3 min
24-March-2025
What is a business loan no due certificate?
A No Due Certificate (NDC) is a crucial document issued by a lender to confirm that a borrower has fully repaid a business loan. It serves as proof that all outstanding dues, including principal, interest, and any additional charges, have been cleared. This certificate provides a sense of financial closure for businesses and ensures that no future claims or liabilities arise from the lender.For businesses, securing an NDC is essential as it reflects a clean credit history, improves the credit score, and enhances eligibility for future loans. It also prevents legal disputes and helps avoid any unforeseen financial burdens. Whether obtained from a bank, NBFC, or any other financial institution, the No Due Certificate is a testament to the borrower’s financial discipline.
In this article, we will explore the importance, benefits, and process of obtaining a Business Loan No Due Certificate in detail.
What is a business loan no due certificate?
A Business Loan No Due Certificate (NDC) is an official document issued by a lender—such as a bank, Non-Banking Financial Company (NBFC), or other financial institution—confirming that the borrower has fully repaid their business loan. This certificate acts as proof that all outstanding amounts, including principal, interest, and any additional charges, have been settled, and no further dues are pending.Importance of a no due certificate
Proof of loan closure – The NDC serves as a legal document proving that the business loan has been paid in full. Without it, a borrower may face disputes or erroneous claims of unpaid dues.Credit score improvement – A clean repayment record, validated by the NDC, positively impacts the borrower’s credit score, enhancing future loan eligibility.
Avoiding legal issues – If a borrower fails to obtain an NDC, the lender may still report outstanding dues, leading to legal complications or unnecessary penalties.
Clear financial record – An NDC ensures that there are no ambiguities in a company’s financial statements, improving credibility for future investments or partnerships.
When is a business loan no-due certificate issued?
An NDC is issued only after the borrower has cleared all outstanding loan payments. This includes:The full principal amount
Interest accrued during the loan tenure
Any late payment penalties, if applicable
Prepayment charges (if the loan was closed before the agreed term)
Once the loan is fully repaid, the borrower must formally request the NDC from the lender. The institution then verifies the repayment details before issuing the certificate.
How to obtain a business loan no due certificate?
Verify loan repayment – Ensure that all dues are cleared before requesting an NDC.Contact the lender – Submit a formal request through the lender’s customer service, branch, or online portal.
Receive the certificate – The lender will review the account status and issue the NDC.
Securing a Business Loan No Due Certificate is vital for maintaining a clear financial record and ensuring smooth access to future financial assistance.
Importance of a no due certificate
A No Due Certificate (NDC) is a crucial document that signifies the successful repayment of a business loan. It serves as a legal and financial safeguard for borrowers, preventing any future disputes with lenders. Below are the key reasons why obtaining an NDC is essential:1. Proof of loan closure
The NDC acts as an official acknowledgement from the lender that all dues related to the business loan have been settled.Without this certificate, a borrower might face difficulties in proving that the loan has been fully repaid.
2. Prevents future legal disputes
If a lender mistakenly records an outstanding balance, it may lead to legal complications.An NDC serves as legal evidence that the loan account has been closed, preventing any claims of non-payment.
3. Enhances credit score
Successfully closing a loan with an NDC ensures that the borrower’s credit score remains intact or improves.A good credit score is crucial for securing future loans at lower interest rates.
4. Essential for future loan approvals
Financial institutions often ask for an NDC when evaluating new loan applications.It demonstrates financial responsibility and credibility, increasing the chances of approval for future loans.
5. Protects against unnecessary penalties
Without an NDC, there is a risk of unexpected penalties due to errors in the lender’s records.This certificate ensures that no additional charges or hidden fees are levied after loan closure.
6. Helps maintain a clear financial record
For businesses, financial transparency is crucial, especially when dealing with investors, partners, or auditors.An NDC ensures that there are no outstanding liabilities in the company’s records.
7. Required for property or asset release
If a business loan was secured against collateral (such as property or machinery), the lender may require an NDC before releasing the pledged asset.This document confirms that the business has fulfilled its financial obligations, allowing it to regain ownership of the asset.
8. Eliminates risk of future debt recovery notices
Sometimes, due to system errors, borrowers continue receiving repayment notices even after loan completion.An NDC prevents such occurrences, providing peace of mind and financial security.
9. Strengthens business credibility
A company with a strong financial track record, backed by an NDC, gains trust from suppliers, investors, and lenders.It enhances the business’s reputation, making it easier to secure funding for expansion.
Obtaining a No Due Certificate is a critical step after repaying a business loan, ensuring a hassle-free financial future.
Steps to obtain a business loan no due certificate
A Business Loan No Due Certificate (NDC) is an essential document that confirms the full repayment of a loan. To obtain it, borrowers need to follow a structured process to ensure smooth issuance. Below are the steps involved:Step 1: Clear all dues
Before requesting an NDC, ensure that all outstanding amounts are completely paid.This includes the principal amount, interest, late payment fees, and any prepayment penalties (if applicable).
You can check your Bajaj Business Loan Status to confirm loan closure.
If there are any discrepancies, contact the lender to resolve them before proceeding.
Step 2: Request the certificate from the lender
Once all dues are cleared, the borrower must officially request the No Due Certificate from the lender.Requests can usually be made through:
The lender’s customer service helpline
Visiting the nearest branch
Applying through the lender’s online portal
Clearly mention your loan account number and the reason for requesting the NDC to avoid delays.
Step 3: Provide required documents
The lender may ask for supporting documents to process the request. These may include:Loan account details (such as loan agreement or sanction letter)
Business loan statement (download it from here)
Identity proof (such as PAN card, Aadhaar card, or business registration documents)
Ensure that the details provided match the lender’s records to prevent unnecessary rejections.
Step 4: Follow up and confirm issuance
After submitting the request, follow up with the lender to track the status of the NDC.Some lenders issue the certificate instantly, while others may take a few days to process it.
Once received, verify all details on the NDC, including:
Borrower’s name
Loan account number
Loan closure date
Official stamp/signature of the lender
Keep both a physical and digital copy for future reference.
