Home Loan: Why NOC is required after closing your home loan

It takes a lot of planning and financial discipline to finally pay off a home loan, which typically takes 10 to 30 years depending on the loan tenure. After being under such a huge liability, the feeling of completing the overall home loan repayment process and having nothing to pay back to the lender is a big achievement and brings a lot of relief and financial independence.

Even after the last EMI is paid, the proper closure of the loan needs to be done by completing some formalities. One of the major tasks is to get a No Objective Certificate or NOC from the lender to get it confirmed that the home loan repayment is complete.

Let’s break it down for you and understand about a home loan NOC and its importance.

What is a home loan NOC?

A legal document issued by the bank or the NBFC, an NOC states that the borrower has no more dues to pay, thus clearing him from further obligation to the lender. The document includes all the crucial information such as the borrower’s name, loan details, property address, and date of loan closure, among others.

Importance of home loan NOC

Getting a NOC after repaying a home loan is very important as it helps to get an official confirmation that the borrower has repaid his dues and now holds complete ownership of the property. It also confirms that the bank has no right to the collateral and thus it has transferred the property in the borrower’s name.

Why do you need a NOC after paying off home loan?

While the NOC acts as proof of loan repayment in full, there are also other reasons why it is important to have.

1. It helps to update the borrower’s credit record and CIBIL score.

2. The NOC can be used for availing of fresh loans and quick approvals.

3. It can be used as a legal record of the dues being paid in case of any discrepancies or disputes in the future.

4. For those who have taken a Loan Against Property (LAP), getting the NOC will prove that the property is completely under their ownership.

How to get a NOC after loan repayment?

1. Borrowers may write a letter to the bank and request their original documents, invoices and an NOC.

2. In some cases, borrowers can also login to the customer portal of the banks or NBFCs and download the NOC.

3. Borrowers can visit the office of the Registrar of Properties in case of registered real estate property and get the NOC.

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