Importance of Encumbrance Certificate for Home Loan_Banner_WC


Encumbrance Certificate Meaning

Encumbrance Certificate Meaning

Purchasing a property can be taxing. A lot of research goes into choosing the right property, evaluating its affordability, and finding the right lender for a housing loan. Even if everything falls in line, the amount of paperwork needed in the process can be overwhelming. Lenders demand a bunch of documents asserting one’s identity and repayment capacity. One such document is the Encumbrance Certificate that is often required to process a Home Loan application. Read on to know all about EC for Home Loan.

Purchasing a property_WC

What is an Encumbrance Certificate?

EC that stands for Encumbrance Certificate is a legal document used as a proof of free possession or title of ownership of a property. It is an essential document that is required when selling or purchasing a property, or when applying for a property loan or Home Loan to confirm that the concerned property is free of legal or economic liabilities.

Types of Properties that need Encumbrance Certificate_WC

Types of Properties that need Encumbrance Certificate

Properties, whether newly constructed or resold, may both require ‘Encumbrance Certificate’ to confirm their status whether free/not free from any financial liabilities. When you are buying a flat, an EC ensures that the person you are dealing with is a genuine owner of the property and that there are no pending liens/debts against it. When selling a property, the seller must apply for the EC with the local government body in order to show it to the buyer when they demand. Besides buying and selling properties, you also need an EC when applying for a Home Loan. This exercise also puts a check on the malpractices happening in property dealings and protects the buyer from frauds.

Why is an Encumbrance Certificate Required for a Home Loan_WC

Why is an Encumbrance Certificate Required for a Home Loan?

Buying a house is a big investment, which is why buyers must have an Encumbrance Certificate to avoid fraudulence and protect their legal titles over the property. An EC also helps lenders assess the borrower’s eligibility for a housing loan or property loan. Apart from that, the following reasons make an Encumbrance Certificate important.

The certificate helps the investor determine if any of the following has been generated against the property in question –

  • ​Lease rights
  • Lien for mortgage
  • Third-party rights
  • Other charges

If the EC for Home Loan states that the concerned property has no associated encumbrances, then the lender and the potential buyer can safely carry out any transaction with respect to the property. However, if the document confirms charges generated against the property, it will alert the lender and the buyer to protect their interests and not engage in further transactions pertaining to the property in question.

Impact of Encumbrance Certificate on Home Loan Approval

Impact of Encumbrance Certificate on Home Loan Approval

An encumbrance certificate reflects the status of a property – whether it is free from legal liabilities and whether it has a lien on it. Naturally then, a property with encumbrances attached would have problems with assigning a Home Loan. Unless you submit a Nil-Encumbrance, you possibly cannot be approved for a loan.

Process of Obtaining Encumbrance Certificate_WC

Process of Obtaining Encumbrance Certificate

Documents Required for obtaining EC

An applicant needs to provide the following documents to apply for an Encumbrance Certificate. These documents need to be submitted at the office of the Sub Registrar where the property has been registered.

  • Attested copy of identity proof
  • Attested copy of address proof
  • Property registration document
  • Property and its title/possession deed details
  • Sale deed / partition deed / gift deed of a property, if any deed has been completed previously
  • Copy of reference/letter of the authority before which the Certificate is to be presented

Applying for EC in the Sub-Registrar's office

An Encumbrance Certificate can be obtained from the office of the Sub Registrar where the property has been registered. To corroborate the transactions made regarding the purchase of the property, the borrower/applicant must apply for an EC to the Registration Office along with other documents, such as an attested copy of one’s identity and address proof, details of the property and titles, proof of ownership, and the required fees.

The certificates and application forms are all mentioned in the annexures to the rules of the Registration Acts of the respective states. Generally, applications are made in Form No. 22 while ECs are issued in Form no. 15, and NEC in Form no. 16.

Timeline for Obtaining Encumbrance Certificate

Following the application submission, a government authority or Officer will check the records to confirm the necessary details, which may take over 15 working days.

Next, the authorities will issue an Encumbrance Certificate with details of all transactions for the specified period. In case of zero transactions, a Nil Encumbrance Certificate (NEC) will be issued. This may take between 15 and 30 days.

Risk of not obtaining an Encumbrance Certificate

An encumbrance certificate is an obligatory document to ascertain the status of the property and also to get a Home Loan. Not availing an Encumbrance Certificate means not ensuring whether the property is free from any lien. This could eventually lead to frauds.

What Does an Encumbrance Certificate Include_WC

What does an Encumbrance Certificate Include?

An EC for Home Loan issued by the Registration Office not only involves encumbrances but also all acts and encumbrances affecting the property. These transactions recorded by the Registrar are carefully examined and necessary details are made to reflect in the document.An EC for Home Loan issued by the Registration Office not only involves encumbrances but also all acts and encumbrances affecting the property. These transactions recorded by the Registrar are carefully examined and necessary details are made to reflect in the document.

Usually, the Encumbrance Certificate pertains to a certain period and all transactions relevant to that period alone are considered. The EC further reflects only those documents and transactions that are registered with the office. Short-term lease deeds and testamentary documents need not be registered under the law and hence, are excluded from the recorded transactions.

How Long Will It Take to Get an Encumbrance Certificate?

How Long will it Take to Get an Encumbrance Certificate?

The time for obtaining an Encumbrance Certificate varies across states depending on the procedure. For instance, applying for the certificate online takes much lesser time than it would take when applied offline. It usually takes about 2-3 working days for online applications to get processed while the time taken for offline application processing takes up to 30 days.

How Long Will It Take to Get an Encumbrance Certificate_WC

How to Apply for an Encumbrance Certificate (EC) Offline and Online?

Buyers can apply for an Encumbrance Certificate online or offline. This is because only a few states allow buyers to apply for an EC online. Here are the steps involved –

  • ​Visit the State’s official website and choose the option to apply for an Encumbrance Certificate
  • Key in the required fields and hit the ‘Save/Update’ button
  • Search for and enter the period for which the EC is needed, and click on the ‘Calculate Fee’ option.
  • After paying the requisite application fee amount and being redirected to the ‘Acknowledgement’ page, click the ‘View’ option and take a printout of the same.
  • Get the transaction for the given period and details verified by an Inspector/Official
  • Get the EC issued for all transactions occurring within the specific period. In case of no transaction, get an NEC issued.

Others applying from states with no way of applying online must follow the offline process, which involves the following steps –

  • ​Visit the respective Sub Registrar’s office and fill out Form no. 22 with personal and property details
  • Pay the required fee amount at the counter
  • Following the submission, get the Acknowledgement/Reference no. to track the application status on the portal.

How to Track Encumbrance Certificate Status_WC

How to Track Encumbrance Certificate Status

​​​​Here's how you can track your E​ncumbrance ​C​ertificate​ Status online:​​​

  1. Click on "Certificate" and choose "Encumbrance Certificate". Then, click on "EC Status".​​
  2. Enter the required transaction details.
  3. Fill in the CAPTCHA and select "Check Status"​ to track EC status online​.​​

​​​​Your EC will be displayed on your screen. Remember to save or download it for future reference.​​​

What Is a Non-Encumbrance Certificate?

What is a Non-Encumbrance Certificate?

A Non-Encumbrance Certificate, also known as Nil Encumbrance Certificate (NEC) is issued to guarantee that the property being offered as security to the bank has no encumbrances associated with it. Non-Encumbrance Certificate implies that the concerned property is completely self-owned and has no link to any other financial institutes or banks for the purpose of taking a Home Loan or property loan

What Is a Non-Encumbrance Certificate?_WC

What is the Difference Between an Encumbrance and a Non-Encumbrance Certificate?

The major differences between an Encumbrance Certificate and a Non-Encumbrance Certificate are listed below –

  • ​An EC is registered in the Government records along with various registered encumbrances. An NEC, on the other hand, is issued when a property lacks any registered encumbrances against it.
  • An EC is issued on Form no. 15 while an NEC is issued on Form no. 16.
  • An EC typically takes about 15-30 working days to be issued. An NEC takes around 20-30 working days.

*Terms and conditions apply.



Applying for an Encumbrance Certificate online is a convenient process, but the time required to obtain and download the copy may vary from office to office. Also, post application, your property is inspected by the inspector after which the certificate can be granted. On an average it should take around 15 to 30 days or even more.

The validity of EC depends on when it is referred. If the transaction is taking place today, the Encumbrance Certificate should be updated till the latest date as you would want to know any fresh transactions that have taken place regarding the property. Individuals can obtain a property's Encumbrance Certificate for a duration of up to 30 years.

An encumbrance certificate is a legal document that certifies land details citing its ownership, legal and monetary liabilities. It acts as a record that ascertains the land is free of pending taxes, dues or any legal and financial issues. This ensures the buyer of a property can secure ownership without any legal troubles.

Importance of Encumbrance Certificate for Home Loan -RA_WC

Importance of Encumbrance Certificate for Home Loan -PAC _WC

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