Exploring Borrowers' Experiences: A Comparative Study Of Home Loan Challenges Between HDFCL And LICHFL

Abstract

This research paper presents a comparative analysis of housing finance services provided by LIC Housing Finance Limited (LICHFL) and HDFC Ltd (HDFCL) in the coastal districts of Andhra Pradesh, India. Housing finance plays a vital role in India's socio-economic landscape, particularly in regions like Andhra Pradesh where unique geographical and economic factors present both challenges and opportunities. The study aims to evaluate the operational performance, customer satisfaction levels, and challenges encountered by these institutions in delivering housing finance services to diverse socio-economic segments within the coastal districts.

The research employs a mixed-method approach, combining secondary data analysis with primary data collection through structured surveys. A total of 374 borrowers from LICHFL and HDFCL were surveyed to gauge their awareness, perception, and satisfaction with housing finance services. Statistical tools such as chi-square tests and cross-tabulation were utilized to analyze the data and identify significant patterns and differences between the two institutions. Key findings from the study reveal insights into borrower demographics, loan specifics, level of understanding, and perception regarding housing finance services. The analysis highlights that a majority of borrowers fall within the middle-aged demographic, with a preference for post-graduate education and stable employment in government or private sectors. Borrowers primarily seek loans for property purchase or construction, with most opting for repayment tenures ranging between 16 to 20 years.

The study indicates a high level of awareness among borrowers regarding housing finance aspects, including processing fees, interest rates, and loan features. However, differences in perception between HDFCL and LICHFL borrowers were observed, particularly concerning interest rates, processing costs, and documentation requirements. Despite variations, borrowers generally hold positive perceptions of both institutions, with LICHFL borrowers expressing slightly higher satisfaction levels compared to HDFCL borrowers. Challenges faced by borrowers include excessive formalities, delays in loan disbursement, unexpected increases in Equated Monthly Installments (EMI), and minor issues related to processing fees and interest rates. HDFCL borrowers tend to encounter more significant challenges than LICHFL borrowers, particularly regarding higher interest rates and processing fee charges.

Overall, the research contributes to a deeper understanding of the housing finance sector's role in Andhra Pradesh's coastal districts and provides insights for policymakers and financial institutions to enhance service delivery and address the needs of diverse borrower segments.