The Importance of a Home Loan NOC

Most Indians take a Home Loan to arrange the funds to buy their dream home and yet a majority of these Home Loan borrowers are completely unaware of the concept of Home Loan NOC. This article focuses on apprising its readers about the importance of NOC and why one must obtain this document.  

What is Home Loan NOC? 

A Home Loan NOC or no-objection certificate is a document released by a lender or bank after a borrower has completed the repayment of the Home Loan and no EMIs are pending. The Home Loan NOC is a legal document that removes all rights that the lender had over the property before the borrower completed repayment and establishes the borrower as the sole owner of the property. 

While the lenders are obligated to release the NOC on their own, once Home Loan repayment has been completed, some lenders do not release this document on their own. In such a scenario, the borrower must write to the lender and request to release the No Objection Certificate. These days, some lenders also allow borrowers to download the NOC online from their portal after completing Home Loan repayment.  

What should the NOC document contains?

The NOC or no-objection certificate contains details; 

• Name of the Home Loan applicant  
• Date of issue of the document 
• Details about your outstanding loans 
• Owner Name of the property 
• Owner address 

Once the borrower has received the no-objection certificate, they must submit it at the registrar's office.  

​The NOC or no-objection certificate contains details, such as the name of the Home Loan applicant and owner of the property, address, etc. Once the borrower has received the no-objection certificate, they must submit it at the registrar's office.

Now that we know what a Home Loan NOC is, let us look at why it is important and why borrowers must obtain this document after completing loan repayment.   

Why Should You Have a Home Loan NOC?  

Your Home Loan NOC is a very important document. Here's why you must make sure to take it from your lender.  

It Helps You Improve Your Credit Score 

Once you have repaid the loan in full and obtained the NOC from the lender, the lender will inform the credit information bureau that you have cleared your loan. If you have been regular with your payments and have always cleared them on time, this final step will considerably increase your credit score as you will be seen as someone who can be trusted with timely repayment. A good credit score is crucial as it allows one to get easy access to credit whenever needed. People whose credit score is 750 or above get approved for loans almost immediately. Apart, they also get the best loan deals.  

People Also Read: What is a Good CIBIL Score for a Home Loan 

You Cannot Sell the House Unless You Have the NOC  

When you take a Home Loan to buy a home, you pledge the home you have bought as collateral. Though your lender does not get ownership rights, they do get the right to sell the property in case you default on loan repayment. As long as your lender has any right over the property, you cannot sell it. Once you have repaid the loan, you must obtain the NOC as this document removes the lender's lien from your property and makes you its sole owner. Thus, if you plan to sell a property against which you had a Home Loan, you must obtain the NOC letter from your lender and submit it at the registrar's office. 

It Helps You Settle Disputes 

A Home Loan NOC or no-dues certificate is important as it allows you to fight disputes and false claims in court. Once you have obtained the NOC, your lender cannot make any claims over your property. Further, if anyone tries to encroach over your property or establish false ownership, you can fight them in court. In other words, a no-objection or no-dues certificate is important as it brings you peace of mind and a sense of security.  

It Helps You Get Another Loan  

​Once you have repaid your Home Loan in full and you need another loan to buy another house or a car or arrange funds to afford your home's renovation or refurbishment cost, the Home Loan NOC will establish your creditworthiness and repayment capacity. It is an important document that can enhance a borrower's negotiating power, allowing them to negotiate for better terms and conditions in case they decide to take another loan.  

Also Read: Importance of NOC Letter after Paying off Your Home Loan  

Procedure to Avail of the NOC 

Now that we understand the importance of obtaining an NOC, let us look at the procedure to obtain this document.  

To obtain the Home Loan NOC offline, please follow these steps.  

• Go to your lender's office and ask any of their representatives to give you the NOC transference form.  

• Fill out the form with all the required details and submit it to the office of the bank manager.  

• During the next step, your lender will cross-verify your claim of complete Home Loan repayment. They will check whether you have cleared all EMIs and if any EMIs or any other payments are still pending.  

• Once the bank manager has reviewed your application, they will send the NOC letter to the registered address.  

You can also download the NOC form online. These days, many lenders offer this service, and it is far easier to obtain the NOC online than offline. So, see if this service is available to you.