Owning a home is a loved dream we all cherish. Considering Home an expensive thing to afford; people mostly prefer to avail Home Loan to materialize their dream. However, once your housing loan repayment is complete, you look to get a loan closure from the lender. The document is NOC (No Objection Certificate). This blog intends to explain what is Home Loan NOC and the value of NOC when you pay off the home loan.
Home Loan NOC: What is it?
A house is a great investment. Most importantly, it gives us a sense of financial security. Besides, it gives you a permanent roof over our heads. However, buying a house in today’s economic situation isn’t simple. Accordingly, we have to depend on home loans to accomplish this dream. To put in simple words, the finance should be repaid in monthly instalments within the set tenure. Once you repay the amount you need to have a document that validates the same. The document that the lender handovers as the confirmation is the NOC for a home loan.
To put in simple words, a No Objection Certificate (NOC) is a legal certificate the lender (a housing finance company/ bank) issues to a customer declaring that he/she has no outstanding dues towards the lender. In fact, at times this document is referred to as a “No Dues Certificate”. In particular, this document releases all rights of the lender over the guarantee (mortgaged property).
If you are still wondering why you need to ask for the NOC once the loan is repaid; let’s explain why you need it when you pay off the home loan EMIs.
NOC for Home Loan: Importance
- Take away lien from your property
- Perk up your credit score
- You may apply for another loan
- Put up your property for sale
- Get insurance claims (if any)
Home Loan NOC Importance is Best Explained Through The Following Reasons
1. You get back the legal documents of the property mortgaged
When you avail a home loan, your title deed is kept mortgaged with the lender. To put in simple words, the deeds along with some other documents remain in the custody of the lender. Once you’ve repaid the loan in full; you get the NOC for home loan along with the documents from the lender.
2. Impacts your credit score
Most importantly, paying off the loan on time improves your credit score. If you have an ongoing loan or if you default on EMI payment your credit score gets affected. In particular, a good repayment schedule makes you eligible for a further loan.
3. Future lenders can sneak a peek into your financial health
You may need to apply for some other loans in future. To put in simple words, you may need education loan to sponsor your children’s higher education or marriage loan to support your children’s marriage. A proper NOC weighs up your repayment track record in fact, help future lenders to approve.
Now that we know the home loan NOC importance, let’s discuss the NOC transfer procedure.
- Firstly, reach out to your lender and apply for the NOC for loan closure
- Secondly, the lender acknowledges your application and goes over the status of your loan
- Accordingly, the lender sends the NOC to the address mentioned in your home loan application
Wrapping up
Once you completely pay off the loan, the lender should send the NOC to the customer via registered post. If you have not received the document within a month, you should get in touch with your lender. Most importantly, enjoy peace of mind!
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