Home Loan Customers’ Income Effect on Fluctuating Rate of Interest – A Perceptual Study

Government of India and financial institutions are continuously trying to strengthen the housing sector by introducing various housing loan schemes for rural and urban population. The present study examines the perception of home loan customers with fluctuating interest rate on their borrowing. The study covers two hundreds responses of home loan customers of major financial institutions and banks in Dewas city of Madhya Pradesh. Perception of home loan customers were analyzed on the basis of amount of loan borrowed and categorized in five groups (up to1 lac; 1–3 lac; 3–5 lac; 5–10 lac and above 10 lac). The empirical research tries to find out that whether there any significant difference exist in perception of home loan customers for variables such as interest rate charges by lending banks. inflation and other economic condition Government's responsibility, standard of living, savings and investment planning, household expenses, future purchase planning, prepayment of home loans, tenure of repayment, shifting of home loan to other banks, selling home for payment of loan, Suggestion to friends and relatives for taking home loan.

Statistical tools such as mean, standard deviation and F-test (ANOVA) were used for data analysis. This study is an attempt to provide information that will help in formulation of realistic rate of interest by banks and financial institutions for various categories of home loan customers.