A home loan is one of the most significant financial commitments that one can make. It includes a large sum and a long repayment tenure; hence, a thoroughly thought out approach is required to manage this debt over the repayment period successfully without any defaults.
Once you have repaid the full amount and any additional dues that you may have, you should get the NOC letter from your lender. This document is of great value, and it fulfils more than one purpose.
What is NOC?
The full form of NOC is No Objection Certificate. Essentially, NOC is a legal document that an organisation, or individual issues regarding their ‘no objections’ against the agreements made on that particular piece of paper. It is often required in case of visa application, employment, general litigation, etc.
In this regard, the lender will issue a NOC certificate when you repay your home loan successfully. It will serve as proof that you have no outstanding on your part, and free from any debt that you had with that particular financial institution.
This NOC letter contains important information such as –
- Name of the borrower.
- Loan account details.
- Property address and property details.
- Loan closure date.
Usually, once the loan repayment is complete, the lender will send it to your address via postal service.
Why is it important?
NOC for home loan means you have closed a home loan effectively. Along with that, having this legal document can help you in other aspects as well. Here are the top five advantages of this letter –
- Get back the collateral
Once you receive this letter, you can revert to your lender, and get back any collateral that you pledged while availing the loan.
- For the important documents
When you apply for a home loan, you need to submit various essential documents to your lender. It remains in the custody of the lender until you repay the loan completely. With the help of this letter, you can get back those documents.
- A proof of successful loan repayment
This NOC letter acts as a proof of your successful repayment of the loan. Hence, in case of any future legal discrepancies, you can provide it to save your interests.
- Improves your CIBIL score
Once you get this letter in hand, issue a request to update your credit history, which will subsequently improve your credit score
- Helps in your future loan applications
If you apply for credit in future, this NOC statement will prove that you have no existing debts. Thus, when you apply for a home loan for the second time, your chances of securing the credit will increase.
How to get a NOC statement?
Typically, you do not need to do anything to get a NOC from your home loan provider. Top financial institutions send NOC documents via postal services to your address after the debt is paid off. These lenders also extend lucrative pre-approved offers to make the home loan application process smooth and hassle-free. You can quickly check your pre-approved offers within seconds by providing your essential contact details.
However, in case of any delays, you can get in touch with your lender and ask for the certificate. You may have to submit a written application in this case.
Another point to remember here is that, if you have taken a home loan against a registered property, you need to submit a NOC copy of the register of that property to get the mortgage removed. Otherwise, the financial institution will continue to have the ownership of your property.
Now, you know what is NOC and its benefits, and the importance of keeping it safe to avoid any future issues. But, in case of a loss, theft, or damage to the NOC papers, log an FIR as soon as possible. Get in touch with your lender with the FIR copy and your loan documents to avail duplicate NOC letter.