Authors: Mukesh Surendra Yadav, Abhijeet Bharati
Abstract: Housing is a fundamental human necessity and a key determinant of an individual’s economic stability and social status. In rapidly developing urban centers like Pune, the demand for residential properties has increased significantly due to factors such as population growth, urbanization, industrial expansion, and the rise of the information technology sector. However, escalating property prices have made home ownership increasingly difficult for many individuals, particularly middle-income groups. In this context, housing finance, especially in the form of bank-provided home loans, has emerged as a critical facilitator enabling individuals to fulfill their aspiration of owning a home. This study examines the role of housing loans in influencing home buying decisions in Pune city. It explores various factors that affect borrowers’ preferences, including interest rates, loan tenure, repayment capacity, processing procedures, and financial awareness. The research is based on primary data collected through structured questionnaires distributed among prospective and existing home loan borrowers in Pune. Secondary data has also been utilized from journals, reports, and banking publications to provide a comprehensive understanding of the housing finance sector. The findings of the study indicate that interest rates and EMI affordability are the most significant factors influencing loan selection among borrowers. Flexible repayment options and longer loan tenures are also preferred, as they reduce the financial burden on individuals. Additionally, the study reveals that awareness about loan schemes, government subsidies, and tax benefits plays an important role in decision-making. However, complexities in documentation and processing delays remain key challenges faced by borrowers. The study further highlights that housing loans not only support individual home ownership but also contribute to economic development by boosting the real estate sector, generating employment, and encouraging investment. Banks and financial institutions play a vital role in this process by designing customer-friendly loan products and maintaining competitive interest rates. In conclusion, housing finance has become an indispensable tool in addressing the growing housing demand in urban areas like Pune. While it has significantly improved access to home ownership, there is a need for simplifying loan procedures, enhancing financial literacy, and introducing more affordable loan schemes to cater to diverse income groups. The study provides valuable insights for policymakers, financial institutions, and researchers to improve the effectiveness of housing loan systems and promote inclusive growth in the housing sector.
DOI: https://doi.org/10.5281/zenodo.19882905
