NOC After Closing Your Home Loan

Importance NOC After Closing Your Home Loan

You need to have a NOC from the bank after you have cleared the bank loan. You have to write an application for NOC from the bank. If your lender is HDFC Bank, you should have an HDFC bank NOC letter online that will help you apply for the NOC.

Importance of NOC after clearing your bank loan

You have to take a home loan to fulfill your dream of owning your home. You’ve got to apply to a bank or a housing finance company for a loan to buy your home. They will approve your home loan application after a due verification process. You may have to produce relevant documents and proofs to satisfy the requirement of the bank. Upon completion of your repayment of the loan for the home, you are supposed to get a NOC from the lender. It is very important. If you don’t get it, you will be in trouble. You should understand why it is so important.

What is NOC?

NOC is No Objection Certificate. When you’ve paid off all your loan amount, you get it from the lender. Your home loan means the principal amount, the interest, and the EMIs. There should not be any dues outstanding. The lender will issue the NOC containing your name, address of the property, your name mentioned as the owner of the property, and the loan account number. It also contains the date of the loan closure. This letter contains a statement that the lender has no further legal rights on the property. In other words, it’s a transfer of property rights from the lender to the person who had taken the loan. Conventionally, the lender should mail the NOC to the address listed in the loan application document. You will do well if you check for the fact that the NOC is in place and it contains all the required information. In case you have changed your present address, you should inform the same to the lender. You can personally meet them also to take the NOC by hand.

 A NOC is a legal document that is going to be verified by any future lender to you. There are reasons why you should get the NOC from the lender.

It helps you get back all your documents in the security of the lender. You have to furnish many financial papers with the lender while taking the loan. These are the property documents, gold, or other valuables as collateral security. The home loan closure document along with NOC will allow you to claim all those documents and valuables in the custody of the lender.  

From the perspective of the CIBIL score, a loan closing document with a NOC is crucial. Your future lenders will ask you to produce your credit score that shows your creditworthiness. You will submit the NOC with the CIBIL to certify that you are creditworthy. It will help you to easily get another loan in the future from a lender. The future lender will be confirmed of your creditworthiness based on your NOC. This document is proof that you have repaid your loan in full and there is no outstanding due against you. You will be a creditworthy person for the lenders in the future.  

You must not forget to get the NOC document from the lender after you’ve cleared all your dues including the loan amount. It will help you overcome any future problems regarding a loan that you might need to take.  

A NOC helps remove any lien on your property. It improves your credit history and credit score. As it has been said before, you can get another loan in the future without hassle provided you have the NOC for your past loan. You can sell your property easily and you may get the insurance claims also.

A NOC is a legal document issued by the lenders or a bank stating there are no outstanding dues against you. You may claim a NOC only after you’ve paid your loan amount in full. It helps you to get back all your papers of collateral deposited with the lender.

We should keep in mind that we may need another loan in the future for some other purpose. The lender will check our CIBIL score. If we have paid our loans in full and got the NOC, the lender will have no objection sanctioning a loan favoring us. You may fail to get the NOC sent to you through the post. It’s your responsibility to get it directly from the bank. The NOC should contain the address of the property, the name of the owner, and the loan account number. You need to submit the copy of the NOC to the sub-registrar of the property while registering your property in your name. in case your property is insured, without a NOC, the payments for any damage to the property will be made to the lender or the bank. In case you’ve misplaced or lost your NOC document, you should lodge an FIR with the details of the loan. You may get the duplicate NOC but that’s a long process. You may have to wait for it. There are formats of the NOC available with the lenders. You should make sure the certificate mentions the loan information and the details of the property. There are some NOCs issued by the lenders with a limited timeline. It may expire after a date. You must verify it and be sure of its expiry details. You’ve to read the fine prints. If you miss out on this clause, you will face difficulties getting the NOC issued again.

Also read: House Registration Process


What is the importance of a NOC?

A NOC is legal proof that you’ve paid all dues to the lender. There is no outstanding amount and the loan has been repaid in full. The lender has no legal rights on the collateral submitted by you. It reflects your creditworthiness for your future loans. It is going to influence the CIBIL score that is so vital to make you worthy of a loan from a lender. Whenever you go for a loan in the future, the lender will go for your credit history. Your credit history should show that you have paid back the loan in time.

How to get the NOC?

Conventionally, the NOC is sent to you by post by the lender. It should be sent to you once the loan account has been closed. It may be lost or sent to the wrong address. You should make sure that you receive the NOC in time with all the relevant information and details in it. For the registration of the property, the NOC should be produced to the registrar. Without a NOC, the lender will have legal rights over the property

What happens if NOC is misplaced?

You need to lodge an FIR with a copy of the details of the loan. A copy of the FIR should be handed over to the lender with a request to issue a duplicate NOC. It may take some time and you should follow up on the process.

What Is a NOC?

A NOC is also known as a no dues certificate. This certificate is issued by the lender to the borrower after the borrower has repaid the loan in full. This document also contains your credit history. This piece of information is very important for your future loans or selling of property.  A NOC is legal proof of your having paid all the outstanding amounts to the lender. It is a document that protects you against the lender claiming the property as its own. When you check your home loan online, don’t forget to check the amount of EMI. It can be known using the EMI calculator.

What is credit history?

You will be eligible for a housing loan easily if you have a positive CIBIL score. You must update your CIBIL data after you’ve paid all your dues to the lender. You should ensure that your credit history is flawless.
When you avail a loan for purchasing a house, you submit a lot of documents with the lender. After the closure of the loan, you must take back all these documents from the lender. You should also see that all the pages of the documents are intact.
You must get the latest credit score from the bank after the loan closure is made. An updated CIBIL score should be high after you’ve paid your loan. You should also remove a lien from the office of the Registrar. You must ensure that the lien has been removed after the closure of the loan. You need this work done now. If you don’t, you will have to visit the registrar for getting it back in the future when you’re going to sell your property in the future. You cannot sell your property unless the lien is removed.

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