Factors affecting loan purchasing decision Of customers in Kathmandu valley

Abstract

ABSTRACT When it comes to lending requirements, banks and other financial institutions have traditionally placed a high priority on the needs of their clients. The goal of the current study, "Factors Affecting Loan Purchasing Decision of Customers in Kathmandu Valley," was to pinpoint the important variables that consumers take into account when applying for loans from banks and other financial organizations. A thorough review of the literature was done, during which the ideas behind different loan kinds, the motivations behind loan requests, and the connection between independent variables that is, factors influencing consume were examined and discussed. A survey was conducted for this research in order to ascertain out the connection between the independent and dependent variables. The quality of service rendered by BFIs (SQ), customer satisfaction with BFIs' services (SA), various loan covenants (LC), the loan's installment structure (LI), the requirement for an insurance coverage (IG), and the interest rate on the loan (IR) are among the independent variables that were taken into consideration. The client s choice to purchase a loan was the dependent variable. The outcomes of the study demonstrated a substantial relationship between a numbers of variables, including service quality, loan interest rates, and loan installments. However, no significant connection was discovered between customer satisfaction, loan covenants, or the loan's insurance and guarantee conditions. Thus, research indicates that all of these acknowledged criteria have a reciprocal impact on loan purchase selections. The domains encompass product development that truly fulfills customer needs and demands, customer behavioral changes brought about by increased competition in the financial sector, and a primary focus on service quality and customer-centric business practices. Keywords: Service Quality, Satisfaction, Loan Covenant, Insurance/ Guarantee, Loan Installment, and Interest Rate.