✧ IMPORTANCE OF PROJECT: -

Studying the method and procedure of salaried employees' personal loans and their disbursement
was the goal of the summer internship assignment. Understanding the steps involved in a personal
loan and how it is disbursed was the main motivation for this endeavor. Thus, the project's primary
focus was on generating leads for the personal loan product from the majority of HDFC Bank's
current customers, as well as from future consumers, clients of other banks, and current HDFC Bank
loan holders. Thus, my job at the bank was to generate more leads from HDFC Bank's current and
potential clients.

✧ OBJECTIVE OF THE PROJECT: -

➢ To learn the precise definition of credit analysis.

➢ How should it be carried out? To learn what factors The bank will consider
➢ when granting loans for different uses
➢ The procedure for assessing an applicant's loan request and determining whether it should be approved or denied
➢ To understand and research the many types of credit that banks offer

✧ SCOPE OF STUDY: -

➢ This research demonstrates how informed people are about HDFC Banks' various offerings.
➢ This research will aid in comprehending the qualifying requirements of various paid workers.

1
 ✧ CONCLUSION: -

The Housing Development Finance Corporation Limited, or HDFC, was among the first Indian
financial organizations to receive "in principle" approval from the Reserve Bank of India (RBI) to
establish a bank in the private sector. The HDFC Bank personal loan credit evaluation and
disbursement procedure, FOIR calculations, document analysis required for the loan process, and
business types based on income, tenure, and eligibility amount are all covered in detail in this
project report, which was based on the summer internship.

✧ KEY LEARNINGS: -

LEARNINGS FROM THE PRODUCT: -

 Acquire the ability to sustain enduring connections with clients by offering the finest possible service.
 Acquired knowledge about lead generation, follow-up, and conversion.
 Acquired knowledge of the personal loan product's process and its implementation.
 Examination of personal loan papers, eligibility requirements for various client types based on firm
classification and income.
 Learned how to compute FOIR based on other obligations and EMI based on loan amount and tenure

DOMAIN LEARNINGS:
◆ How to interact with customers.
◆ Helped me in enhancing my communication skills.
◆ Customer negotiating power.

2
 1. INTRODUCTION OF THE STUDY

3
 INTRODUCTION OF THE STUDY

One of the fastest-growing banking and financial services companies in India, HDFC Bank Limited, is the subject of
the study on credit analysis of personal loans.

CREDIT ANALYSIS: -
the process of evaluating a borrower's loan application or a company's debt issue in order to determine the borrower's
chances of meeting their obligations."

THE CREDIT CONCEPT:

It is the idea that if you build a reputation for paying your debts on time, you will eventually be able to borrow money.

Because it allows you to borrow money when you need it and because borrowing money for major expenses like a
home, vehicle, or college is less expensive the more creditworthy you are, credit is essential.

On the other hand, if your credit risk is low, you might not be able to borrow when you need it or you could be able to
borrow, but only at a high interest rate.

4
 3. INDUSTRY PROFILE

5
 INDUSTRY PROFILE
3.1 Meaning and definition: -

A bank is a type of financial organization that offers credit and accepts deposits. The two primary types of banking in
the modern industrial world are central and commercial banking. Banking is the commercial activity of receiving,
safeguarding, and then lending out other people's money in an effort to turn a profit. A banker is an individual, group,
or business that focuses on raising and receiving money.

Conclusion of the bank: -

Accept deposits of money from the

public. Pay interest on money deposited
with it. Lend or invest money.
Repays amount on demanded.

3.2 Banking Sector in India : -

According to the Reserve Bank of India (RBI), the Indian banking sector is well-capitalized and governed
by sensible laws. The country's financial and economic situation is far superior than that of any other
country in the globe. Research on credit, market, and liquidity risk shows that Indian banks are typically
strong and have done well during the global crisis.

The Indian banking industry has recently been exposed to new banking ideas including payments and
small financing institutions. In recent years, India has also focused on growing its banking sector reach
through a number of programs, including as the Pradhan Mantri Jan Dhan Yojana and Post Payment
Banks.

Together with significant banking sector changes including digital payments, neo-banking, the expansion
of Indian NBFCs, and fin-tech, these initiatives have significantly increased financial inclusion in India
and influenced the credit cycle of the nation.

The Indian fintech sector is expected to reach a valuation of $150 billion USD by 2025. The third-largest
Fin Tech ecosystem in the world is found in India. India is one of the Fin tech markets with the fastest
growth rates in the world. More than 2,000 Financial Technology (Fin Tech) businesses in India already
hold DPI IT accreditation, and the number is rapidly increasing.

6
 Out of 25 nations, India's digital payments system has advanced the most, and the country's Immediate
Payment Service (IMPS) is the only one ranked at level five of the Faster Payments Innovation Index
(FPII). Real-time payments have also been transformed by India's Unified Payments Interface (UPI),
which has been working to expand internationally in recent years. The country's Immediate Payment
Service (IMPS) is the only one classified at level five of the Faster Payments Innovation Index (FPII),
and India's digital payments system has progressed the most out of 25 countries. Real-time payments
have also been revolutionized in recent years by India's Unified Payments Interface (UPI), which has
also sought to increase its worldwide footprint.

3.3 Market size: -

The Indian financial system consists of twelve public banks, twenty-one commercial banks, forty-four foreign banks,
and twelve minor finance organizations. In all, there were 16,88,558 micro-ATMs in India as of December 2023.
Furthermore, there are 1,26,205 ATMs and Cash Recycling Machines (CRMs) on-site and 93,671 off-site.

In the first four months of FY23, banks installed 2,796 ATMs, up from 1,486 in FY22 and 2,815 in FY21.All new
bank account openings in rural India are done online. BCG predicts that 65 percent of payments will be done online by
2026.

In 2023, the combined assets of the public and private banking sectors are $1016.39 billion and $186.70 billion,
respectively. In 2023, public sector banks controlled 58.31% of total banking assets, including those of private, public,
and international banks.

In 2023, public banks earned $102.4 billion in interest revenue. Interest revenue in the private banking industry hit
US$70 billion in 2023.

The Indian digital lending market expanded at a compound annual growth rate (CAGR) of 39.5% during a ten-year
period. The Indian digital consumer lending industry is expected to reach a valuation of over US$720 billion by 2030,
which is over half of the US$1.3 trillion potential market for digital lending.

According to the RBI's Scheduled Banks' Statement, deposits at all scheduled banks rose by an incredible Rs. 200.6
lakh crore (US$ 2,414.15 billion) as of January 26th, 2024.

7
 3.4 Investments/Developments: -
 Google India Digital Services (P) Limited and NPCI International Payments Ltd (NIPL) have signed a
Memorandum of Understanding (MoU) to bring the game-changing impact of UPI to countries outside
of India.

● The Warehousing Development Regulatory Authority and Punjab & Sind Bank signed a
Memorandum of Understanding to offer low-interest loans to farmers.

 The Bancassurance Partnership was established in December 2023 by Ujjivan Small Finance Bank and ICICI
Prudential Life Insurance.

In October 2023, AU Small Finance Bank declared its intention to acquire Fin-care Small Finance Bank in an
all-share merger.

● The National Payments Corporation of India (NPCI) reported that, as of August 30, 2023, there were 10.241
billion UPI transactions.
.

● Hitachi Payment Services and NPCI introduced India's first UPI-ATM in September 2023.

 In September 2023, the Reserve Bank of India is expected to launch CBDC into the call money
market.

In July 2023, Mahindra & Mahindra acquires a minority stake in RBL Bank.

8
 ● In July 2023, State Bank of India will buy a 100% stake in SBI Capital in SBICAP Ventures for
US$ 85.25 million (Rs. 708 crore).

● In June 2023, State Bank of India would acquire the whole 20% ownership of SBI Capital
Markets in SBI Pension Funds.

In April 2023, HDFC Bank will acquire a minimum of 20% of HDFC Investments' Griha Pte
subsidiary.

In April 2022, IDFC will sell its mutual fund business to a group headed by Bandhan-Financial Holdings
for US$550.23 million (Rs. 4,500 crore).

● Aggressive Axis Bank acquired Citi's consumer unit in India in March 2022 for US$1.6 billion.

In December 2022, HDFC Bank will purchase a 7.75% stake in the fintech firm Mintoak.

● A Refinitiv analysis claims that domestic M&A activity hit all-time highs in 2022, rising 156.3% from
2021 to US$119.2 billion. Companies include HDFC Bank, HDFC, Ambuja Cements, ACC, Adani Group
Bio-con, Mind Tree, L&T Info-tech, AM/NS, and Essar Ports were involved in M&A deals in 2022.

● In April 2022, HDFC Bank, the largest private bank in India, announced a transnational merger with HDFC
Limited.

On November 09, 2021, RBI announced the commencement of its first global hackathon, "HARBINGER 2021 –
Innovation for Transformation," with the theme "Smarter Digital Payments."

● In November 2021, Kotak Mahindra Bank announced that it has acquired a 9.98% stake in KFin Technologies for a
sum of Rs. 310 crore (US$ 41.62 million).

In October 2021, Indian Bank announced that it has acquired a 13.27% stake in the National Asset Reconstruction
Company Ltd. (NARCL) proposed venture.

● To enable financing for small merchants, Google Pay for Business teamed up with FlexiLoans, a digital lending
platform for MSMEs, in July 2021.

9
 ● In December 2020, in response to the RBI’s cautionary message, the Digital Lenders’ Association
issued a revised code of conduct for digital lending.

● On November 6, 2020, What’s-app started UPI payments service in India on receiving the National
Payments Corporation of India (NPCI) approval to ‘Go Live’ on UPI in a graded manner.

● In October 2020, HDFC Bank and Apollo Hospitals partnered to launch the ‘Healthy-life Programme’,
a holistic healthcare solution that makes healthy living accessible and affordable on Apollo’s digital
platform.

● In March 2020, State Bank of India (SBI), India’s largest lender, raised US$ 100 million in green
bonds through private placement.

3.5 SHOWCASE: -

10
 Total banking asset in India: -

PESTAL ANALYSIS: -

11
 Political Factors:
Although the banking industry appears to be very strong, it is vulnerable to a larger, more powerful entity: the
government. The financial situation industry is impacted by government regulations. The banking industry is
vulnerable to political influence since the government can get involved in its affairs at any time. This covers political
party corruption as well as certain legislative measures like labor regulations, trade restrictions, tariffs, and political
stability
Economic Factors:
The economy and the financial sector are intertwined. The amount of capital that banks may access depends on how
revenue flows, regardless of whether the economy is booming or barely surviving a recession. Consumers' spending
patterns and motivations influence the amount of money they borrow or spend at banks. Additionally, the bank faces
the backlash when inflation soars. Currency and its value are impacted by inflation, which also leads to instability.
When a country's currency is worth a lot, foreign investors are hesitant to contribute their money. Global banks are
also impacted by exchange rates; stable currencies, like the US dollar, have an effect on other currencies, consumer
behavior, and inflation rates abroad
Socio-cultural factors:

People's perceptions and usage of banking alternatives are influenced by cultural factors, including purchasing habits
and needs. For guidance and help with business, housing, and academic loans, people turn to banks. Customers ask
bank tellers for information about investments, credit cards linked to banks, savings accounts, and other topics.
Customers want their banking experiences to be smooth. Additionally, technology is evolving to make it easier for
customers to purchase goods without needing direct bank help.

Technological factors:
The way that customers manage their finances is evolving due to technology. To see accounts, transfer money, and
pay bills on smartphones, many banks provide a mobile app. Checks can be scanned by smartphones, and the bank can
process them locally. This modification reduces the need to drive straight to the branch to resolve these matters and
helps conserve paper. Debit cards are evolving as well. Due to the implementation of chips, consumers must now
insert their cards into debit machines instead of swiping them. Other nations, like Canada, have introduced a "tap"
option whereby a transaction can be completed by simply tapping the debit card into the device without the need for a
pin. The user may now make purchases more easily without banks having to interfere thanks to these modifications.

Environmental factors:

Paper is being used less frequently as a result of technology, especially mobile banking apps. Furthermore, there is
less need to drive straight to a branch to take care of business. Online banking services and smartphone apps address a
lot of problems. Customers can purchase checks online, apply for credit cards online, and get answers to many of their
banking inquiries over the phone or online. Consequently, lowering personal environmental impacts

Legal factors:
To help validate industry frameworks, the banking industry complies with stringent privacy, consumer, and trade
rules. These kinds of structures are necessary for both foreign users and clients in the designated country.

12
 4. COMPANY PROFIE

13
 COMPANY PROFILE
Among the earliest Indian financial firms to receive "in principle" approval from the Reserve Bank of India (RBI) to
establish a private sector bank was Housing Development Finance Corporation Limited, or HDFC. This was done
as part of the RBI's deregulation plan for the Indian banking industry in 1994.
HDFC Bank was founded in August 1994 as HDFC Bank Limited, and its registered office is in Mumbai, India. In
January 1995, the bank became a Scheduled Commercial Bank and began operations.
On April 4, 2022, the biggest home financing firm in India, HDFC Limited, and the country's largest private sector
bank, HDFC Bank, announced their merger. HDFC Ltd., a prominent player in the home finance sector, has
developed one of the best product lines in the last forty-five years. As part of its wide range of products, HDFC
Bank facilitates the seamless delivery of home loans to rural, semi-urban, and urban areas of India.

By May 31, 2024, the Bank's distribution network consisted of 8,778 branches and 21,132 ATMs located in 3,836
cities and towns.

Company: HDFC.
CEO: Sashidhar Jagdishan.
Founder: HT Parekh.
Year founded: 1994.
Headquarter: Mumbai, India.
Employees (2023): 173,222.
Type: Public.
Ticker Symbol: HDFC BANK.
Annual Revenue (Mar 2023): 1,13,000 Crore Rupees.
Profit | Net income (Mar 2023):44,108 Crore Rupees

14
 4.1.1 History: -

HDFC Bank, a subsidiary of the Housing Development Finance Corporation, was founded in 1994 and is
headquartered in Mumbai, Maharashtra, India. Manmohan Singh, the Union Finance Minister at the time,
inaugurated the company's first full-service branch and corporate headquarters at Sandoz House in Worli.
According of March 31, 2023, the bank had 7,821 branches in 3,203 cities. 12 million credit cards, 23,570,000
debit cards, and 430,000 point-of-sale terminals were issued in FY 2017. As of June 30, 2022, 1,52,511

permanent employees work there.

4.1.2 Registered Address of the company: -

Address/location: - HDFC Bank Thermax chowk, Chinchwad, Pune 411044.

 Board composition:
The composition of the Bank's Board of Directors is governed by the provisions of the Companies Act, 2013,
the Banking Regulation Act, 1949, pertinent Reserve Bank of India rules, guidelines, and circulars, as well as
the listing requirements of the Indian Stock Exchanges where the Bank's securities are listed. The following
individuals comprise the Board:

15
 4.1.3 A statement of vision and mission Company
 MISSION

• Top-Rated Indian Bank

Comparing benchmarking to global norms.

To establish reliable client franchises in many industries

Best practices for service levels, technology, risk management, audits, and compliance as well as
product offers

 A explanation of statement of vision

Maintaining the highest standards of ethical conduct, professional integrity, and regulatory compliance is a
priority for HDFC Bank. The following four tenets comprise HDFC Bank's business philosophy:

1.Operational excellence.

2. Focus on the consumer.

3.Product leadership

4.pepole

In order to give its target market consumers a one-stop shop for all of their needs, HDFC Bank aims to
offer a comprehensive variety of banking services and financial products. Customers who are looking
for specific financial solutions, information, and guidance on different investment routes have been
taken into consideration when designing the HDFC Bank Plus and investment advisory services
programs.

The objective of HDFC Bank is to provide its target market customers with a wide range of financial products and
banking services so they can meet all of their needs in one place. Clients seeking particular financial solutions,
information, and help on various investment routes were the focus of the development of the HDFC Bank Plus
and investment advisory services programs.

16
 4.2 THREE COMPARATIONS
Concerning HDFC Businesses:
HDFC Bank offers a broad variety of banking services, including branch and international banking for
individual customers and commercial and investment banking for wholesale customers. Three main
business segments comprise the bank:

Retail banking services, wholesale banking, and treasury

1) Wholesale Banking: -
Large, well-known manufacturing firms in the corporate sector of India make up the majority of the The
target market for the bank consists of agribusinesses and small and mid-sized companies.
smaller portion. The Bank offers a broad range of commercial and international banking services to these
clients, such as cash management, trade services, working capital financing, and transnational services.
The bank is also a leading provider of structured solutions that combine cash management services with
distributor and vendor finance to help its corporate clients manage their supply chains more effectively.
The Bank's outstanding product delivery and service standards, together with its strong customer focus,
have allowed it to make significant inroads into the banking consortia of numerous notable Indian
corporates, including international corporations, local business houses, and top public sector
organizations. It is recognized as one of the leading providers of cash management and international
banking services to corporations, mutual funds, banks, and stock exchange members.

2) Treasury: -

The bank offers three primary product categories within this business: Equities, Local The
Money Market for Currency & Debt Securities as well as derivatives and foreign exchange.
Corporates now require more advanced risk management information, guidance, and
product structures as a result of India's financial markets becoming more liberalized. The
bank's Treasury division offers these as well as competitive prices on a range of treasury
products. The bank must keep 25% of its deposits in government securities in order to meet
the statutory reserve requirements. The Treasury company is in charge of overseeing this
investment portfolio's returns and market risk. In addition to managing the Bank's securities
and other market investments instruments, the Treasury is the custodian of its cash and
liquid assets. Along with meeting statutory reserve requirements, it oversees the
management about interest rates and liquidity risks on the sheet of accounts.

17
3) Banking at Retail:

The retail bank seeks to provide a wide range of banking services and financial products to its target market
customers, making it a one-stop shop for all of their banking requirements. Non-resident Indians (NRIs), individuals,
salaried professionals, and micro and small businesses like as Kirana shops are all served by HDFC Bank's retail
division. In order to appeal to its target demographic, the Bank tailors its offerings. It has a strong presence in the
personal loan and vehicle loan markets and a leading position in the payments business. Furthermore, the bank offers
wealth management services to high net worth individuals (HNI).

18
 4.4 The HDFC Bank's Technology

Every industry has experienced intense rivalry from its competitors in the age of globalization. Additionally,
the world has transformed into the globe's plane. An increasing number of adjustments are being implemented
after the liberalization strategy and the RBI's efforts to work with private sector banks. Additionally, there is
competition between both governmental and private banks sectors.

The newest technology is employed by private sector banks nowadays for a range of routine banking
operations. As is well known, information technology is necessary to all sectors about the economy
and provides the best possible performance for scarce resources. Banks are service-oriented businesses, and IT
now helps the banking sector implement cutting-edge technologies. As the industry leader HDFC BANK has
had tremendous success today. New technology has changed the perceptions of customers and the concept of
the backlog of bank transaction history. These days, there are many different ways to conduct financial
transactions.

19
 4.2 SWOT ANALYSIS
One effective way to identify your strengths and weaknesses and the opportunities and
threats for you is the SWOT analysis. A SWOT analysis is a tool that can help you
decide what your business does well at the moment and in developing a winning plan for
the future.
SWOT ANALYSIS OF HDFC BANK

STRENGTH

• High customer satisfaction rating

• Good place to work
• Strong presence in retail banking

WEAKNESSES

• Underperform in some sectors

• Weak international presence
• Restrained marketing approach

OPPORTUNITIES

• Good opportunities in foreign markets

• Leverage growing corporate banking
• Digital opportunities

THREATS

• New-age banking
• Restricted growth
• Increasing competition

20
 5.OBJECTIVES

21
 OBJECTIVES OF THE STUDY

To study the credit analysis is to look at the borrower and the facility being proposed and to assign a risk rating

To study the loan policy of bank

To study the credit appraisal

To study the documents required for loan and advances

To study about personal loan disbursement by HDFC bank

22
 6.THEORETICAL FRAMEWORK

23
 THEORETICAL FRAMEWORK
6.1 Meaning of loan: -
A bank can grant credit to a borrower for a specified period of time and for a specified purpose by issuing a loan. Loans must
be repaid over a lengthy period of time and will, thus, remain liabilities for a significant amount of time since they represent
promises for future payments.
Therefore, "when a banker makes an advance in a lump-sum which cannot paid wholly or partly and which the customer has
permission to withdraw subsequently, it is called a loan" .
To get cash for non-respective activities or fixed assets, borrowers sometimes ask the bank for a lump sum withdrawal. The
loan sum is usually repaid in installments. It is feasible to obtain short-, medium-and long term loan

There are two types of loans and advances: secured and unsecured.

• Safe Loans and Advances

A secured loan or advance is an advance or loan that is backed by assets. It always has a higher market value than
the loan or advance amount.

• Advances & Unsecured Loans

A An "not so secured" loan or advance is known as an unsecured loan or advance. A partly covered advance or
loan is one that is partially backed by assets whose market value is lower than the amount borrowed or outstanding
at any particular time.

24
 What is personal loaon
A loan or advance that is "not so secured" is referred to as an unsecured loan or advance. An advance or loan
that is partially covered by assets whose market worth is less than the amount lent or outstanding at any
given moment is known as a partially covered advance or loan.
Additionally, no inquiries about the loan's intended use are asked because personal loans don't require any security
and, even in the case of imaginary assets, its interest rate is higher than that of other secured loans.
Personal loans can be secured with little paperwork and don't require any security or collateral. The most
popular loan account type offered by HDFC Bank is the personal loan, which is flexible enough to be used
for any declared legal purpose without requiring security pledges, including the purchase of consumer
durables and assets, tax-saving investments, higher education, home improvements, vacations, travel,
emergencies, medical needs, and family marriage.

No collateral or security is needed for personal loans, which may be obtained with minimal documentation. The most
popular loan account type provided by HDFC Bank is the personal loan, which is adaptable enough to be used for any
declared legal purpose without requiring security pledges. These include buying consumer durables and assets,
investing to save money, going to college, improving one's home, taking a vacation, traveling, dealing with
emergencies, getting medical attention, and getting married as a family.

25
6.1 How can one select the ideal personal loan?

Selecting the personal loan that best meets your needs is influenced by a number of variables. Considerations like as timing,
urgency, and repayment capacity are crucial.

The distribution timing coincides with the loan approval time. A personal loan can be used to raise money quickly, especially in
an emergency. HDFC Bank offers a 10-second personal loan to pre-approved clients. clients who are not HDFC Bank clients
may have to wait up to four hours.

The amount, duration, and payment of your loan all affect your EMI.
A person's ideal loan will rely on a number of aspects, such as simple EMIs, flexibility in the loan's tenure, and receiving the
right amount. EMI repayments are reasonable, beginning at Rs. 2149.

The interest rate and administrative fee influence the total cost of the loan. Think about these factors before choosing a
loan. HDFC Bank offers very competitive interest rates, low processing fees, and simple-to-pay EMIs.

26
 The total cost of the loan is defined by the interest rate and administration fee. Pay attention
to these factors before choosing a loan. HDFC Bank offers highly competitive interest rates along with processing
fees that are low on easy to pay EMI.

.4 What is the purpose of a personal loan?

A personal loan can be utilized in a number of ways:

A] It can be used to pay for further schooling. and obtain interest payment tax advantages.

B] Getting married is usually a costly affair. You can use a personal loan to repay it.
C] You can utilize it to purchase the newest, most technologically advanced phone or laptop.
D] Do you intend to purchase a home? Or do you intend to make renovations to your present residence?
With the first tax advantages, you may make it happen with a personal loan.
E] You don't need to spend all your savings on the vacation trip of your dreams. You can finance your trips with a
personal travel loan
F}A modest personal loan can also help with cash flow issues, so you don't have to forgo necessities in times of
financial hardship.

27
 6.1 How to get personal loan in 5 easy steps
Personal loans are usually without any collateral or security and can have negotiable terms of repayment. The procedure for
applying to get a personal loan is five-step-long. We cover everything from the paper work required to how to apply for a
personal loan:

Step 1: Determine your requirement

Determine what you need a personal loan for and how much. For example, you might need a loan to renovate your house or to
pay for your wedding. You can also need only Rs. 1 lac or Rs. 10 lacs.
Step 2: Loan eligibility
After deciding your need, you need to decide how much you can get. For calculation of how much as personal loan you can
borrow, you can check out the HDFC Bank Personal Loan Eligibility Calculator online. HDFC Bank provides loans from Rs.
40 lacs.
Step 3: Calculate the monthly installments
Determine your approximate monthly loan installments using an online EMI calculator. Using the HDFC Bank Personal Loan
EMI calculator you will be able to vary the interest rate and tenure according to your monthly income. All personal loans
offered by HDFC Bank have affordable EMIs starting from Rs. 1878 per lac * (T&C).
Step 4: Visit the bank
Application for a personal loan in HDFC Bank can be done in several ways: using an ATM, in-person by visiting the branch,
online at the HDFC Bank website, or through Net-banking.
Step 5: Submission of documents
Then, find out what documentary requirements are in place for a personal loan. Some banks may ask for the usual evidence of
address, evidence of ID, and proof of income such as bank statements, pay stubs, or IT returns. Simply submit copies of the
personal loan documentation at the bank.
Then wait for the funds transfer to your account. Loans pre-approved by HDFC Bank customers get their money in 10
seconds. Non-HDFC Bank customers get the money in 4 hours.

28
 6.6 Top-Up Personal Loan from HDFC Bank

6.6 HDFC Bank Personal Loan Top-Up

With HDFC Bank Personal Loan Top-Up, dream can be added extra. Low-interest rate and nominal processing charges make the
top-up loan preferable over a personal loan. The documents are also minimal for the loan application since the borrower already
has a relationship with the bank.
Features of HDFC Bank Personal Loan Top-Up:

 The borrower can avail of an easy and hassle-free process of documentation as he/she has a prior relationship with
HDFC Bank.
 A borrower can get a maximum Top Up Loan of Rs.50 lakh.
 HDFC Bank Personal Loan Top-Up comes with attractive interest rates.
 Simplicity in repayment by way of monthly installment.
 Widening of branch networks so, a borrower can avail HDFC Bank services from any corner of India.

29
 6.1 . There are seven criteria that decide whether your loan is approved.

Loans are no longer viewed as a final option for purchasing a desired smartphone or a
home of one's dreams. People have been less reluctant to ask for loans during the past ten
or so years, whether they are for homes, cars, education, businesses, or personal use,
particularly when they do not have a sizable sum of money available. Additionally, home
and education loans offer tax benefits that lower tax obligations and boost available funds
from salary income.
The fact that banks are making it simpler for clients and potential borrowers to obtain
loans with competitive interest rates, fast eligibility checks, and less paperwork is also
beneficial. An online application and document submission channel has been made
available for the approval procedure. If the loan application and evaluation procedure is
still available to you
• Credit history:

Based on the loan settlement tendencies in the past, credit history says that you are going to
repay in the future. The bank gets an idea of whether you're going to stick by your date and
make timely payments. The more delay, lower your score is going to be. They will check on
default and delay previously.
Not having a credit history isn't helpful because there is no premises to evaluate, such not
having taken out a loan or credit card within the past two years. You may deal with this,
though, by continuing to use your credit card without experiencing any repayment defaults.
Between 700 to 800 points, the profile is rated to be good. This means that, as a low-
risk applicant with a spotless record and no repayment defaults, you
are most likely to get priority. However, if your credit score runs below
300, chances are pretty strong that your
application might get rejected. Banks seek information from special bureaus like CIBIL about
your creditworthiness, essentially about your credit rating
• Work experience:
•Your employment history and current involvement are taken into account by banks to ensure your source of income
is dependable. A bank needs to be assured that your company is financially sound with no past history of unpaid
or delayed salaries to the employees. How stable your job is should also be considered. Government jobs thus
have the additional advantage of being perceived as safe, as compared to self-employment or little-known private
enterprises.
Above all, working for a reputable organization, such as a blue-chip business, will increase your chances of success.
Professionals such as physicians, certified public accountants, engineers, and lawyers are also considered to be
safe.
•\Because your ability to repay the loan is based on income, its source should therefore be stable and reliable.
Since stability is what consistency brings, banks prefer applicants who have spent more time in their current job.

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 • Age:

• Your age is important because it represents the stability of your finances. You start working in your 20s, and you'd
have five or six years of work experience by the time you are thirty. You are now financially secured and earn more
money as you are climbing the corporate ladder. You will have fewer working years to pay back your loans as you
advance over the course of the following 20 to 30 years. An application for a loan during retirement years is usually
refused.

• Income

Your income reflects the repayment possibility, as mentioned earlier.

Banks assess the ability of making money for you, depending upon your source, duration, dependents,
and current debt commitments. Among the numerous things in this scenario is that the amount left over
after EMI payments in the bank checks is sufficient. If it is proven that the above lacks this, then the
bank presumes you're burdened to a huge extent and so prone to defaults. The bank
will consider you to be financially sound, however, if the ratio is five times or higher. Similarly,
a majority of banks would prefer applicants who have already filed their IT returns and paid taxes
over the others who may have done so with no tax liability for the very reason that their income
was exempted from taxes.

• Repayment:
If you choose a shorter repayment period, your chances of getting the loan accepted are high. There are
several banks, which preferred applications with repayment terms up to five years. As the repayment
duration increases in five-year slabs of 10, 15, 20, and 25 years, the score decreases. Therefore, the key
to getting a bank to approve a loan is to keep it brief.

• Margin money:
Generally speaking, banks are willing to provide up to 80% of the loan's cost of purpose and expect that
the borrower would make the remaining arrangements. The bank will not stop you, however, if you can
contribute more than 10% to 20%. Instead, it will acknowledge your willingness to lessen the bank's
default risk exposure and grant your application more quickly. Your ability to make a down payment
will have a huge impact on your likelihood of being approved for a business, house, education, or auto
loan.

Aside from these seven super variables, it is also essential that you have a good relationship with the
bank. The longer that you have been a customer, the more likely you are to be approved for a loan-if
your record is clean, that is. Knowing about financial history will let the bank assess your current
financial health. Apart from eligibility checking, you can also apply and share documents online with
some institutes, like HDFC Bank, in just a few clicks. Also, ten seconds are there for loan disbursement
to a limited number of pre-approved HDFC Bank customers.
 6.3 Causes of the drop in personal loans from HDFC Bank

Although the six general grounds for a personal loan rejection differ from one lender to another, each has its own
internal criteria for assessing risk and creditworthiness.
•\tBad credit score
•\tUnstable employment
•\tIncome not being adequate
•\tWorking in a delisted private company
•\tDoes not come within the age bracket
• Resident of a high default area
 the Effect of HDFC Bank Personal Loan Rejection on Credit Score.

This depends on the level at which your personal loan application is being processed. After
ascertaining their eligibility, the borrower usually submits his/her papers and applies for a
personal loan. The HDFC Bank personal loan may be disapproved if the required documents
are hard to obtain. If all your documents are validated, the lenders will check your credit score
to ascertain your creditworthiness. We call it a "hard inquiry." In the worst of circumstances,
the hard inquiry will have little impact on your credit score if your credit score is below
average and the personal loan is rejected.
It follows that the credit score will undoubtedly suffer if you are subjected to several harsh
inquiries.

➢ Verification Procedure for Personal Loans at HDFC Bank

The answer to this question will depend on the stage of processing your personal loan application. The borrower often
provides their documentation and applies for a personal loan after their eligibility has been confirmed. If the required
documentation is difficult to produce, the HDFC Bank personal loan may be rejected. If all of your documentation has
been verified, the lenders will look at your credit score to assess your creditworthiness. It is what we call "hard
inquiry." In the worst case scenario, if your credit score is low and the personal loan is declined, the hard inquiry will
only slightly affect your credit score.
Therefore, if you are the target of several severe inquiries, your credit score will surely decrease.
 6.10 Fees incurred both before and following the personal loan.:-
Interest Rate 10.75% to 24.00% (Fixed Rate).

Processing Fees Up to 6,500/-

Tenure 03 Months to 72 Months.

Documents Needed No Pre-approved Personal Loan Documents

For non-pre-approved, the most recent two months' worth of
bank statements
Salary Slip and KYC.

6.11.1Company categories income wise tenure and eligibility amount

1.Super CAT A

Tenor >=25k-<35k >=35k-<50k >=50k-<70k >=75k

12 5 6 7 7
24 10 10 13 13
30 14 18 18 18
48 16 20 23 23
60 19 22 25 27

2. CAT A

Tenor >=25k-<35k >=35k-<50k >=50k-<70k >=75k

12 5 6 7 7
24 10 10 13 13
30 14 16 18 18
48 16 18 21 22
60 19 20 23 24
 3. CAT B

4. CAT C

5.CAT D

6.GOVERNMENT (GA/GB/GC)
6.11.2 What IS FOIR?
FOIR (Fixed Obligation to Income Ratio) is a key financial metric used by HDFC Bank (and other
financial institutions) to assess a loan applicant's repayment ability. It is the ratio of an individual’s
fixed monthly obligations (such as existing loan EMIs, rent, and other recurring commitments) to
their net monthly income. The average FOIR for a credible borrower is between 40 % to 55 % and
may vary for high-net worth borrower .
If the applicant has a lower FOIR, the applicant has less financial obligation than his monthly income.
This means he is a large chunk of disposable income with him and is capable enough to repay Loan EMI.
In such a case, the chances of loan approval are higher.
In contrast, a higher FOIR reflects that the candidate is heavy in debt and may not having enough
available funds to repay the loan. A greater FOIR reduces the borrower's creditworthiness and
increases the likelihood that the loan application will be denied.

FOIR Calculation: -

For example: -
Salary – 1,30,000
Company – CAT B
How much is the loan given to the
customer? Calculation: -
1,30,000 – 30,000 = 1,00,000
1,00,000*70% = 70,000 per month EMI for 60 months
Maximum 35,00,000 loan give to customer.
6.12CONCEPT OF CREDIT
6.12.1. Phases of the process of credit analysis
A traditional credit analysis requires a strict procedure that involves three key steps: obtaining
information, a detailed study of this data and decision-making.

1. Information gathering: -

The very first step towards credit analysis is collecting every possible information about the
applicant. The character, the reputation of the person, financial stability, credit history, ability
to repay debt, the actual purpose of seeking debt etc. If the loan is for a project, then the loan
officer must understand the objective of the project, financial feasibility of the project,
importance of the project as compared to others, the cash burn in it and mainly the amount of
loan that can be reasonably disbursed for the loan. Many times, banks do it through their
special third-party inspection agencies which carry out the inspection on the field on behalf of
the bank. Based on the risk associated with the profile as depicted by the agency, the bank
decides whether to move forward with the proposal or not.

2. Information analysis: -
To ascertain whether the information is authentic and truthful, it is evaluated. This stage
begins with the verification of documents such as ID, passport, business licenses, among
others. To determine the borrower's financial situation, the credit analyst also examines
historical financial data, including cash flow, balance sheets, financial statements, and more. In
order to assess the borrowers' ability to successfully execute the project, the bank also takes
into account their background and credentials. The project's efficacy is another factor that the
lender takes into account.
The lender's credit lines will be readily secured by a successful project. The drawback is that if
a project is declining or faces fierce competition from other organizations, the bank could be
hesitant to give credit because there is a significant chance of suffering losses in the case of
insolvency. But If the bank determines that the borrower's risk tolerance is appropriate, it can

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 3.Decision making stage -
The decision-making phase is the last step in the credit analysis process.Once the analyst has
collected and verified the information, he identifies the risk and sends his recommendation, be
it positive or negative, to a credit committee that will make the final decision. If the borrower's
assigned credit analyst is persuaded that the difficulty in repaying the credit,
He will present a recommendation report on the review's findings to the credit committee.
But in the event that the credit investigation indicates that the borrower's risk level is too high to
be met by the lender, he ought to furnish the credit committee with a report that outlines the
borrower's outcomes for creditworthiness. The final decision is reserved by the committee or
nother suitable authorized authority. decision about the loan's acceptance or rejection

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 6.12.2 Flow chart of credit analysis of personal loan of Hdfc bank: -
credit analysis of a personal loan for HDFC Bank typically involves understanding the steps taken by
the bank during the loan approval process. While the exact process may vary slightly, the general flow
of credit analysis involves the following stages: -

Loan Application
Submission

Document Verification

Credit Score Check

Income and Employment

Verification

Debt-to-Income Ratio Assessment

Loan Eligibility Calculation

Risk Assessment

Approval/Rejection Decision

Loan Offer and Terms

Loan Disbursement

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 6.12.3 REASONS OF CREDIT ANALYSIS
• Unfortunately, credit fraud is a growing serious problem, and its rate of
occurrence has
Almost tripled over the past five years. Under the more common scam
called "identity
theft" the crook opens a credit-card or other-type-of-account in someone else's name.
The
A criminal purchases goods and services, and suddenly you stumble across the
account.
These are not connected with each other: credit card fraud and credit analysis.

• Credit card fraud has no association with credit analysis.

• The Lender/borrower sometime may refer wrong details on a personal loan

Details. Ability to repay the loan, reasons for requesting the loan.
Therefore, to correct all this fraudulent activity, a credit analysis ought to be done, to
Confirm the creditworthiness of the drawdown lender who will repay the
loan together with interest.

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 Case Study
1) Customers need 15 lakh loan
amount Salary: - 1.15 lakh
Company: - force motors (cat A)
Loan eligibility: -max 30 lakhs
other obligations: - 8 lakh
Loan amount 15 lakh approved rate of interest 10.50% tenure 60 months within 2 days
and amount disbursed

2) customers need 6 lakh loan

amount Salary: - 38000
Company: - LLP company (cat C)
Loan eligibility: - 400000
Other obligation: - 300000
Loan amount 4 lakh approved rate of interest 12.50% tenure 36 months
But customers need 6 lakhs amount due to other obligation customer loan eligibility amount is 4
lakhs Within 5 days loan approved and amount disbursed

3)customers need 5 lakh loan

amount Salary: - 43000
Company: - (cat B)
Loan eligibility: - - - 10
lakh other obligation: - 3
lakh
Case rejected because of earlier loan multiple bounces and civil not ok so that’s why loan rejected.

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 4) customers need 3 lakh loan
amount Salary: - 27000
Company: - (cat b)
Loan eligibility: - 4 lakh
Total obligation: - 2 lakh
So, eligibility amounts 2 lakh and adding 2-year bonus, so eligibility amount 2.50
lakh Case approved 2.50 lakh rate of interest 16% tenure 36 month
Customers do not disbursed amount because of rate of interest very high.

5) customers need 4 lakh

amounts Customers have 10 sec
offers
Its avail on net banking click on offers and compete process and amount disbursed in 10 sec
Customer disbursed amount 4 lakh rate of interest 12.50% tenure 48 months.

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 Comparison of Personal Loan Interest Rate of Private Banks:

● Best interest rates: IndusInd Bank offers the lowest smallest rate at 10.25%, while SBI Bank
provides competitive mid-range rates.
● Highest potential cost: IDFC Bank has the highest maximum interest rate at 36%.
● Processing fees: SBI Bank charges the lowest fee (up to 1.50%), while IndusInd and IDFC charge the
highest (up to 3.5%).

Borrowers should consider both the interest rate and processing fees when comparing personal loan offers.

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 8.FINDINGS, CONCLUSIONS AND
SUGGESTIONS

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 FINDINGS
• Majority of customers are aware of the different products and services provided by
HDFC bank.
• Most of the customers are satisfied with the overall service of the bank, but there is a
minority of customers who are still looking for improvement.
• Some of the customers are not satisfied with the interest rate charged by HDFC bank.
For more profit the company must try to provide a minimum rate of interest.
• There are different types of customers visiting the bank to get their loan disburse,
the majority of 60% preferred personal loans and other 40% people preferred home
loan and auto loan.
• There are various factors which affect personal interest rates. Some of them are:

•Applicant’s income
•Loan repayment tenure
•Credit history
•Credit score
• To avail yourself of the cheapest rate of interest one must-

•I must improve my credit scores

•Avoid missing payments
•Maintain a good credit history

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 CONCLUSION

The Housing Development Finance Corporation Limited or HDFC was among the first
financial institutions in India to receive an “in principle” approval from the Reserve Bank of
India (RBI) to set up a bank in the private sector. Based on the summer internship carried this
project report highlights the details about credit appraisal and disbursement process of personal
loan in HDFC bank, FOIR calculations, analysis of documents needed for loan process and
company categories income wise tenure and eligibility amount in personal loan of HDFC bank.

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 SUGGESTION

1. To enable more individuals to apply for the urgent loan for unanticipated calamities, the
current 10-day processing time must be shortened to nine days.
2. Arrange for regular marketing events, such sheds and corporate visits, to inform more and
more people about the "Personal loan" options that are depending on their salaries.
3. A more extensive plan with several features is offered by HDFC Bank at the present salary.

4. Clear, comprehensive instructions on the product that include the most recent modifications
and executive performance attributes.

5. Interest rates are being liberalized for each client according to his income and business
profile.

6. To help the consumer comprehend the loan financing procedure, it should be made simpler.

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 KEY LEARNINGS

LEARNING FROM THE PROJECT:

• Learnt to maintain long-term relationships with the customers by providing the best
service.
• Learned how to generate leads, how to take follow up and convert the leads.
• Learned about the procedure of personal loan products and how it is executed.
• Analysis of documentation needed for personal loan, eligibility criteria for different
kinds of customers as per company category and salary.
• Learn how to calculate EMI as per loan amount and tenure and to calculate
FOIR calculation as per other obligations.
DOMAIN LEARNING
• How to interact with customers
• Help me in enhancing my communications skills
• Customers negotiating power

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 BIBLIOGRAPHY

https://www.ibef.org/industry

https://www.hdfcbank.com/

https://www.hdfcbank.com/personal/borrow/popular-loans/personal- loan?
LGCode=MKTG&mc_id=website_footer&icid=website_footer

I also preferred earlier research paper and sample project.

 Daily notes
 Weekly reports

 Mr. Pranit kumar sir SM of personal department.

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