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Why an NOC is Important Once You Close Your Home Loan

By Aakash Jain - Feb 12,2022
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A home loan is an important financial instrument that can let you fulfil your dream of owning a home. Availing a home loan will require you to pledge collateral as security. While it is important to pay your EMIs in the repayment tenure you’ve chosen, it is also important to close the loan with all the required formalities duly completed.

One such factor is obtaining a No Objection Certificate (NOC). NOC is a document that the lender issues to the borrower. This document basically infers that you have closed the loan formalities, and anything associated with it completely and you are no longer obliged to the lender. Also, the collateral that you had pledged is completely yours and the lender has no right over it now.

The document will have the required details like loan account number, your name, address, address of the property, date when the loan was closed etc. The document is legally recognised.

In addition to the closure of the loan, an NOC holds importance in various aspects too. As mentioned earlier, with the NOC in hand, the collateral you had submitted to avail the loan is legally and rightfully yours. It will also help you apply for loans further without any hassles. With the NOC in place, there are no legal implications too, as it indicates that all the dues have been paid to achieve closure of the loan.

NOC also has a positive impact on your credit or CIBIL Score. It reflects that you have closed the loan duly on time, thus indicating your creditworthiness. 

Also, not many may know it, but in case your property undergoes destruction, you can opt for insurance claims. And with NOC, the payment can be made by the insurance organisation. 

So, how to obtain the NOC? Let’s take a look at the process. Once you make the last EMI payment, you can request the NOC by writing a letter to the lender/financial organisation from whom you have availed a loan. With an NOC, you can also ask for the return of the original copies in the same letter. It generally takes a few working days for the NOC to reach you.

With financial services taking strides towards digital advancements, you can now download the No Objection Certificate by visiting the online portal of the lender and also view your loan details.

If your property is registered, you will have to approach the Registrar of Properties, with your loan representative in order to obtain the NOC.

Having the knowledge of the NOC is very important so that you are not embroiled in legal tussles later. So, reach out to your lender or financial advisors to know more about it. Most of them who are aware of the NOC ask for it but do not give it due importance in terms of timelines of receiving it which will cause problems further.

So, approach the lender for NOC, once your last EMI is paid.

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