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About NOC Letters

3 min 07 Jun 2022
  • What is a NOC Letter?
  • Importance of a NOC Letter
  • Why Do You Need a NOC Letter?

What is a NOC Letter?

A NOC (No Objection Certificate) letter is a legal document that serves as evidence of the customer having no pending Home Loan dues to be paid. It is issued by your lender, marking the closure of the loan repayment, typically at the end of your repayment tenor. It is also known as a ‘No Dues Certificate'.

Your Home Loan, even after you repay the full amount, will be considered active if you fail to collect your Home Loan NOC. Borrowers who ignore the closure formalities can adversely affect their credit profiles. The collection of the Home Loan NOC is a crucial step of the loan closure process.

A customer receives possession of their NOC letter only when the EMIs, extra charges, and late-payment penalties (if any), have been paid off entirely. Another noteworthy fact about the NOC letters is that, upon collecting them, the rights of the collateral used for the loan application process revert to the customer.

What is the Importance of a NOC Letter?

Once you repay your Home Loan, the NOC Letter pronounces you as the legal owner of the property. It legally states that you owe nothing to your lender. It contains the loan account number and the loan closure date. With this document, you can assert total ownership of your property and even proceed to sell the property if you wish.

Why Do You Need a NOC Letter?

Having your NOC Letter is imperative to prove your Home Loan closure. Here are all the reasons why you must possess it after you’ve repaid your Home Loan in full.

  • A NOC letter acts as proof, backed by law, of completing the payment of all outstanding fees. With a Home Loan NOC, you regain possession of your property (collateral). Your lender will only record your loan repayment as ‘complete’ with the collection of your Home Loan NOC letter.
  • When you collect your Home Loan NOC, you are projecting yourself as an individual who can keep up with the debt commitments – raising your credit score significantly. Failure to collect your NOC letter reduces your chances of securing other loans with flexible payment plans.
  • Steer clear of legal entanglements by collecting your NOC in case there is ever a situation where your Home Loan repayment competition comes under the scanner.
  • While applying for a Home Loan, you must, per requirements, submit some financial documents to the lender. The original copies of these documents stay in the lender's care for the duration of the loan. To retrieve your documents after loan repayment, you will need your NOC letter.