9 Points to Keep in Mind When Closing Home Loan
When your loan tenure comes to an end, it’s imperative that you take the necessary actions to close your loan properly or it may lead to a lot of unwanted expenses later. The closing of your Home Loan is the most important step in becoming the owner of your home and ensuring a debt-free living space.
Financiers like Bajaj Finserv offers Home Loans with features like nil foreclosure charges and part prepayment facility.
The Road to Truly Owning Your Home
Just as there’s a procedure for availing of a Home Loan, there is a procedure for closing a Home Loan. The last EMI is not the closure of your loan. It’s the beginning of the closure process. Closing a Home Loan involves a few simple steps. Let’s take a look.
Home Loan Closure: Important Points to Remember
If you are unaware on how to close a Home Loan, use the list below to follow through.
If you repay your loan well before the end of its tenure, it’ll lead to a loss of interest for the lender and you may incur a prepayment charge. But, if you’ve taken a loan from a financial institution like Bajaj Finserv, you can avail of their part-prepayment facilities without any extra charges or fees.
Obtain a No Objection Certificate (NOC):
An NOC is a clearance certificate issued by the lender assuring that all dues have been cleared. This is one of the most important documents to obtain while closing a Home Loan.
Retrieve Original Documents:
Take back all the documents that you submitted at the time of applying for the loan. Check for missing or misplaced documents and pages. If possible, visit the bank and retrieve your documents as a courier might be less reliable.
Retrieve Security Cheques:
You would have provided about 3 – 5 security cheques to the lender as well. Make sure you get these back to avoid any misuse.
Final Settlement Payment:
The final amount to be paid while closing the loan is usually higher than the regular payment because of the interest charges applicable for the final settlement cheque.
Remove Lien on the Property:
If a lender is doubtful of your credibility, they may create a lien to prevent you from selling your property. Have the lien terminated at the Registrar office. Changes may take about 7 – 10 days to reflect in registrar accounts.
Update CIBIL Report:
Ensure the lender or bank has updated CIBIL on the closure of your loan. It usually takes 20 – 30 days to complete the update. The entry must be closed for you to get a healthy credit score.
Obtain an Encumbrance Certificate (EC):
An Encumbrance Certificate is a document listing all financial transactions on your property. Once the loan is closed, it should reflect in your EC. This will complete the Home Loan closure.
Get Legal Clearance:
This is an optional but handy step. A legal clearance from a lawyer will help you when you plan to sell the house. It is also a useful document to have when showing that your loan has been closed completely.
While these 9 ways to close your Home Loan cover most of the things you should keep in mind, they may differ slightly from vendor to vendor. Make sure to complete all formalities and procedures to keep your finances intact and avoid any difficulties on the path to owning your home.