What is a Home Loan NOC and why should you get it?

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What is a Home Loan NOC and why should you get it?

  • Highlights

  • Getting NOC after paying all outstanding loan dues

  • Requesting NOC for Loan Against Property

  • Process for getting NOC for loan

  • Submitting NOC to CIBIL for correct credit history

Once you’ve paid off your home loan, you can sit back and relax, as you are now free from any more repayments. However, you must first ensure you have completed all the home loan closure formalities. Loan closure processes are as important as the loan application procedure, and not closing a loan properly can lead to trouble later on.

What is an NOC for home loan closure?

The NOC, or No Objection Certificate, is a legal document that states that you have paid all home loan EMIs and cleared all other outstanding loan dues. This document is issued by the lender and bears crucial information like your name, your loan account number, the address of your property, and date of loan closure, amongst other details. Also, the NOC will certify that the lender no longer has any right to the collateral and it has been transferred back to you.

Generally, the bank or NBFC will send the NOC to the designated address after the home loan formalities have been completed. However, if they fail to do so, or you have changed your residence, you can request your lender to give you the NOC for loan in person.

Does a home loan need an NOC?

If you have taken a Home Loan, you need to get an NOC on the closure of the loan account. Apart from this, you should ask for an NOC when you have successfully closed a Loan Against Property (LAP). In the case of an LAP, once you have the NOC, your property will be wholly under your ownership.

NOC process for a loan

Let us now look at the steps that should be followed in order to get your NOC.

1. One you have completed all your outstanding home loan payments, you have to write a letter to the lender to ask for the return of all your original documents, invoice copies, and an NOC. Usually the documents and the NOC are returned to you within a few working days.

2. If you have taken a loan from an NBFC, then simply log into your online customer portal, view your loan details, select NOC, and download the document. You can also choose to have it forwarded to your registered email address.

3. If you have taken a home loan on an unregistered real estate property, then the procedure is the same as above. However, if the property is registered, then you and a representative from the financial institution have to go to the Registrar of Properties’ office together to get the lien removed and to get the NOC.

Additional Read : How To Apply For a Home Loan a Second Time

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Why do you need an NOC?

To help you understand the importance of NOC for loan closure, here is a look at how it affects your financial health.

1. When you’re applying for a home loan, you’ll submit certain documents that will remain in the lender’s custody till the closure of the loan. An NOC will help you claim those documents when you’ve paid your dues.

2. On the closure of the loan, an NOC needs to be submitted to CIBIL so that they have the correct credit history. This is important because when you apply for another loan, the CIBIL report should state that you don’t have any outstanding loans.

3. An NOC is also important if you want to avoid future discrepancies with the lender. For example, if you don’t take an NOC, the lender might ask you to repay some dues a few years down the line. To save yourself from such problems, always ask for a home loan NOC and keep it filed properly.

4. Some financial firms may go a step further, and take legal action against you for not having settled your dues. An NOC is legal proof that you have made all your payments on time, and that the lender cannot take any legal action against you.

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