Importance of NOC Letter After Paying Off Your Home Loan

Just finished paying off your Home Loan? Well, before you heave a sigh of relief there is one more essential task that needs to be done – getting the NOC. The NOC or ‘No Objection Certificate’ is a legal document that is issued by the lending institution that approved your Home Loan in India and provided you with the Home Loan Sanction Letter. An NOC states that the borrower has no outstanding dues toward the lender. It must be submitted to the registrar of properties to strike off the lien of hypothecation. 

There are multiple factors that confirm the importance of getting an NOC; some of which are listed below: 

1. Without NOC, the lender remains the owner of your property: If you encounter a failure in getting an NOC and submitting it to the registrar of properties after you’ve paid off the Home Loan, the lending institution – that is the financial institution from which you availed of the loan, will continue to be the property owner of your property. This is even after you have completely paid off the Home Loan. And until the ‘lien of hypothecation’ is successfully struck off, you can’t sell the house.

2. It helps sanitise your credit report: Getting the NOC is like the final step toward achieving a clean credit or CIBIL report. A Home Loan is completely closed only after you have taken the NOC from the bank/lender. Often borrowers request NOC but may miss to follow up later, consequently impacting their credit score. NOC can be obtained from your nearest Home Loan branch or even online. In either case, you need to make sure that the certificate carries all kinds of details of your property as well as the loan details, and that the words ‘No Objection’ are mentioned clearly. Once you receive the NOC, the CIBIL database will be updated by the lender and you’ll then be marked as a reliable customer. 

3. You are in a better position to borrow a new loan: Once you manage to maintain a good credit score, availing of another loan will be seamless since lenders check a customer’s creditworthiness or credit score before disbursing a housing loan to them. So, if you have been considering yet another loan – be it a home or a personal loan – it’s essential that you close the earlier loan first. And to close the existing Home Loan in India, receiving an NOC is important. Once you’ve received the NOC, you can submit the title deed as collateral for another loan. 

4. You can claim insurance in case of damage to property: As you may have known by now, obtaining the NOC will make sure that the lender doesn’t have charges levied over the property. One of the major benefits is that you can receive insurance claims in case of the destruction of the property. Once you receive an NOC, the insurance firm will make payments of the claim to you instead of the lender.

So, once the repayment process is over, obtain the NOC. Remember that you should finish formalities within a stipulated period. If you have taken a house loan from any reliable and reputed lender, you can always visit the branch, log in on their official website or reach out to them via phone banking to learn more about the detailed process of receiving an NOC after you are done paying the last EMI on the housing loan. 

Additional Read: What is an NOC Letter? 

What Should You Do in Case You Have Misplaced Your NOC?

What if you took an NOC in the past but lost it later and need it now? An FIR is typically required to be lodged if the NOC letter goes missing. Then, a request to the financial lender should be made with a copy of the FIR and other relevant loan details. However, getting a duplicate NOC letter may take time and effort for a follow-up. 

Many lending institutions have made available the format of NOC letter on their official websites. Make sure that the certificate carries the details of the property along with the loan details. The text “no objection” also needs to find a suitable mention. An essential thing to recall is that NOCs of some lenders have a validity that extends for a limited period. It is recommended to check the validity with your lender. 

The Process of Obtaining an NOC Letter

Steps to Obtain an NOC Letter

The following are the steps to obtain a Home Loan NOC: 

Step 1: Reach out to the lender and apply for NOC by filling up a form after paying the last EMI.

Step 2: The lender will process your NOC form by verifying the information provided by you. 

Step 3: After the verification is successful and the application is processed, the lender will send the NOC via post to the registered address.  

How long does it take to receive an NOC letter?

While an exact estimate cannot be provided for the same, you can expect the delivery of the Home Loan NOC letter within a few days of Home Loan completion or NOC application.  

How an NOC letter can affect your credit score?

During the calculation of the CIBIL score, the NOC can be referred to by the credit bureaus under certain special circumstances. For instance, if the lender does not update the loan closure to the credit bureau, your credit report will not be updated. In such a case, you can submit the NOC to establish the fact that your past loan has been fully repaid.  

In this case, your credit score will be saved from getting affected. Besides this, there is no other significant reason for your NOC to intervene in your credit score, but it’s always best to have one, nonetheless. 

Concluding Thoughts

Few lenders may send a Home Loan NOC letter by post and on their own to your residential address. However, if not, you’ll have to follow the method mentioned below. Remember, that some steps may differ from one lender to another, but here are the general steps:  

Step 1: Reach out to the lending institution from whom you’ve availed of the loan. Try to get hold of the NOC transference form. Fill the form with the required and accurate information. Please submit it to the manager or relevant employee associated with the lending institution.  

Step 2: The lending institution will review the application, whether all the EMIs are fully paid, and whether there are no outstanding dues. 

Step 3: Once the application review is executed, the lender will send the NOC for the housing loan to the address mentioned on the NOC application form or the housing loan application form. 

Note: The content on this page is for informational purposes. Processes at Bajaj Housing Finance may be different.   

*Terms and conditions apply.  

​Also Read: Know the Do’s and Don'ts Foreclosing a Home Loan