Congratulations! You have repaid all your dues on your home loan. Now your home is yours without anyone else’s claim on it. But, wait! It’s not the time to celebrate yet. There is one more important step that you might be missing on to complete the process of your home loan repayment. It is getting a no-objection certificate (NOC) from the lender.
Getting an NOC is as important as paying your outstanding dues towards a loan. An NOC is an additional proof that you have paid all your dues and that the lender has no right over your documents and collateral property.
Therefore, it is important to know what an NOC is, and why you should get it as soon as your loan repayment is over. Continue reading to know more.
What is a no-objection certificate (NOC)
Also called as no dues certificate, an NOC is a legal document issued by your lender that declares that you have no unpaid dues, EMI or fees left to be paid. Which is why, obtaining an NOC is very important after you close your home loan. It contains crucial information like your name, address of the property and your loan account number. It certifies that the lender has no right over your collateral property and it has been transferred to you.
Why is getting a NOC important after closing your home loan
Removes lien from your property
You need to submit your property documents as collateral when you avail a home loan. This collateral remains with the lender until you repay the loan. In simple words, taking a NOC from the lender removes all lien from your property and gives you the exclusive right over your property.
Improves your credit score
It is important to update your credit report about the status of your loan. For this, CIBIL and other credit bureaus must be informed that your loan has been paid and you have no unpaid dues. What if the lender fails to do so on time? In CIBIL’s records, you might still be under debt. With an NOC you can prove that you have paid off the debt and are no longer under any obligations. This in turns improves your credit score and helps you take further loans whenever needed.
Serves as a proof
NOC is not only needed for CIBIL but also for your records so that no one can ask you for any more dues later on. For example, if you have an NOC, you can present it before anyone, if ever the lender comes back to you saying that you have unpaid dues left. They could also take legal action against you claiming that your loan repayment is pending. If you have an NOC, you can use it as proof that all the dues were paid and you are not liable for any more money.
How to get NOC
Usually, the lender sends the home loan NOC in India to your registered address. However, if you do not receive your NOC on time, you should contact your lender and write to them asking for an NOC and also requesting them to return all the property documents they might have with them. If by chance you misplace your NOC, it is essential to file an FIR, and get a duplicate copy from the lender.
To sum it up, it is crucial that you get a home loan NOC from the lender at the earliest. This will not just give you peace of mind, but also keep you at bay from any legal hassles with respect to ownership of the property.
