The feeling of paying off your home loan is wonderful. A huge responsibility is off your back, and you feel so relaxed. You need not run around banks or financial institutions, and can focus on other important matters of life.
This is how every home loan borrower feels after paying off his or her debt. In a hurry, most of them forget to collect the No Objection Certificate (NOC) from the lender. If you do not collect NOC, you may land in trouble in the future.
What is a No Objection Certificate (NOC)?
The No Objection Certificate (NOC), also known as No Dues Certificate is important when you approach some other bank in future for financing. They will ask for the NOC (given by the principal bank) because the NOC means that there are no dues outstanding in your name. The home loan was fully repaid by you on a specific date. So, it is important that you ask for this document from the lender for financial transactions in future.
How do you get NOC?
Not every home loan borrower is aware that this document is necessary. Not every lender dispatches the NOC to your registered address. This is why it is important for you to know that the document like NOC exists. Never forget to ask for the NOC for while repaying and closing your home loan.
NOC is usually dispatched by the lenders to your registered residential address. So, make sure you inform the lender about the change in your address if there is any.
How home loan borrowers have found NOC helpful
Case 1: Rakesh Bajaj, a 48-year-old software engineer applied for a second home loan, after a period of 2 years after fully repaying his first home loan. He got a call from the lender telling him that his Credit Information Bureau of India Limited (CIBIL) score was lower than 700. He had never taken any credit facility except one home loan. There was some problem with his home loan during the last year of the tenure. Rakesh did not forget to take the NOC from his first lender. He submitted it to the bank while applying for the second home loan. The NOC became his savior. The home loan was sanctioned without any further CIBIL queries.
Case 2: Smita Singh, a 43-year-old fashion designer, had some delayed payments on one of her credit cards. She made all payments that were due within a month and also asked the concerned bank to give an NOC saying that all dues were duly paid on a specific date. She submitted the copy of NOC every single time she applied for a new credit card facility or loan.
A quick tip:
You must ask for an NOC/letter if the delay in payment of home loan instalment happens because of some technical issue at the bank or the financial institution’s end. Your lender will not remember the reason for the delay while submitting your credit information to the credit agency. It is your home loan, and you must be fully aware of everything about it.