Everything About Home Loan NOC and Why It's Important

Owning a self-owned home is a great achievement, and the feeling of satisfaction is even greater when you have paid off the home loan. The burden of repaying a large sum of money is lifted off your shoulders when you pay off the loan in full. However, it's crucial to keep the proof of payment, which is called a No Objection Certificate (NOC), safely for future references.An NOC for a house signifies that you have cleared the loan amount you borrowed from the lending institution, and there is no outstanding amount remaining. Possessing an NOC for your house is essential as it can come in handy when you need to apply for another loan like a personal loan , car loan, or a home extension loan in the future. Not having an NOC can affect your credit score , and your lending institution may or may not approve your loan application. Therefore, it's vital to obtain an NOC from your lending institution after you have fully paid your home loan to secure your financial future.

Obtaining an NOC has several advantages, including clearing any future discrepancies regarding loan repayment, ensuring a healthy credit score by submitting it to credit bureaus such as CIBIL, and preventing legal issues related to loan settlement. Thus, this straightforward yet important legal document can help avoid several potential problems that may arise in the future regarding loan settlement. Also Read: Why Should You Get a NOC after Closing Your Home Loan?

NOCs are required for various loans, including home loans, car loans, business loans, personal loans, loans against property (LAP) , and loans against shares (LAS). To earn your NOC you need to first ‘write to the lender > request for the NOC> request bacl=k the original documents that you had to submit before getting the loan.

Once you have fully paid your existing home loan and wish to take a new loan, the lending company will first and foremost check for your credit score. If your previous lender has not updated the closure of your past loans over the CIBIL’s website, then your credit score may not be very good. Producing a NOC in this situation can help you clarify your closure status and improve your credit score as well. However, if you do not have a NOC, then things may turn difficult for you.

Firstly, NOC is an important document that always needs to be safeguarded. If you lose your NOC, file an FIR and reach out to your lender along with Loan-related documents and a copy of an FIR to acquire a duplicate NOC. This duplicate NOC process can be time consuming. If you have a home loan taken for a registered property, you need to submit the NOC copy to the registrar of properties to remove the lien of hypothecation. If you fail to do so, your lender will continue to own the property.