Paid Off Your Home Loan? Know What to Do Next

Repaying a Home Loan takes years of financial management and budgeting. However, paying off the loan is only part of the journey. To gain complete ownership of your home, you need to go through the proper Home Loan closing process. 

Here is a comprehensive overview of the steps to take once your final EMI has been paid. 

Why Closing a Home Loan Matters?

When a Home Loan is sanctioned, the lender typically creates a lien on your property. Until the loan is officially closed, that lien remains. Even if your dues are cleared, your property documents remain with the lender. Moreover, your credit report continues to show an active loan. 

Here is what a formal Home Loan closure ensures: 

• Your property title is released from the lender. 
• Original documents are returned. 
• Your credit report reflects the closure. 

The Home Loan Closing Process — A Step-by-Step Guide

Once the final EMI is cleared, here is what you can do next: 

1. Confirm Loan Repayment

Reach out to your lender to confirm that all dues—including interest, fees, and any overdue charges—have been fully paid. Even a small amount left unaddressed can delay closure. 

2. Collect All Home Loan Closure Documents

This is the most significant part of the process. After approval, the lender will provide a set of documents that would substantiate that the loan has been closed. 

Documents to Collect After Home Loan Closure

Here are the key Home Loan closure documents you need to collect: 

• No Objection Certificate (NOC)/No Dues Certificate – This letter officially states that your Home Loan has been fully repaid. It also indicates that the lender has no further claim on your property. 
• Original Property Documents – These include sale deeds, title deeds, and any other paperwork submitted during the loan approval process.  
• Lien Removal Letter – If the lender registered a lien on your property, they will issue a letter stating that it has been removed. 
• Updated Encumbrance Certificate – This document (available at your local registrar’s office) should now show ‘No Encumbrance’. It indicates that there is no active loan on the property. 
• Unused Post-Dated Cheques (PDCs) – If you had submitted PDCs for EMI payments, collect the unused cheques.  

3. Remove the Lien

Some lenders register a lien on your property. This is essentially a legal right they hold until the loan is repaid. After closure, lenders remove the lien.  

Visit your local registrar’s office with the NOC and lien release letter. Once the process is completed, your property will be officially lien-free. 

4. Check Your Credit Report

Once the loan is closed, your credit report should be updated to reflect this. You can raise a correction request with the credit bureau if it is not updated.  

Keeping your report updated ensures your credit score is not negatively impacted. It also helps you secure better terms in the future, should you need a new loan. 

A Home Loan is a long-term commitment, and completing the repayment can be a milestone. But for complete ownership of your home, you need to complete the Home Loan closure procedure. Whether it is collecting your Home Loan closure documents, removing the lien, or updating your credit records, each step plays a key role in this process.