25 JUNE, 2021

Closing your loan is as important as applying for it. Among the many steps of a loan closure process, getting your home loan NOC document from the lender is a crucial one. For, it helps you prove that you are now debt-free.

Below, go through what an NOC is and the three reasons why you should ensure you get the same from the lender.

What Is NOC?

No Objection Certificate or NOC is a legal document that proves that you have repaid the loan amount. It contains all the details such as your name, address of the property, loan account number, date of loan closure, etc. Also called the no dues certificate, you get this certificate when you have repaid the loan amount, and there are no outstanding dues. It certifies that the lender has no right over your property or its documents.

Why Should You Get an NOC?

Once you repay the loan amount, you must get the NOC to prove that you have repaid the loan in full and the lender has no right over the property. Go through the following three important reasons to know why you should get an NOC document.

  • Removes lien from your property

    An NOC removes the lien from your property and certifies that the lender has transferred the property to you. Once you get an NOC, the lender cannot ask you to repay any dues now or in future. Also, in case the lender chooses to take a legal action against you for unpaid dues, you can use an NOC as a legal document to prove that you have no dues left to repay.
  • Helps you claim documents

    When you avail a loan, you need to submit various documents to the lender, like Income tax returns, bank statement, property documents, identity proof, address proof, trade certificate, etc. These documents remain with the lender until you repay the entire loan. Once you get an NOC, you can claim these documents from the lender. Moreover, you might take a top-up loan or furnish any additional collateral (gold, other property) during the loan tenure. With an NOC, you can also claim those collaterals and their relevant documents.
  • Improves credit score

    When you repay a home loan, the lender informs the credit bureau about the repayment, which is then updated in your credit report. But if the lender fails to do so, you could still be under debt in the records of the credit bureau. If the credit bureau is not appraised about your loan repayment, it can adversely affect your credit report and credit score. After getting an NOC, you can ask the lender to update the credit bureau about the repayment of the loan, which thus helps in improving the credit score.
    Usually, the lender sends the NOC to your registered address. Therefore, if you change your residential address, you should intimate the lender of the same. Therefore, make sure to collect your NOC from the lender after your loan repayment to avoid any hassle in the future.

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Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.