Why should you collect an NOC for Loan closure?
Getting a loan is a very simple task these days. With Bajaj Finserv, you can apply online for a loan, and get it approved within minutes. Buying your dream house or your dream car has never been easier! However, after you have repaid the loan, it is critical not to neglect the loan closure formalities. You must remember that the procedure to close is as important as applying for a loan.
What is NOC for Loan Closure?
NOC stands for No Objection Certificate. It is a legal document which clearly mentions that you, the borrower, have paid all outstanding dues to the lender. The certificate has your name, your account number, and the address of your property. The NOC also certifies that the lending institution no longer has any legal rights or claims over your collateral.
Why do You Need an NOC?
To help you understand the importance of NOC for loan closure, here is a look at how it affects your financial health.
– If the NOC is not issued and submitted to CIBIL, then your credit history will show that you have an unpaid loan in your name. This will certainly affect your credit score negatively, thereby undermining your creditworthiness for future loans. Make sure that you always have your CIBIL records up-to-date.
– If an NOC is not issued, the financial institute that has lent you the capital may not have a record of your loan closure. Many years from now, you may suddenly receive a letter asking you to repay the so-called outstanding amount. An NOC will save you from this potential future headache.
– Some financial firms may go a step further, and take legal action against you for not having settled your dues. An NOC is legal proof that you have made all your payments on time, and that the lender cannot take any legal action against you.
NOC Format for Loan
Let us now look at the steps that should be followed in order to get your NOC.
– One you have completed all your outstanding loan payments, you have to write a letter to the lender to ask for the return of all your original documents, invoice copies, and an NOC. Usually the documents and the NOC are returned to you within a few working days.
– If you had taken a loan from Bajaj Finserv, then simply login to your online customer portal, view your loan details, select NOC, and download the document. It’s as simple as that! You can also choose to have it forwarded to your registered email id.
– If you had taken a home loan on an unregistered real estate property, then the procedure is the same as above. However, if the property is registered, then you and a representative from the financial institute have to go to the Registrar of Properties office together to get the lien removed and to get an NOC for home loan.
– In case of a car loan, the financial firm will issue an NOC, as well as an RTO form (Form 35). These need to be submitted to the Regional Transport Office and to your car insurance company.
Though it is the duty of the lender to issue an NOC, often financial firms do not take this responsibility seriously. As a borrower, you should definitely ensure that all the loan closure steps are diligently followed. That’s why it makes sense to team up with a firm like Bajaj Finserv that allows you to access all your documents online.
Remember that tying up loose ends is always a good idea. It ensures that you don’t have any financial ghosts from the past haunting your peace of mind in the future.