If you have paid off your home loan, you may feel it is a massive relief. You need not have to feel the burden of EMIs anymore. But you must know that just paying off the full loan amount doesn’t mean you can now forget about the loan completely. You must complete another critical step, i.e., obtain an NOC from the lender.
What is NOC?
An NOC or No Objection Certificate is a legal document that you must obtain from the lender after you pay the last EMI or settle the full amount before closing the loan account. The document essentially states that you have no more pending dues to be paid and it clears you off all the obligations to the lender.
The NOC features a list of vital information, including the property address, date of last EMI payment or the date of home loan account closure, the home loan account number, etc. Once you receive this critical document, you can be assured that you are the legal owner of the said property.
Importance of getting the NOC after repaying the home loan
- Getting back the property ownership documents
When you apply for a home loan, you must submit several documents to the lender. This includes income certificate, and property-related papers, which remains in the lender’s possession until the end of loan tenure.
When you repay the full amount, you must apply for an NOC and get back all the property ownership documents. You must then submit a copy of the NOC to the registrar’s office to strike off the hypothecation.
If you fail to do this, the lender will continue to be the legal owner of the house and you may not be able to sell it in the future. The NOC is vital to get the full legal ownership of the property. Further, in the event of any accident or damage to your house, without an NOC, the insurer will pay the claim amount to the lender and not to you.
- Helps you improve your credit score
When you apply for any loan, be it a home loan, or a car loan, the financial organisation will consider your credit score to determine your eligibility. Your credit score gets affected if you have an ongoing loan, especially if you miss paying the EMI.
Once the loan is paid off completely, you can update the credit score stating that you don’t have any outstanding dues. And to support your claim, you must have an NOC from the lender.
Without an NOC, your credit score may not be updated. Also, it can significantly impact your second home loan application in the future. If you have the NOC for the earlier home, it will reflect your sound financial standing to the lender, and you may get the second loan without any hassles.
How to get the NOC?
Generally, the lenders send the NOC to the home loan borrower after they have made the final EMI payment to their registered address. However, if you have had a change of address, you must update the same in the lender’s record. To get the NOC, you must follow the below steps.
After you repay the last EMI, you must give a written application to the lender for issuing the NOC along with all the original documents you submitted at the time of home loan application.
Some lenders allow the borrowers to download the certificate online from their website. To get the NOC online, you must log into the lender’s customer portal, provide the necessary details, and get it sent to your registered email address.
NOC is a vital home loan document, make sure that you understand its importance and get the certificate without fail to enjoy complete ownership of the property.