NOC is a document that financial institutions issue once borrowers pay off their loans in full. It is an essential document that one must make sure to collect from his/her lender as it serves as a proof of loan closure. In case of a home loan, the document also states that the lending institution ceases to hold any legal claim on the property and hands over property rights to the borrower. A No Objection Certificate (NOC full form) contains the following details –
- Contact details
- Details of the mortgaged property
- Date of loan closure
The importance and reasons to obtain a No Objection Certificate
You should also know what NOC is and what its benefits are. Thus, some critical reasons to collect this certificate have been discussed below –
- Impact on credit score –
It is crucial to obtain this certificate for your home loan on time from your lender as not doing so will affect your CIBIL score. You need to ask for this certificate as such an issue is also conveyed to the credit bureaus, thus reflecting on your credit history. A NOC acts as proof that you have repaid your loan in time and that there is no outstanding amount. It thus reflects that you are responsible with your finances and helps improve your credit score.
- To collect property-related documents from the lending institution –
When you apply for a home loan with a lending institution, you are required to submit all property-related documents along with other essential documents to your lender. Throughout the repayment period, these documents are kept with the lender. You can avail these documents only after you pay off the loan amount in full. With a NOC letter, you can thus claim your documents from the financial institution.
- For balance transfer –
If you are opting for a home loan balance transfer, then you need to submit the certificate of no objection to your new lender as well to refinance the outstanding amount. There are several reasons to refinance your home loan. For instance, you can opt for a lender offering better interest rates and terms. Nevertheless, a No Objection Certificate is a mandatory document required for this purpose.
- For insurance claim –
If you apply for a home loan to purchase a registered property, you need to collect the NOC and submit it to the registrar of properties after loan repayment so that the mortgage is released. In case you don’t provide the NOC, the lending institution will remain the owner of the property. Consequently, in case of any damage, you will not be able to make an insurance claim as well.
How to collect your NOC letter?
The lending institution usually posts the No Objection Certificate to the borrower’s registered address. However, if you have not received any such document from your lender after loan repayment, you should take the following steps to collect it –
- Draft a letter to the lending institution requesting them to issue the certificate as well as for the release of other documents held by them.
- The lender will then check the status of your loan repayment.
- If everything is in order, the financial institution will issue a No Objection Certificate, which will be mailed to your registered address.
It may also happen that you received your NOC for your home loan closure, but misplaced it due to some reason. In that case, you should first lodge an FIR. Then, you can apply for a duplicate NOC by submitting the FIR and other requisite documents to your lending institution.
Some lenders also provide online certificate download facility. You can visit their online customer portal and enter your loan details, and then proceed to the e-statement section to download your NOC letter.
Additionally, some lending institutions also provide pre-approved offers to existing customers to make the process of financing hassle-free. Such offers can be availed on multiple financial products like loans against property and home loans. You can check your pre-approved offer by entering only your name and contact information.
Now that you know the what, why and how of a NOC, you must not forget to collect it after repaying your loan for the several essential reasons mentioned. Also, collecting such document in time helps avail loans and advances conveniently in the future.