Fixed Deposit

The importance of a No objection certificate when you finish paying your home loan

Just finished paying off your home loan? Don’t breathe easy yet, for there is one more important task that needs to be done after you have repaid your entire housing loan. Guess what we are talking about? The No Objection Certificate or NOC as it is colloquially known as. A NOC is a legal document issued by banks such as IDFC bank that give home loans. A NOC essentially states that the borrower has no outstanding dues towards the lender. The NOC has to be then submitted to the registrar of properties. And only then is the lien of hypothecation struck off.

Why do you think it’s important to get a NOC? Well, the reasons are many. Here are a few:

  1. If you fail to get a NOC and submit it to the registrar of properties after you have paid off your home loan, the lender, that is the bank or financial institution continues to be the owner of the property. This, despite the fact that you have fully paid off your home loan. And unless the lien of hypothecation is struck off, you cannot sell the house even if you want to.

  2. Attainment of the NOC is like the final step towards achieving a clean credit score or CIBIL score. So, whenever you close any housing loan then it is recommended to take NOC from the bank or lender. A home loan is completely closed only after you have taken the NOC. Often borrowers place a request for NOC but do not follow up later on. This kind of lazy behaviour may adversely affect your creditworthiness. You can either visit your home loan branch to get the NOC or get the NOC through online banking. The process of getting a NOC from the websites of prominent banks such as IDFC is easy and simple. Just make sure that the certificate carries the details of your property as well as the loan details, and the words ‘No Objection’ is clearly mentioned. Once you get the NOC, your CIBIL database will be updated by the bank, and you will then be safely marked as a trustworthy customer.

  3. Once you have a high credit score, getting another loan will be easy. As you already know that banks such as IDFC often check a customer’s credit score or creditworthiness before disbursing a loan to them. So if you are eying at another loan – be it a personal loan or a housing loan – it is important that you close your previous loan fully first. And to close your existing home loan, getting a NOC is of utmost importance. Once you have taken the NOC, you can even submit the title deed as collateral for some other loan.

  4. As you might have known by now that obtaining the NOC will ensure that the lender or the bank does not have any charge over the property. An added advantage to this is that you can get insurance claims in case of destruction of the property. Once you have a NOC, the insurance company will make the payment of the claim to you instead of the lender.

  5. So, once your home loan repayment is over, waste no time in obtaining the NOC. Remember that you have to finish the formalities within a stipulated period of time. If you have taken a housing loan from reputed banks such as IDFC, you can always visit their branch, log in on their website or call up on their phone-banking to know the detailed procedure of getting a NOC after you have paid the last EMI on your home loan. Do not procrastinate the process. Delay on your part may lead to several complications later on.