Consumer Finance

Purpose of Raising Finance

Housing Finance
It refers to providing finance to the
individual or group of individuals for
the purchase, construction or related
activities of house/flat etc. The
housing loan is a type of instalment
credit which forms the largest single
source of housing finance.
• The housing loan can be availed for
following purposes:-
• Construction
• Extension
• Purchase
• Combined loan for purchase of plot and
construction
• Acquired house through cooperative
housing society
Rate of Interest
• Fixed rate of interest loan
• Floating or variable rate of interest loan
Charges & Fees payable
• Processing fees
• Search report charges by the advocate
at the time of sanction
• Insurance charges
• Fine for non-payment of late payment
of instalments
 Security for the loan
• Primary security
• Collateral security
• Interim security
 Institutions providing housing
finance
• IDBI
• HDFC
• ICICI
• SBI
• LIC Housing Finance
• Tata Home Finance
 Parameters of the best
house loan
• Lower interest rate
• Income tax incentive
• Longest tenure
• Lowest margin
• Complete doorstep service
• no pre-payment charges
• Discount on processing fee
• Concession in credit card/ ATM card fees
 Educational Loans
The prime aim is to make careers
happen. The no. of students seeking
admission to professional courses is
multiplying every year. If one has the
ambition and drive, the banks will
take care of finances involved.
 Eligibility Criteria
• Should be an Indian national
• Belongs to the age group of 16-40 years
• Has secured admission in a
professional/technical course,
• foreign university/institution
• Should have secured minimum 60%
marks in the previous qualifying
examination
 Objectives of finance
• To finance all fees
• To meet expenses
• To provide financial assistance
• To cover course fee, hostel and mess
charges
Processing fees
SBI, CBI, BOB – do not charge any fees
HSBC and Bank of Punjab – 1% of the
loan

Repayment Period
5 -7 years after commencement of
repayment
 Automobile Finance
Under the banks auto loan scheme there is a
vehicle loan for every class i.e. 2 wheeler’s
loan, 2nd hand car loans, new car loan. The
market for auto loans is large and lot of
opportunity exists there for the banks and
other finance companies who by adopting
customer friendly policies and mass
advertising can surely make auto loan
scheme a success.
 Eligibility
• Permanent employees of govt.,
public/private sector with minimum
of 3years service.
• Professionals and self employed such
as doctors, CASs, MBAs etc.
• Persons engaged in agricultural and
allied activities.
Purpose

Auto loans are extended for the purchase

of vehicle both for personal and
professional use.
Type of loan
Finance is provided in form of term loans
extending for a period from 1 to 5 years.
Rate of interest
Varies from bank to bank
Insurance
A insurance policy is taken for market value
or 10% above the loan amount whichever is
higher.
Processing Charges
Most of the banks do not charge any
processing
fee, or Rs. 250 to Rs. 500 may be collected as
one time fee from the customers.
 Personal Loans
General purpose loans are advanced
to the individual to meet personal
expenses. Thus, with such easy
finance facility, a consumer can buy
whatever he has in mind.
Eligibility Criteria
• Salaried employees
• Self employed professionals such as
Doctors, CAs, MBAs, etc.
Loan amount
Minimum – Rs.25000
Maximum – Rs. 10,00,000
 Other features
• No security or guarantor required
• Repayment period 12 to 48 months
• Speedy approval
 Finance to meet Festival
Expenses
The lower or middle income group of
individuals who cannot satisfy the
requirements of the personal loan
scheme seek financial assistance
from the banks for short duration to
meet expenditure relating to a
festival. The bank may charge
nominal fee of Rs.100 per
application.
 Eligibility Criteria
• Employees of govt. / Profit making
Public / institutions. Etc. with a
minimum of 2 years service.
• Self employed persons
• Persons having regular source of
income from verifiable sources like
pension and interest from govt.
securities etc.
 Holiday Finance
Today, consumer who finds himself
unable to meet the cost of package
gets ready to accept the option. For
ex, SOTC’s European tour package is
priced at over Rs.76,000.
 Finance for Medical
Treatment
It is very difficult for individuals
especially the salaried class to arrange
funds at short notice to make payments
to hospitals. Banks extend loans to meet
such exigencies. Loans are available to
all such patients who are suffering from
diseases where mortality probability is
low and the patient emerges as a
healthier person after treatment.
 Benefits of Consumer
Finance
• Rising standard of living
• Forced savings
• Help consumes meet emergencies
• Increase in demand for physical
goods
Thank You