Paying off the home loan in full gives a massive relief. However, paying the last EMI is not the end of obligation; you must get a NOC from the lender. Read on to know the importance of getting a NOC after you close the loan account.
After you pay the last EMI of your home loan, you no longer have to worry about the repayment and focus on savings. However, in the moment of joy and relief, you must not forget one more important obligation, which is to get a NOC or No Objection Certificate from the lender. Collecting the NOC is vital as it absolves the rights of the lender from your property. Also, you must collect back the original title deed and other home-related documents that you submitted at the time of availing the loan.
What should the NOC contain?
While collecting the NOC from the lender, you must check the details in the certificate. The certificate must clearly state that the lender has no objection in giving back the original property-related documents to you. It must also mention that you have repaid the loan in full and that the loan account is closed. The certification must also specify details of the property, including the complete address, area, survey number, and the nature of the property. Lastly, the certificate must mention the loan account number, the duration, the start date, and the closing date of the loan.
Is obtaining NOC alone enough to discharge the lender’s right over your property?
No, apart from the NOC you must also obtain the Cancellation of MOD from the lender. You must ask the lender to submit a copy of the NOC to the sub-registrar while executing the cancellation of the MOD. You must get the mortgage cancelled by the Sub-Registrar and transfer the interest of the property from the lender to your name.
Benefits of getting the NOC from the lender
Improves credit score
When you close the loan account, the lender must report this information to the credit bureau. However, if they fail to report, you must ask the lender to update the records. The NOC will be an important document for this process that the lender may ask before updating the closure of the loan account in the credit bureau’s records. Once the information is updated, it will automatically improve your credit score.
Helps you get loans easily
The NOC acts as proof that you have successfully closed the previous home loan. This not only reflects your creditworthiness in the positive light but also makes you eligible to apply for another loan and get a better deal on the home loan interest rate.
Allows you to sell the property
If you wish to sell any real estate property, the said property must not have any encumbrance. Having a NOC from the lender and the Cancelation of the MOD certifies that there are no dues on the property.
Claim insurance benefits
When you apply for a home loan, most lenders require you to have an insurance cover for the property. After you close the loan account and get the NOC from the lender, you can receive the insurance benefits in case of any damage to the property. The NOC helps you to cancel the lender’s claim on the property, and the insurance company will pay the amount to you rather than the lender.
Now that you are aware of the importance of getting the NOC after closing the loan account make sure that you get this important document and enjoy full ownership of the property.