advances help them manage
operations, invest in infrastructure, and improve cash flow.

🔹 Working Capital Needs 💼

 Short-term business loans and advances help businesses meet daily expenses, such
as rent, salaries, and inventory purchases.

🔹 Business Expansion 🏗️
  Term loans provide long-term funding for setting up new factories, stores, or
offices.
 Businesses can buy machinery, raw materials, and invest in new technology.

🔹 Seasonal Demands & Inventory Management 📦

 Cash credit and overdraft facilities help businesses buy stock before peak seasons.
 Example: A clothing retailer takes a short-term loan before the festive season to
stock inventory.

🔹 Startup Growth & Entrepreneurship 🚀

 MSME (Micro, Small & Medium Enterprise) loans help startups and small
businesses with initial funding.
 Government schemes like MUDRA loans support new businesses.

🔹 Export & Trade Finance 🚢

 Bill discounting and letter of credit loans help exporters receive payments before
international transactions are completed.

3️ Utility of Advances for Businesses

While loans are long-term financial tools, advances are short-term credit facilities that
businesses use for immediate operational needs.

🔹 Overdraft Facility 💳

 Businesses can withdraw more than their account balance to manage short-term
cash flow issues.

🔹 Cash Credit 💵

 Helps businesses buy raw materials and maintain stock without waiting for
customer payments.

🔹 Bill Discounting 📜

 Businesses can get advance money against invoices before customers make
payments.

4️ Utility of Loans & Advances for the Economy

Loans and advances play a major role in economic growth and financial stability.

🔹 Boosts Economic Growth 📈

  Loans encourage spending and investment, which helps industries grow.
 More businesses = More jobs = More income = Stronger economy.

🔹 Encourages Savings & Investments 💰

 Banks provide loans using customers' savings, helping money circulate in the
economy.
 People invest in real estate, businesses, and education, improving financial security.

🔹 Supports Government & Infrastructure Projects 🏗️

 Governments take infrastructure loans to build roads, bridges, schools, and

hospitals.
 Better infrastructure attracts foreign investment and improves national
development.

🔹 Increases Financial Inclusion 🏦

 Loans help people in rural areas and small businesses access formal banking
services.
 Special loan schemes like agriculture loans help farmers grow their businesses.

5️ Key Differences Between Loans & Advances

Feature Loans Advances
Purpose Long-term investment (House, Business Expansion) Short-term operational needs
Duration 1 year – 30 years Usually less than 1 year
Repayment Paid in monthly EMIs Paid in business transactions
May be unsecured (Overdraft, Cash
Security Often requires collateral
Credit)
Overdraft, Cash Credit, Bill
Example Home Loan, Car Loan, Business Loan
Discounting

6️ Things to Consider Before Taking a Loan or

Advance
⚠ Interest Rates – Compare rates from different lenders to get the lowest possible rate.
⚠ Loan Tenure – Choose a tenure that makes EMIs affordable while minimizing total
interest paid.
⚠ Hidden Charges – Some loans have processing fees, late payment penalties, and
prepayment charges.
⚠ Credit Score – A high credit score (700+) gives you better loan offers.
⚠ Collateral Requirement – Some loans require property, gold, or other assets as
security.

7️ Example of a Loan & Advance Usage

 🔹 Example 1: Home Loan

📌 Amit wants to buy a ₹50 lakh apartment.

📌 He applies for a home loan of ₹40 lakh (80% of the price).
📌 The bank approves the loan with 7% interest for 20 years.
📌 His monthly EMI = ₹31,000.

✅ Amit moves into his new home and repays the loan over time.

🔹 Example 2: Business Working Capital Loan

📌 Ravi owns a clothing shop and needs ₹10 lakh for inventory before Diwali.
📌 He applies for a short-term business loan.
📌 The lender approves ₹10 lakh at 12% interest for 1 year.
📌 His monthly EMI = ₹89,000.

✅ Ravi makes high sales during Diwali and repays the loan on time.

🔹 Example 3: Overdraft Facility (Advance)

📌 Sneha runs a small bakery and needs ₹2 lakh to buy baking supplies.
📌 She uses an overdraft facility from her bank, withdrawing ₹2 lakh beyond her account
balance.
📌 She repays the amount after selling her bakery products.

✅ Sneha maintains her cash flow and keeps her business running.

Loans and advances help individuals, businesses, and the economy thrive. They provide
financial support for major purchases, investments, and operational expenses.

 Loans are best for long-term needs like buying a house, starting a business, or
funding education.
 Advances are best for short-term needs like daily expenses, cash flow management,
or inventory purchases.

If used wisely, loans and advances can improve financial stability and support economic
growth!
 Chapter -2

Industry profile and company

profile

[Link] Title [Link]

2.1 Documents required for home loans 1-4

2.2 Terms and conditions for Home Loans 5-11

2.3 Industry Overview 12-16

2.4 The Associated Chambers of commerce and industry if

India

2.5 Swot Analysis of NBFCS

2.6 Growth in NBFC

 Documents required for the loan approval :-
2.1 Personal Loan :

One of the options to get money from reputed banks for all needs is
through personal loan. And, to apply successfully for a personal loan an
applicant needs to provide certain set of documents.
These documents helps lender (be it a Bank or a NBFC) to know and
understand the financial stability of the borrower and analyze the credit
risk. Apart from that it helps a lender know and verify all the details
about the applicant such as age, income, address, employer and
employment. It is on the basis of this a lender decides whether to lend or not to the
applicant.
As personal loans are unsecured loans, the lender does not takes anything
as collateral for the lending amount, hence there is always a potential risk
of borrower defaulting or absconding on the loan. Hence to be double
triple sure a lender asks for a certain set of documents so that it can learn
and analyse the applicant and then decide.
The documents required for personal loan help a lender to know and
understand the following about the applicant: Identity

1. Age
2. Income
3. Address
4. Existing Loans
5. Repayment History (if any)
Once a lender has these details, they can know and understand the
applicant better. And, using the information provided, they can come
up with the best loan offer for the applicant.
As such, providing the required documents while applying for a
personal loan, helps the applicant to get the best offer. Above is the
checklist of all the required documents for a personal loan

Home loan :

Here is a checklist of the documents required to apply for a home loan.

1. Passport Size Photographs
2. Identity Proof: Passport / Driving License / Voter ID / PAN Card / Aadhaar Card.
3. Address Proof: Driving License / Registered Rent Agreement /
Electricity Bill (up to 3 months old) / Passport.
4. Employment Appointment Letter: Required if the current
employment is less than 1-year old.
5. Financial Documents: Last3monthssalaryslip
 6monthbankstatement
 2 year Form 1
6. Property Documents: Sale deed, Khata, transfer of ownership.
7. Advance Processing Cheque: A cancelled cheque for validation of bank account.
8. Financial Documents:  For Salaried Individual: 3 month salary slip, Form 16 and
bank
statement  For Self-Employed Individual: IT returns for last 2 years
along with computation of income tax for past 2 years certified by a
Chartered accountant  For Self-Employed
Non- Professionals: IT returns for last 3 years along with computation of
income tax for past 2 years certified by a Chartered accountant
9. Complete Home Loan Application form duly fille

Vehicle Loan :-
Here is the checklist of the documents required to apply for a car loan:
 Proof of age
 Identification proof
 Application form
 Passport size photograph
 Proof of residence
 Income proof
 Bank statement
 Signature verification proof
 Pro-forma Invoice or Rate List
Reasonable interest rates, affordable emis, simplistic paperwork, and
quick disbursement are a few reasons why car loans have become such a
comfortable option for today’s common man. Now the dream of owning
a car is no longer far-fetched- a few documents are all you need.
Predominantly, the lender banks look for proof that you are a good credit risk and
are in a
position to repay the car loan. This information, along with your credit
report and score, will directly impact the interest rates that you are
charged.
Since your credit rating will be assessed while applying, it is worth
cleaning up any existing debts before you lodge your initial application.
This is sure to improve your chances of approval. If you havea bad credit
history, the lender bank will also want to see your credit card statements,
mortgage details and verification of other loans that you hold

Educational Loan :-
Documents required for an Educational Loan:
For students seeking a loan for studies within the country, they can
provide the following documents. Duly-filled application form

 2 passport size photographs.

 Graduation, Secondary School Certificate, or High School Certificate or mark
sheets
 KYC documents that include ID, address, and age proof.
 Signature Proof
 Income Proof of parents or guardian
 If collateral is required, documentation for Immovable property, fds, etc.
 For students interested in a loan to study abroad, they will need to
provide the documents below.
 Duly-filled application form.
 2 passport size photographs.
 KYC Documents that include ID, residence and age proof.
 A copy of statement of marks or certificates of last examination passed.
 Proof of admission to the university and the course
 Schedule of course expenses
 If you have received a scholarship, a copy of the scholarship letter is needed.
 Copy of Foreign Exchange permit if you have it.
 Bank account statement for last six months of the borrower, parents or guardian.
 Last 2 years’ Income Tax assessment of the borrower, parents or guardian.
 For loans with collateral, the details of security offered must be
furnished. You might also be required to provide an advocate’s search
and report about its marketability, mortgage
ability, etc.
 Proof of the source of margin is required.
Educational loans are a sector which is promoted as it gives students the
opportunity to study further. It enhances the growth and development of
the citizens and the country. Educational loans are an investment into the
future, so it is important to do your research and take your
time. Government and banks also offer subsidies and lower interest rates
to promote education for all.
Gold loan:-
 Two passport size photograph
 ID Proof such as Driving License / PAN Card / Form 60/61 / Passport Copy /
Voter ID Card
/ Aadhaar Card / Ration Card. Any one document needs to be submitted
 2.2Terms and conditions of Loan

Agreement

What is a Loan Agreement ?

 Few people sail through life without borrowing. With few
exceptions, almost everyone takes a loan to buy a car, finance a
home purchase, pay for a college
education or cover a medical emergency. Loans are nearly
ubiquitous and so are the agreements that guarantee their
repayment.
 Loan agreements are binding contracts between two or more
parties to formalize a loan process. There are many types of loan
agreements, ranging from simple promissory notes between
friends and family members to more detailed contracts like
mortgages, auto loans, credit card and short- or long-term payday
advance loans.
 Simple loan agreements can be little more than short letters
spelling out how long a borrower has to pay back money and
what interest might be added to the principal.
Others, like mortgages, are elaborate documents that are filed as
public records and allow lenders to repossess the borrower’s
property if the loan isn’t repaid as agreed.
 Each type of loan agreement and its conditions for repayment
are governed by both state and federal guidelines designed to
prevent illegal or excessive interest rate on
repayment.
 Loan agreements typically include covenants, value of collateral involved,
guarantees, interest rate terms and the duration over which it must
be repaid. Default terms should be clearly detailed to avoid
confusion or potential legal court action. In case of default, terms
of collection of the outstanding debt should clearly specify the
costs involved in collecting the debt. This also applies to parties
using promissory notes as well.
Purpose of a Loan Agreement :-

The main purpose of a loan contract is to define what the parties involved are
agreeing to, what responsibilities each party has and for how long
the agreement will last. A loan agreement should be in
compliance with state and federal regulations,
which will protect both lender and borrower should either side
fail to honor the agreement. Terms of the loan contract and which
state or federal laws govern the
performance obligations required by both parties, will differ
depending upon the loan type.
Most loan contracts define clearly how the proceeds will be used. There is no
distinction made in law as to the type of loan made for a new
home, a car, how to pay off new or old debt, or how binding the
terms are. The signed loan contract is proof
that the borrower and the lender have a commitment that funds
will be used for a specified purpose, how the loan will be paid
back and at what amortization
Other Reasons for Using Loan Agreements:-

 Borrowing money is a huge financial commitment, which is why

a formal process is in place to produce positive results on both
sides.
 Most of the terms and conditions are standard fare – amount of money
borrowed,
interest charged, repayment plan, collateral, late fees, penalties for
default – but there are other reasons that loan agreements are
useful.
 A loan agreement is proof that the money involved was a loan,
not a gift. That could become an issue with the IRS.
 Loan agreements are especially useful when borrowing or
loaning to a family member or friend. They prevent arguments
over terms and conditions.
 A loan agreement protects both sides if the matter goes to a
court. It allows the court to determine whether the conditions and
terms are being met.
 If the loan includes interest, one side may want to include an
amortization table, which spells out how the loan will be paid
off over time and how much interest is involved in each
payment.
 Loan agreements can spell out the exact monthly payment due
on a [Link] is safe to say that anytime you borrow or lend money,
a legal loan agreement should be part of the process.
On Demand vs. Fixed Repayment Loans :-
Loans use two sorts of repayment: on demand and fixed payment.
Demand notes are usually used for short-term borrowing and are often used
when
people borrow from friends or family members. Sometimes banks
will offer demand loans to customers with whom they have an
established relationship.
These loans typically don’t require collateral and are for small
amounts.
Their key feature is how they are repaid. Unlike longer term
loans, repayment can be required whenever the lender desires, as
long as sufficient notification is given. The notification
requirement is usually spelled out in the loan agreement. Demand
loans with friends and family member might be a Written
agreement, but it might not be
legally enforceable. Banks demand loans are legally enforceable.
A check overdraft facility is one example of a bank demand loan
– if you don’t have the money in your account to cover a check,
the bank will loan you the money and pay the check, but you are
expected to repay the bank quickly, usually with a penalty fee.
Fixed term loans are commonly used for large purchases and
lenders often demand that the item purchased, perhaps a house or
a car, serve as collateral if the borrower
defaults. Repayment is on a fixed schedule, with terms established
at the time the loan is signed. The loan has with a maturity date
when it must be fully repaid. In some
cases, the loan can be paid off early without penalty. In others,
early repayment comes with a penalty.

Legal Terms to Consider :-

All loan agreements must specify general terms that define the
legal obligations of each party. For instance, the terms regarding
repayment schedule, default or contract breach, interest rate, loan
security, as well as collateral offered must be clearly
outlined. There are some standard legal terms involved in loan
agreements that all sides should be aware of, regardless of
whether the contract is between family and friends or between
lending institutions and customers.
Entire Agreement Clause:
This term defines what the final agreement will be and supersedes any agreements
previously made in negotiations, whether written or oral. In other words,
this is the final say and anything that was said (or written) before, no
longer applies.
Interest Rate Determination :- Many borrowers in their first
experience securing a loan for a new home, automobile or credit card are
unfamiliar with loan interest rates and how they
are determined. The interest rate depends on the type of loan, the
borrower’s credit score and if the loan is secured or unsecured.
In some cases, a lender will request that the loan interest be tied to
material assets like a car title or property deed. State and federal
consumer protection laws set legal limits regarding the amount of interest
a lender can legally set without it being considered an illegal and
excessive usury amount.
If the loan includes interest payments, as most do, the terms will be
spelled out in the loan’s terms and conditions. Interest is either fixed fee
or floating fee.
A fixed fee, or fixed rate, loan establishes an interest rates that remains
unchanged during the repayment of the loans. If you borrow money with
a 4% annual rate, you will pay the lender 4% a year on the balance due
until the loan is paid off. The amount of interest you pay will
decrease over time as the balance is paid down and the principal
payment will increase. If you borrow $200,000 to buy a house, the
monthly payment will remain constant, but the portion of the payment
that goes to interest and principal will change each month as the loan is
balance is reduced. Floating fee interest rates, also called variable rate
loans, carry interest rates that change over time. The amount of interest
based on a benchmark rate, usually a
widely followed index like the LIBOR those changes regularly. Floating fee rates
are adjusted periodically and generally are only used in complex loans like
adjustable-rate home
mortgages.

Contract Length & Amortization :- The length of a loan

contract is determined by a lender’s reliance upon an amortization
schedule. Once the lender and the borrower have
determined the amount of money needed, the lender will use the amortization table
to
calculate what the monthly payment will be by dividing the number of
payments to be made and adding the interest onto the monthly payment.
Unless there are certain loan conditions that penalize the borrower for
early loan payment, it is in the best interest of the borrower to pay back
pre-paid fees and
penalties for doing so. Prepayment penalties are typically found in automobile loans
or in
mortgage subprime loans. They also can occur when borrowers choose to
refinance a home or auto loan.
Pre-payment penalties are applied to protect the lender, who expects a
certain return on his loan over a certain amount of time. For example, if
the borrower repays a 5-year loan in three years, the lender would be out
the interest he expected the last two years of the loan.
Prepayment penalties usually are 2% of the amount due on the loan or
six months of interest payments. It can have a dramatic effect on the cost
of refinancing a loan. Many sub-prime loans include prepayment
penalties, which opponents say target the poor, who usually are the ones
with subprime loans.
On the other side are homes financed through government-backed FHA loans.
Federal law
specifically forbids prepayment penalties on FHA loans. The exception is
if the borrower has amortgage that contains a due-on-sale clause and the
clause has been allowed as part of the mortgage.
Breach or Default If a loan contract is paid off late, the loan is considered
in default. The borrower can be liable for a myriad of potential legal
damages to compensate the lender for any losses suffered. The breached
or defaulted lender can pursue litigation and have a court hold the
borrower liable for legal costs, liquidated damages and even have assets
and
property attached or sold for repayment of thedebt. In addition, a breach
or default of court judgment can be placed on the borrower’s credit
record.

Mandatory Arbitration:- Mandatory arbitration is an increasingly

popular provision in loan agreements that requires parties to resolve
disputes through an arbitrator, rather than the court system.
More than 50% of lending institutions include mandatory arbitration as part of their
loan
contracts because it is supposed to be faster and cheaper than going to
court. Arbitration puts the final decision in the hands of one person, who
likely is more experienced and
sophisticated about the law than six jurors in a courtroom.
In most cases, mandatory arbitration clearly favors the lenders, who
have legal counsel that specialize in this area of law on their side. The
borrower often has no lawyer or inadequate representation because
lawyers are not guaranteed payment in arbitration cases.
The borrower is at an even bigger disadvantage if the arbitration is
 binding, meaning there can be no appeal. The rules in the Fair Credit
Reporting Act and the Truth in Lending Act have no bearing in
arbitration cases, which also favors the lender.
Members of the military are especially vulnerable to loan agreements that
include mandatory arbitration. A solider serving out of the country may
not be able to attend or have competent representation at an arbitrary
hearing and because of that, lose possession of a car or other asset. The
arbitrator’s decision can’t be appealed, so there is no recourse if the
decision goes against the soldier.
Before you sign a loan agreement, read it closely and if it includes a
mandatory arbitration clause, decide whether you are comfortable with
that as a means of settling [Link] and Predatory Protections
Several federal and state consumer protection laws protect consumers
against predatory and usury loan tactics used by lenders.
The Truth In Lending Act, Real Estate Settlement Act and the Home
Owners Protection Act federally protect borrowers against predatory
lenders. Many states enacted companion
consumer predatory and usury protection acts to protect borrowers. Both parties
benefit because lenders make reasonable interest repayment rates and borrowers
receive a much- needed loan.
Several federal and state consumer protection laws protect consumers
against predatory and usury loan tactics used by lenders

Promissory Notes :-
Promissory notes resemble loan agreements but lack complexity. Often,
they are little more than commitment-to-pay letters like ious or simple
payment on demand notes. Usually the borrower Writes a letter
specifying how much money he or she is borrowing and the terms under
which it will be repaid. They are almost always used for small loans
between people who know one another well. Promissory notes are signed
and dated and can be legally binding. Promissory notes can be secured or
unsecured. Secured loans offer the lender collateral is the loan isn’t
repaid, while unsecured loans don’t use collateral. They can contain
terms about installment payments and interest, though theymight not.
Unlike loan agreements, which can contain complex payment terms,
promissory notes are more like paper trails that document that one
person has lent money and that the borrower agrees to repay the
money within a certain amount of time, either in a lump sum or in
installments. It’s used primarily to avoid financial misunderstandings and shouldn’t
be
confused with a loan agreement, which contains an assortment of
legally enforceable terms and remedies.
2.3 INDUSTRY PROFILE &
COMPANY PROFILE NBFC IN INDIA

NBFC - INDUSTRY OVERVIEW :

A Non-Banking Financial Company (NBFC) is a company registered under
the Companies Act, 1956 engaged in the business of loans and advances,
acquisition of shares/stocks/bonds/debentures/securities issued by
Government or local authority or other marketable securities of a like nature,
leasing, hire-purchase, insurancebusiness, chit business but does not include
any institution whose principal business is that of agriculture activity,
industrial activity, purchase or sale of any goods (otherthan securities) or
providing any services and sale/purchase/construction of
immovable property. The NBFC sector is an important part of the Indian
financial sector. They have shown dynamism in delivering innovation and in
assisting financial inclusion.
Nbfcs typically have several advantages over banks due to their focus on
niche segment, expertise in the specific asset classes, and deeper penetration
in the rural and unbanked markets. However, on the flip side, they depend to
a large extent on bank borrowings, leading to high cost of borrowings and
face competition from bankswhich have lower cost of funds.
The growing asset size of the NBFC sector has increased the need for risk
management in the sector due to growing interconnectedness of
nbfcs with other financial sector intermediaries. The Reserve
Bank of India (RBI) has been in the recent past trying to
strengthen the risk management framework in the sector, simplify
the regulations and plug regulatory gaps so as to prevent
regulatory arbitrage between banks and nbfcs. The Reserve Bank
of India released the ‘Revised Regulatory Framework for nbfcs’
on November 10, 2014 which broadly focuses on strengthening
the structural profile of NBFC sector, wherein focus is more on
safeguarding of the depositors money and regulating nbfcs which
have increased their asset-size over time and gained systemic
importance.
Due to subdued economic growth, last two years, have been
challenging period for the nbfcs with moderation in rate of asset
growth, rising delinquencies resulting in higher provisioning thereby
impacting profitability. However, comfortable capitalization levels
and conservative liquidity management, continues to provide comfort
to the credit profile of nbfcs in spite of impact on profitability
system comprises of Ministry of Finance, RBI,
SEBI and other regulatory bodies. The informal financial system consists of
individual money lenders, groups of persons operating as funds or
associations, partnership firms consisting of local brokers, pawn
brokers, and non-bankingfinancial intermediaries such as finance,
investment and chit fund companies (ASSOCHAM ):-

The Associated Chambers of Commerce and Industry of India

Non-banking finance companies (nbfcs) form an integral part of the

Indian financial system. They play an important role in nation
building and financial inclusion by complementing the banking
sector in reaching out credit to the unbanked segments of society,
especially to the micro, small and medium enterprises (msmes),
which form the cradle of entrepreneurship and innovation. Nbfcs’
ground- level understanding of their customers’ profile and their
credit needs gives them an edge, as does their ability to innovate and
customize products as per their clients’ needs. This makes them the
perfect conduit for delivering credit to msmes.

However, nbfcs operate under certain regulatory constraints, which put them at a
disadvantage vis- à-vis banks. While there has been a regulatory
convergence between banks and nbfcs on the assetside, on the liability
side, nbfcs still do not enjoy a level playing field. This needs to be
addressed to help nbfcs realize their full potential and thereby perform
their duties with greater efficiency.
Moreover, with the banking system clearly constrained in terms of
expanding their lending activities, the role of nbfcs becomes even more
important now, especially when the
government hasa strong focus on promoting entrepreneurship so that
India can emerge as a country of job creators instead of being one of job
seekers. Innovation and diversification are the important contributors to
achieve the desired objectives.

IMF (International Monetary Fund) cuts India’s growth rate to 4.8%

citing slowdown in local demand, stress in NBFC sector
 8 per cent for the current fiscal year which is expected to rise to 5.8 per
cent in 2020?  The IMF attributed the slash in growth rate to the
slowdown in demand in the domestic market and stress in the nonbank
financial sector.
 “India’s growth is estimated at 4.8 percent in 2019, projected to
improve to 5.8 percent in 2020 and 6.5 percent in 2021,” said IMF in a
statement.
 The 5.8 per cent estimate in 2020 is down by 0.9 per cent from the previous
estimate.
 The steep cut in India’s growth rate has affected the IMF’s projection
on the world economy, which is now expected to expand 2.9 per cent in
2019 as compared with the previous forecast at 3.0 per cent.
 In its World Economic Outlook Report, IMF stated that the growth markdown
largely
reflects a downward revision to India’s projection, where domestic
demand has slowed more sharply than expected amid stress in nonbank
financial sector and a decline in credit growth.
 According to IMF, the global economy is expected to accelerate to 3.3
per cent in 2020 from 2.9 per cent in 2019. Further, it is expected to rise
to 3.4 per cent in 2021.
 However, the IMF has in its latest estimates trimmed the global growth
rate by 0.1 per cent each for 2019 and 2020 and by 0.2 percentage for
2021.
 Earlier in December, IMF chief economist Gita Gopinath had estimated
a likely cutdown in India’s growth estimate during the January review.

 8 per cent for the current fiscal year which is expected to rise to 5.8 per
cent in 2020?  The IMF attributed the slash in growth rate to the
slowdown in demand in the domestic market and stress in the nonbank
financial sector.

 In its World Economic Outlook Report, IMF stated that the growth markdown
largely
reflects a downward revision to India’s projection, where domestic
demand has slowed more sharply than expected amid stress in nonbank
financial sector and a decline in credit growth.

 United Nations had also cut down India’s growth estimate for
Financial Year 2020 to 5 per cent from 5.7 per cent. World Bank had also
cut its estimate to 5 per cent from its earlier
prediction of 6 per cent
NBFC crisis :-
The continuing liquidity crunch facing non- banking financial companies
is likely to result in creasing bad loans risks for banks both from these
shadow banks as well as from companies
relying on such lenders for funding, warns a report.
The spillover of stress among nbfcs to borrowers, and ultimately to
banks, will hinder improvements in banks' asset quality, profitability and
capital, which is credit negative
Owing to liquidity crisis, nbfcs are forced to reduce lending, leading to
funding constraints for borrowers relying on non-bank lenders.
This increases the risk of loan losses for nbfcs, and as a result, they will
continue to have difficulty in obtaining funding.
 Also, as NBFC customers' financials weaken, banks will reduce lending
to them, which in turn will further worsen their funding stress and can
lead to more bad loans from these
companies for banks, it warned.
 A type of NBFC credit to controlling shareholders, or promoters, of
large listed companies across various industries is also emerging as a
source of asset risk for banks.
 Corporate promoters use their company shares as collateral to borrow,
mostly from nbfcs or mutual funds, typically for the purpose of making
investments, including in external
businesses
 "The risk for banks is that promoters with weak governance can use
company resources to repay their debt, causing financial damage to their
businesses, which as a consequence, can default on their own loans from
banks, the report said.
 Refinancing can be difficult for promoters of companies as investments they make
using
 Loans are often illiquid, a problem made worse by tighter availability of credit
from nbfcs.
 The report further said the non-bank lenders collectively have a large
market share in retail and SME loans, a segment that has grown rapidly
in recent years and now is susceptible to asset quality deterioration as the
economy slows.
 "A curtailing of lending by nbfcs will add to risks from retail loans for
banks by reducing the availability of credit that individuals can use for
refinancing and by contributing to the slowdown," the agency said.
 2.4 SWOT ANALYSIS OF NBFCS
Strengths:-
 High on service aspect
 Strong last-mile approach
 Focus on recovery
 Easy and fast appraisal and disbursements
 Regional linkages
 Able to generate higher yield on assets
 Attained critical mass in terms of size
 Own employees versus dsas

Weaknesses:-
 Weak in urban markets
 Weak credit history of most nbfcs
 Largely restricted to the regional markets (say South India)
 Weaker risk management and technology systems
 Too much of diversification from core business
 Higher regulatory restrictions

Opportunities:-
 Augmentation of capital and leveraging for growth
 Large untapped market, both rural and urban and also geographically
 Demographic changes and under-penetration
 New opportunities in credit card, personal finance, home equity
and distribution of mutual fund schemes
 Tie-up with global financial sector giants
 Blurring gap between banks in terms of costs of funds
 Securitization, to liberate funds to fuel asset growth

Threats:-
 Weak financial health of many of the nbfcs
 High cost of funds
 Asset quality deterioration may not only wipe out profits but also net worth
 Entry of foreign players in post-2009 scenario
 Growing retail thrust within banks
CRISIL NBFC REPORT :-
"However, increases in banks' real estate npls will be marginal as their direct
exposures to
real estate companies remain small, growing more slowly than NBFC
loans to the sector," it said
After witnessing healthy growth over the past few years, non-bank credit
growth slowed down in the second half of fiscal 2019 due to the tight
liquidity conditions that engulfed the sector. Consequently, Non Bank
Financial Companies (nbfcs) which were gaining market
share from banks across major asset classes in the past could not do so in fiscal
2019.
Going forward, nbfcs will need to recalibrate their strategies in order to deal with
the
changing business dynamics. How would this impact the credit growth of
the sector? When is the liquidity situation going to improve? Can nbfcs
achieve pre-2018 growth in the medium term or will the growth remain
anemic?
What are the key factors that will drive their growth? Will their earnings
growth trajectory be lower? What will be the capital that they will need
over the next 1-2 years? What will
separate the winners from the losers? Where are the opportunities for growth?
CRISIL Research's NBFC Report, 2019 delves deep into the fast-changing industry
landscape to come up with the answers. The report contains CRISIL
Research's perspective on growth prospects, competitive scenario and the
attractiveness of the 11 segments in which nbfcs operate and also gives a
perspective on the emerging fintech market.
The coverage also includes:
 Outlook on growth and delinquencies, credit costs by segment
 Segment-wise profitability outlook, considering business growth,
resource profile and asset quality
 Detailed assessment of competitive scenario with banks and market
share of nbfcs in various segments
 Perspective on regulatory direction in each segment
 Financial and operational benchmarks across various segments
 Product segments covered

Housing finance Low cost housing finance

Infrastructure finance MSME finance - secured (including LAP) and

unsecured
Auto finance Wholesale finance

Micro finance Gold loans

Consumer durables finance Construction equipment finance

Education loans

Coverage
Overview For each of the segments covered

Outlook on yields and spreads in fiscals 2019 and Overall growth in the industry
2020

Relative attractiveness of the NBFC segments Market share of nbfcs vs banks

based on growth and profitability outlooks

Competitive positioning of nbfcs across key Growth outlook for nbfc

segments

Outlook on asset quality in the NBFC industry Profitability of nbfcs: Review & outlook

View on the borrowing mix of nbfcs Asset quality: Review & outlook

Capital-raising requirement in the medium term Key growth drivers and challenges
COMPANY PROFILE:-

Bajaj Group is an Indian conglomerate founded by Jamnalal Bajaj in

1926, Mumbai. Bajaj Group is one of the oldest & largest conglomerates
based in Mumbai, Maharashtra. The group comprises 34 companies & its
flagship company Bajaj Auto is ranked as the world's fourth largest two-
and three- wheeler manufacturer. Some of the notable companies are
Bajaj Electricals, Mukand Ltd & Bajaj Hindustan Ltd. Involvement in
various industries that
include automobiles (2- and 3-wheelers), home appliances, lighting, iron
and steel, insurance, travel and finance. The Group is headed by Rahul
Bajaj
Bajaj Group is an Indian multinational conglomerate founded by Jamnalal
Bajaj in Mumbai in 1926.[2][3] The group comprises 40 companies and
its flagship company Bajaj Auto is ranked as the world's fourth
largest two- and three-wheeler
manufacturer.[4] The group has involvement in various industries that
include automobiles (2- and 3-wheelers), home appliances, lighting, iron
and steel, insurance, travel and finance.
Bajaj immensely benefited from license Raj due to their affiliation to the
then ruling Nehru– Gandhi family.
BAJAJ GROUP OF COMPANIES :-
 Bachhraj & Company Pvt. Ltd.
 Bachhraj Factories Pvt. Ltd.
 Bajaj Allianz General Insurance Company Ltd.
 Bajaj Allianz Life Insurance Company Ltd.
 Bajaj Auto Finance Ltd.
 Bajaj Auto Holdings Ltd.
 Bajaj Auto Ltd.  Bajaj Electricals Ltd.
 Bajaj Finserv Ltd.
 Bajaj Holdings & Investment Ltd.
 Bajaj International Pvt. Ltd.
 Bajaj Sevashram Pvt. Ltd.
 Bajaj Ventures Ltd.
 Baroda Industries Pvt. Ltd.
 Hercules Hoists Ltd.
 Hind Lamps Ltd.
 Hind Musafir Agency Ltd.
 Jamnalal Sons Pvt. Ltd.
 Jeevan Ltd.
 Maharashtra Scooters Ltd.
 Mukand Engineers Ltd.
 Mukand Global Finance Ltd.
 Mukand International Ltd.
 Mukand Ltd
GROUP STRUCTURE :-

BAJAJ FINSERV LIMITED:-

Bajaj Finance Limited, a subsidiary of Bajaj Finserv, is an Indian Non-
Banking Financial Company (NBFC). The company deals in Consumer
Finance, SME (Small and Medium-
sized Enterprises) Commercial Lending, and Wealth Management.
Originally incorporated as Bajaj Auto Finance Limited on March 25,
1987, the non-bank singularly focused on providing two and three
wheeler finance. After 11 years in the auto finance market, Bajaj Auto
Finance Ltd launched its initial public issue of equity share and was
listed on the BSE and NSE.. At the turn of the 20th century, the
companyventured into the durables finance
sector. In the subsequent years, Bajaj Auto Finance diversified into
Business and property loans as
well[Link] - cite_note-3. In the year
2006, the company’s assets under management hit the Rs.1,000 crore
mark and is currently at Rs.52,332 crore. 2010 saw the company’s
registered name change from Bajaj Auto Finance Limited to Bajaj
Finance Limited.
 Bajaj Finserv was formed in April 2007 as a result of its demerger from
Bajaj Auto Limited as a separate entity to focus purely on the financial
services business of the group. The
process of demerger was completed in Feb 2008.
  This demerger was not only to unlock the value in the high growth business areas
of Auto,
Insurance, Finance sectors and Wind Power but to also to independently
run these core businesses and strengthen their competencies.
 The wind power project, the stakes in the life and general insurance companies and
consumer finance along with their respective assets and liabilities got vested in Bajaj
Finserv
Limited. In addition to that, cash and cash equivalent of INR 8,000
million (then market value) was also transferred to the company.
 The demerger has enabled investors to hold separate focused stocks
and also facilitated transparent benchmarking of the companies to their
peers in their respective industries.
 The constantly changing demographics and dynamics of the Indian
economy, has led to creation of various needs of the customer.
 The Indian customer now demands proper avenues of channelizing their
savings, financial protection and is also desirous of spending more on
valuable goods and services.
 All these wants need to be met by dynamic players in the financial
services space. Bajaj Finserv was formed specifically to cater to these
needs.
 The company was also formed to touch and improve the lives of a growing number
of
people in the country, and in doing so, deliver superior corporate values to its
shareholders
 He operating companies carry with them the Bajaj brand, which carries with
it decades of commitment to business ethics, integrity and highest standards
of fiduciary responsibility.

Vision and Mission of

the Organization :

Vision:

Bajaj Finserv has a vision to become a full-fledged financial services company

and be the financial partner to the Indian consumer and help him across his
financial needs, whether for finance, for investment management, for
protection or for post-retirement support, throughout his lifecycle. Mission:
Bajaj Finserv aims to be the most useful, reliable and efficient provider of
Financial Services. It is our continuous endeavor to be a trustworthy advisor to
our clients, helping them achieve their financial goals.
Area of operation:

 Consumer Durable Finance

 Two and Three Wheeler Finance

 Lifestyle product finance

 Vendor finance

 Construction

Equipment Finance

Objective of the

Organization:

Our main objects as contained in our Memorandum of Association include:

1. To Finance industrial by way advance ,deposit or lend money, securities

and propertied or with any Company, Body corporate, trust, firm, person
or association whether falling under the same management or otherwise,
with or without security and on such terms as may be determined
from time to time, and to carry on and undertake the business of finance
and investment and to provide venture capital, seed capital, loan capital
and to participate in equity preference share capital or to give guarantees
on behalf of the company in the matter and to promote companies
engaged in industrial and trading business and to act as Financia
Consultants, Management whether for finance, for investment
management, for protection or for post-retirement support, throughout
his lifecycle. Mission: Bajaj Finserv aims to be the most useful, reliable and
efficient provider of Financial Services. It is our continuous endeavor to be
a trustworthy advisor to our clients, helping them achieve their financial
goals. Consultants, Brokers, Dealers, Agents and to carry on the business
of share broking, money broking ,exchange
2. Broking, bill broking and general brokers for shares ,debentures,
debenture-stock, bonds, units, obligations, securities ,commodities,
bullion currencies and to manage the funds of any person, firm, body
corporate or trust by investment in various avenues like Growth Fund,
income fund, risk fund, tax exempt funds, pension /superannuation funds
and to pass on the benefits of portfolio investments to the investor as
dividends, bonus, interest, etc.
3. To carry on the business as an investment company and to underwrite,
sub-underwrite, to investigating , and acquire by gift or otherwise and
hold, sell, buy or otherwise deal in shares debentures, debentures-
stocks, bond, units, obligations and securities issued or guaranteed by
Indian or Foreign Governments, States, Dominions, Sovereigns,
Municipalities.
Different Department
 Organization structure
Organization Hierarchy:
A key issue in accomplishing the goals identified in the planning
process is structuring the work of organization. Organizations are group
of people, with ideas and resources working toward common goals. The
purpose of the organizing function is to make the best use of the
organizations resources to achieve organizational goals. Organizational
Structure is the formal decisions making framework by which job tasks
are divided, grouped and
coordinated. Formalization is an important aspect of structure. It is the
extent to which the unit of organization is explicitly defined and its
policies, procedures and goals are clearly
stated. It is the official organizational structure conceived and built by top
management. The formal organization can be seen and represented in
chart form. An organization chart displays the organizational structure
and shows job titles, lines of authority and relationship between
departments. Organizational Structure allows the expressed allocation of
responsibilities for different functions and processes to different entities.
Ordinary description of such entities is as branch site, department, work
group and single group of people.
Product Profile of the Organization: Bajaj Finserv Lending
offers loans for various needs. We offer loans for Bajaj Auto
Two Wheelers under the name of Bajaj Auto Finance Ltd. We
offer Consumer Durable Loans, Personal Loans, Loan against
Property, Small Business Loans, Construction Equipment
Loans, Loan against Securities and Insurance Services under
the name of Bajaj Finserv Lending. Bajaj Finserv Lending is
one of the most diversified nbfcs in the market catering to
more than 5 million customers across the country. Apart from
being a well-recognized organization,they pride us for holding
the highest credit rating of FAAA/Stable for any NBFC in the
country today. The product offerings include Consumer
Durable Loans, Personal Loans, Loan against Property, Small
Business Loans, Two-wheeler and Three – Wheeler Loans,
Construction Equipment Loans, Loans against Securities and
Insurance
Services.
Competitors for BAJAJ FINSERV :-
 IDFC FIRST BANK
 SHRIRAM CITY

 MAHINDRA FINANCE

 HDFC BANK DEAL 4 LOANS

 BANK BAZAAR

 MUTHOOT FINANCE

 EDELWISS

 RELIANCE CAPITAL
Consumer Finance
 Durable Finance
 Lifestyle Finance
 Digital Product Finance
 EMI Card
 2 & 3 Wheeler Finance
 Personal Loan
 Loan against FD
 Extended warranty
 Gold Loan
 Home Loan
 Retail EMI
 Retailer Finance
 E-commerce
 Co-branded Credit Card
 Co-branded Wallet

Today, we are the top consumer electronics, digital

products, lifestyle products and personal loans lenders in
India.
SME Finance
 Home Loan
 Loan against Property
 Gold Loan
 Lease rental discounting
 Business Loan
 Loan Against Shares
 Professional Loan
 Working Capital Loans
 Developer Finance
 Used Car Finance

Present in the top 40 cities in India, our SME business is

growing at the rate comfortably higher than the industry.
Commercial Lending
 Vendor Financing
 Large Value Lease Rental Discounting
 Loans against Securities
 Financial Institutions Lending
 Light Engineering Finance
 Corporate Finance
 Warehouse Financing Investment
 Fixed Deposit
 Mutual Funds Personal Loan Interest Rates & Charges
Bajaj Finserv offers attractive interest rates on personal loans up to Rs.25
lakh that can help you meet a range of financial requirements. Get
collateral-free loans, with minimum
documentation, flexible tenor and disbursal within 24 hours of approval.
With Bajaj Finserv Personal Loan, you do not have to worry about any
hidden fees or charges. Here are more details on the personal loan
interest rates and charges:
If you are a salaried professional aged between 25 and 58
years living in India, you can easily qualify for a loan. As long
as you match the personal loan
eligibility criteria and minimum net salary specified based on
your city of residence, you can avail a loan with ease and best
personal loan interest rates.
Personal Loan Foreclosure Charges

Personal Loan Part-prepayment Charges

 *Part-prepayment made should be more than 1 EMI.

 *These charges not applicable for Flexi Loan facility
Annual/Additional Maintenance Charges

These charges will be levied annually.

Education Loan:- 10.45% per Anum
Gold Loan:- Fees & Charges
Business Loan Fees & Interest Rates
Bajaj Finserv offers the lowest rate of interest
on Business Loan. Read more about our latest
interest rate and fees and charges below
Annual/Additional Maintenance Charges

Strategy Drivers:-
When we thought of our strategy to achieve the Big Goal, we kept in mind an
important
element: what strength of our past do we want to carry into the future? Of
all our options, one thought resonated across, reflecting in all our
outcomes over the course of our existence –
Sustainability. It is the legacy that our history has created. This is the
outcome of over half a century of work of our parent – theBajaj Group.
Delivered through each business that the Group has ventured into.
Anything that we do has to pass through this critical filter. Each of the
five drivers of our strategy build on this core.

Focus on Existing Customers

More products per customer cannot be achieved by more customers but more
satisfied
customers. More satisfied our customers, more likely they’ll partner with
us for their next big pursuit. More likely,they’ll recommend their family
and friends to us. The more our
customers recommend us, the less we need to worry on getting new
customers. The less we worry on getting new customers the more we’ll
focus on existing customers.
 Chapter 3
RESEARCH
METHODOLOGY


A potential cash machine Subramaniam, Arun June 2012

The article focuses on the emergence and growth of the Bajaj

Finserv, a new company in financial services industry in India,
under the leadership of Sanjiv Bajaj, an engineer. It informs
that the company is diversified, well capitalized and soundly
managed as it owes its success to its growth in retail
industries. It also informs that the focus of the company is on
the customers of retail industries as it has trained its agents to
sell wider range of insurance products.
Taxmann’s (2013)

Published “Statutory Guide for Non-Banking Financial

Companies” is published by Tax mann’s Publications, New
Delhi. The book listed the laws
relating to NonBanking Financial Companies. The rules and
laws governing the kinds of businesses undertaken by differ-
ent types of nbfcs are also discussed
Amit Kumar and Anshika Agarwal (2014)

Published a paper entitled “Latest Trends in Non- banking

Financial Institutions” in ‘Academicia: An International
Multidisciplinary Research Journal’. In Indian Economy, there
are two major Financial Institutions, one is banking and other
is Non-Banking. The Non-Banking Financial Institutions plays
an important role in our economy as they provide financial ser-
vices on wide range, they also work to offer enhanced equity
and risk- based products, along with this they also provide
short to long term finance to different sectors
of the economy, and many other functions. This paper
examines the latest trends in Non-Banking Financial
Institutions. This paper analyzes the growth and enhanced
prosperity of financial institutions in India.
Ravi Puliani and Mahesh Puliani (2016)

writes a book entitled “Manual of Non-Banking Financial

Companies”. The book discussed the glossary of terms that
are used in banking operationsand non- banking activities.
The book covers the circulars and directions issued by
Reserve Bank of India from time to time to control, manage
and regulate the business of nbfcs.
played a significant role in the financial system. Many
specialized services such as factoring, venture capital finance,
and financing road transport were
championed by these institutions. NBFC sector has more significantly
seen a
fair degree of consolidation, leading to the emergence of large
companies with diversified activities. However, the recent
financial crisis has highlighted the importance of widening the
focus of NBFC regulations to take particular accountof risks
arising from the regulatory gaps, from arbitrage opportunities
and from inter-connectedness of various activities and entities
associated with the financial system. The regulatory regime is
lighter and different than the banks. The steady increase in
bank credit to nbfcs over the recent

Thilakam and Saravanan (2018)

writes on “CAMEL Analysis of nbfcs in Tamil Nadu” in
‘International Journal of Business and Administration
Research Review’. Financial intermediation is a crucial
function of Banks, Non Banking financial companies (nbfcs)
and
DevelopmentFinancial Institutions(dfis) the post reform period in India
is
characterized by phenomenal growth of nbfcs complementing
the role of banks in mobilizing funds and making it available
for investment purposes. During the last decade nbfcs have
undergone wide volatility and change as an industry and have
been witnessing considerable business upheaval over the last
decade
becauseof market dynamics, public sentiments and regulatory
environment. To evaluate the soundness of nbfcs in Tamil
Nadu over a decade, the authors made an attempt of CAMEL
criteria for analysis of selected Companies. Based on
findings the suggestions were offered to overcome the
difficulties face by selected nbfcs in their development.
Bajaj Finserv sacks some senior officials who were cutting
deals to mask loan defaults Finance Snapshot2014
The article reports that the Indian financing company Bajaj Finserv Ltd. Has fired some of
its senior
executives who were cutting deals to cover loan defaults. It states that two senior
officials of the group company Bajaj Finance Ltd (BFL) were fired, while three
other employees left the company. It mentions that the irregular transactions of
the officials which aimed at showing the borrowers'
accounts had bounced.

EMI Finance App For Pre-

Approved Loans Business
World (2015)
The article offers brief information on the Bajaj Finserv Experia equated
monthly instalment (EMI) finance app.
Bajaj Finserv Launches India's First Consumer Durable
Finance App With Instant Loan Approvals(2015)
The article reports on the launch of India's first easy monthly
instalment (EMI) finance app from consumer durable finance company
Bajaj Finserv. It says that the consumers will find the app useful for
buying items, including smartphones, furniture, and televisions, on
emis.
Comments from Bajaj Finance Ltd.'s chief executive officer (CEO) Rajeev Jain are
provided

STATEMENT OF THE PROBLEM

Loan is one of the major elements of finance to a common man. The
banks advance money in no of ways like Housing Loan, Education
Loan, Property Loan, Personal Loan, Vehicle
Loan, Etc. Banks usually follow different procedure for advancing
different types of loan and advances. In order to know the different
procedure in sanctioning different kinds of loans and the rate of interest
charged to different type of loan this study has been undertaken.

OBJECTIVES OF THE STUDY

 To analyze different types of loans and advances made by Bajaj Finance Limited.
 To list out some important loans and advance of the Interest Bajaj
finance limited and there interest rates and security needed for granting
loans and advances.
 To analyze the financial position of the Bajaj finance limited.
 To make suggestions and recommendations based on the study
STATISTICAL TOOLS USED FOR DATA ANALYSIS
The statistical tools used the data are:
LIMITATION OF THE STUDY

All the possible care has been taken to collect the information and make the study as
authentic as possible. However it is subjected to certain information. They are as
under:
All the findings and recommendations, which are stated, are applicable
only for the current period.
The study is limited to the extent to the data given by the customer.
Based on limited information it is not possible to arrive at a proper conclusion.
The Accuracy of the study depends on the accuracy of information and
records provided by the Bajaj Finance Limited and consumer

Research Methodology:
Methodology is a research strategy that forms the structure the project
to be undertaken and also helps in identifying the method to be used.
Methodology and Method are two different concepts. Methodology is a
systematic and theoretical analysis of the methods being used in the
study. Whereas, Methods are the tools or techniquesthat are used in the
form of surveys, interviews etc. Methods and Methodology are not
interchangeable with each other. They are vary two different concepts.
Methodology explains how a research is to be carried out, how to find
information and how it is to be interpreted. Generally, methodology
means branch of knowledge which forms the base of any research

3.1OBJECTIVES OF THE STUDY:

The objectives are designed to have a particular direction to the study
like what aspect of the topic is going to be studied. A topic can be
studied from various parameter, the objectives
designed for a project gives an idea that in what manner the topic is
studied, what is the flow of project, what are the variables selected for
the project, etc.
 understand the customer satisfaction level of Bajaj Allianz,a leading
private life insurance company.
Understand the brand image of bajaj allianz in the market of life insurance product
To understand the level of security that the customer have owning an
insurance policy of Bajaj Allianz
 3.1. HYPOTHESIS OF THE STUDY:
Hypothesis is referred as the presumptions made by an individual to
study the research project. These presumptions are made in a way to
satisfy the objectives framed for the
project. Framing of hypothesis is an important part of the research as in
this step the research problem or the problem statement is designed on
which the entire research is based.

The hypothesis or the research problem of the study is designed in such manner to
find out
the relationship between the variables, i.e. does the effect on has any
impact on the other. We can also say that the following hypothesis will
let us know how closely they are correlated with each other. In order to
study this topic 2 hypotheses are framed.

Hypothesis:-
H0: Nature of satisfaction level for customers is dependent to service
provided by Bajaj Alliance
H1: Nature of satisfaction level for customers is independent to service
provided by Bajaj Alliance

3.3 Scope of Insurance

The opening up of the insurance sector to private companies has made
available more product and world class service to Indian customer. To quote
Mr. n. Rangachari former chairman of IRDA “all these years the
nationalized insurance has been bleeding us” “the future for
liberalized insurance sector looks bright with a monitoring agency
committed to promoting the interest of the customers”.
According to business world, “the sheer size and potential of Indian insurance
market has
attracted many new players. Even going by govt estimates there are about
312 million middle class customers with financial resources to purchase
insurance products, only 2.5 % of this is covered by any form of
insurance Sales agents will remain the prime distribution channel, and
according to some estimated insurance could finally end up creating over
20,000 jobs for sales representatives alone. The IRDA has already
accredited 14 insurance training schools
spread over a few major cities of our country, which would churn out
about some 1500 students annually.
the analysis of the satisfaction of insurance products and insurance
companies of Bajaj Allianz customer only located in
Visakhapatnam.
So, the scope of the insurance sector is wide and open where there
a lot of opportunities for the sector to grow in the next couple of
years. More and more private companies with international
experiences are entering into the market with knowing the scope
that is available. Moreover, each and every individual have started
realizing the importance of life insurance in their life as the life is
considered to be really unexpected in the world we live today. I
have limited the scope of my study
We can a sample of respondents from Bajaj Allianz only.
Moreover, we can get the segmented data

3.4 TYPE OF STUDY:

There are various types of study for doing a research, to name some descriptive study,
exploratory study, historical study, empirical study, qualitative
study, quantitative study, etc. For the purpose of this research,
the research has used Descriptive study. Descriptive study is a
method usually used to describe the characteristics of the
population that is being studied.
The descriptive study is mostly used to get the answer for the question „what rather
than
answer ‟ for „why The reason for selecting Descriptive research is
bec ‟ ause it gives special focus on specific type of questions,
methods, and outcomes of the data. The best part about Descriptive
study is that it can study the qualitative and quantitative aspects i.e.
there is no need to study the qualitative or quantitative aspects
separately. Therefore, it can involve the tables and graphs and
numbers or the physical qualities in the study. Descriptive study is
usually used by the anthropologists, psychologists and social
scientists
This research is based on descriptive study because
this project studies the qualitative and quantitative
aspects the attendance of commerce students of
Mumbai University. However, this is not only
descriptive research but also pure research; we can
say that this research is a mixture of descriptive and
pure research. As the project work is completely first
hand, descriptive study is used only to understand the
topic. However, my research does involve review of
literature which is the base of descriptive study. The
significance level used to test the credibility of my
research used is 5% as descriptive study.

3.5 Sample Size:

 Sample size determination is the process of choosing the number of
respondents
 The sample design used to represent the survey data isin the
form of Pie-Charts and Bar-Charts based on the respondents of
the survey. Probability sampling was used to collect responses.

3.7 Data collection method:

Data for the study was collected from the primary as well as secondary
sources.

Primary Source Of Data Collection:

Primary source of data collection consisted of survey method.
The survey was collected through a Structured Questionnaire.
The questionnaire was prepared
keeping in mind the objectives of the study and factors that were
to be considered for the study. Questionnaire was prepared in
such a manner that it could be easily
understood by the respondents. The questionnaire being
structured was in a single format to save time of the respondents.
Most of the questions were close ended, so that the respondents
could easily select one given alternative while answering the
questionnaire. The questionnaire mainly consisted of two parts
i.e. Name of the
Respondent and Benefits social media has done in a positive way
in their lives and in the world according to them.

Secondary Source Of Data Collection:

The secondary source of data collection is assessed to gain information and
knowledge about our research problem that may be previously
discussed by some other researcher. The secondary is referred to
know what has already been discussed and what more scope can
be there for research. The secondary data is taken from
selective websites and from online publication of some researchers. The
secondary
data was useful for the study of Review of Literature. We could
study various aspects of different researchers which gave us an
idea about the factors being previously
discussed and also the conclusions drawn from them. It also gave
us an insight on what more could be studied to solve the research
problem.
observation to include in a statistical sample. It is an
importantfeature of a research study because on the basis of
sample size data is collected and interpreted to give accurate and
appropriate results.
The correct and appropriate sample size is said to give more
accurate results. For example, in a census, data is collected from
the entire population. Therefore, the sample size is equal to
population of the country. Keeping in mind the rate of
nonresponse and non-availability of respondents, the sample
size was taken between 25100 working professionals. It was
Random sampling method that was considered to decide the
sample size.
Due to the sample size being small there may be slight
inaccuracy of data that can be rectified by furtherstudy.

3.8. RESEARCH TOOLS USED:

Research tools are anything which helps in the collection of information for
a
particular research such as observation forms, interview
schedules, questionnaires, and the interview guides. Hence, for
testing the information collected research or statistical tools are
used. There various types of research tools used to test the data in
different ways. These statistical tools are usually applied on the
tabulated data. These tools can be of two types: parametric tests
and nonparametric tests. For applying
parametric test, the information should be distributed in the
tabular format whereas for applying non-parametric test, no such
format is required. It can be applied on any type of data of even
and uneven distribution. The parametric tests are usually applied
on the metric data only whereas the non-parametric test is
applied on the non-metric data. For the purpose of this research,
only parametric tests are used i.e. only metric data is analyzed.
There are various parametric tests: t-test; f-test; z-test; annova
chisquare; descriptive statistics which includes mean, median,
mode, standard deviation and variance; correlation, regression,
and cross tabulation. Here the
researcher has used t-test, f-test, annova and descriptive statistics.
The following are used because my data collected is a scaled data
and for testing of hypothesis for population mean and to find out
the variance in the population or the data collected.
T-test is type of tools for hypothesis testing. It is usually used to find out the
significant difference between the means of two groups. F-test is
used when two models is to be compared in order to identify the
model that fits the population from which the data is sampled.
Annova also known as „Analysis of Variance is a
statistical too ‟ l used to test the differences between two or more
means. Descriptive Statistics is a tool used to measure various
measures of central tendencies and
Measures of variability
 3.9 Limitations of the study
The study suffers from a few limitations, which will have to be
kept in mind for the findings to be fairly interpreted

The results should be interpreted with the bleow limitations in perspective:

• The recommendations are subjected to time and cost constraint
• Sampling has its own limitations, which would have resulted in minor
errors
• There can be errors due to bias of respondents
• The size of the sampling was not big enough to arrive at strong conclusion

• Following limitation were faced during the study:

1. While designing the questionnaire it was kept in mind to
gather more and more information from each target person.
For the neither present nor descriptive
question could have served the purpose. Therefore, the
questionnaire contained in the open ended questions

2. The study was conducted in Bajaj Allianz in India city,

which has 127 to 170 insurance care consultants only so
that accuracy of data so collected could be absurd
covered by circulation of questionnaire.

3. The accuracy of indication given by the respondents may not be

consider
adequate as whether the language used in the questionnaire is
understood by the respondent cannot be taken for granted.

4. The study is based on the information gathered

from the insurance care consultant might have
shown partiality towards their insurance policies.

5. Since the survey was limited to 50 insurance care

consultants it is rather difficult to give a precise conclusion
but I have tried to the best of my capability to give
the conclusion on a comprehensive manner.

Data Analysis And Interpretation

Rate the service of Bajaj finance LTD
CHAPTER 4 FINDINGS
 While paying through credit card, that much amount is blocked from the
card. As there is monthly limit in each card, so it is wise to go for Bajaj
Finserv Lending.
 Bajaj Finserv Lending provided loan on consumer durable product to
the customer as per the surrogates.
 Flexible EMI scheme in many products are available. Bajaj
Finserv Lending provides many schemes such as 12/4, 10/2, 18/6,
24/6 etc. Customer can choose any EMI Scheme option according to
their paying capability.
 As per the requirement of finance company for address proof would be required
current
place proof, and for ID proof required the valid name of person it shows
with the help of case studies.
 Consumer lending is increasing year by year but it is a small % increase in the
loans.
 The SME (small and medium enterprise) Loans are decreased year
by year. The nearly 20% decrease year by year when compared to
previous years
 The rural lending was increased year by year but the increasing is
around 2%onnly when compared to the total loans.
 The commercial Lending drastically increased after the 2017 FY. The
sudden increase of 20% in the 2017 and it was decreased 2%.
 Based on the customer review awareness on the no cost EMI policy is around 60%.
 The behavior of the Bajaj Finance Employees is good only the 3
members out of 42 are given bad rating
 48% of people know about No cost EMI through Friends.
 The 13 people out of 42 are interested to take new loans who are not taken loans
before The most of the people are feel the charge of loans in Bajaj Finserv is
medium, the 3 people feel that it is high and the 5 people low
 Based on the 2 policies the Bajaj Finserv will issue loans to the
customers based on their financial capability.
 Only 90% loan only issued by the Bajaj Finserv to the customers, the
remaining 10% should bear by the customer.
 If the CIBIL score is low the Bajaj Finance will not issue loan.
 The address proof and the financial strength proof (credit card, bank
statement, job proof, and the previous loan records, CIBIL Score card ) is
mandatory for every loan issued by the company
 CHAPTER 5
SUGGESTIONS
 The Bajaj Finserv has to increase the advertisements on the NO COST EMI policy
 The SME lending is decreased year by year the company has to look into the SME
loans.
 The banks are the competetors for bajaj Finance Limited, they are
acquiring more SME loans year by year result in decreasing in the Bajaj
Finserv SME Loan Lending.
 The interest rates and the loan processing charges has to decrease in
Bajaj Finance Limited, this will help in more customers to get attracted to
words the company.
 The processing time taking is more when comapred to the competetors so
the Bajaj Finance Limited has to use technology to improve their loan
approval systems.
 The commercial lending is increase suddenly it is good the recovery is little bit
risky.
 The Rural Lending is increased year by year but the increase is less, the
company has to look into this and increse more lending.
 The some of the new customres are interested to take loans in
the company the representatives has to take intiative to complete the
deal.
 The no of documents required for the loan approval is more, it has to minimized.
 The Company is taking long time to approve the loan, so my
suggestion is to use the technology for the quick loan approvals.
 Based on the customer reviews the Baja Finserv should open more number
of branches, the people are not able to access the branches.
 The online system of loan approval and the online and the receiving the
applications should increase
 The Bajaj Finserv is not mostly concentrating on the digital media for
the advertisements, I strongly recommend to use the digital media for the
advertisements.
 The company has to increase the issue of credit cards.
 The credit cards issuing by the company are not valid for some type of
transactions like to add money to wallets, this has to be resolved.
 The Bajaj Finserv not able to meet the competetion with the banks in
issuing loans, and as well as the recovery.
 I recommend to issue more secured loans to the customers instead of un secured
CONCLUSION 6
The study has been conducted on STUDY ON HOME
LOAN PROVIDED BY BAJAJ FINANCE

According to the objectives through the study As we know

the population is been increasing day by day the more and
more people will not have employment opportunity due to
this, the interested people will come for the
loans to start their own business, but the people who are in
middle class people they have the basic needs due to less
income the middle class people will come to take loans to
fulfill their needs, the needs in the sense like house
construction and for vehicle. The company also provides the
loans for the staff who are working in the bank for less rate of
interest. The loans like, festival advance, staff vehicle loans,
staff house building etc….
If an customer wants the loan the company
representatives will help the customers to have huge
amount for less rate of interest. If the customer’s
performance / transaction are good
CHAPTER 7
BIBLIOGRAPHY
WEBLIOGRAPHY
 BIBLIOGRAPHY:-

Guide to Security
&
Documentation of Loans
&
Advances Paperback
1 January 2017
Documentation for Loans and Advances by S K Bagchi
A study on loans and advances by vinayak-kulkarni

WEBLIOGRAPHY :-

Https://[Link]
[Link]
Https://[Link].
 ANNEXURE
1. Have you ever applied for a home
loan with Bajaj Finance?
2. What factors influenced your decision to
choose Bajaj Finance for your home loan ?
3. What features of Bajaj Finance's home
loan did you find most attractive?
4. How satisfied are you with the loan amount
and interest rate offered by Bajaj Finance?
5. How would you rate the customer support
provided by Bajaj Finance during the loan
application process ?
6. Were your queries and concerns addressed
promptly by the Bajaj Finance team?
7. How easy or difficult was it for you to
manage your loan repayments?
8. Have you ever faced any issues with loan
repayment or management?
9. How satisfied are you overall with your
experience with Bajaj Finance's home loan?
10. Would you recommend Bajaj Finance's
home loan to others?
11. Is there anything else you'd like to
share about your experience with Bajaj
Finance's home loan?