15 NOVEMBER, 2019

You feel nothing but relieved at the time of paying your last home loan EMI. This is the moment when you are free from financial liability and become the owner of your dream home. You need to collect every relevant home loan documentation while closing your loan. Along with original deed and other property documents, you also need to take No Objection Certificate (NOC) in your custody.

Why collecting NOC is important?  

Clearing the financial liabilities of home loan

NOC is a documental proof issued by a housing finance company or bank that confirms that you have repaid your entire home loan amount. It is the certificate that declares that you have no outstanding dues towards the lender. It is also referred to as No Dues Certificate, which resolves the lender’s rights on collateral.

Getting all rights on the property

You have to face various problems if you fail to obtain your NOC while closing a home loan account. You have to submit the NOC to the registrar of properties in order to obtain the hypothecation struck off. If you fail to do so, you cannot sell the property in the future as the lending institutions continue to keep the rights of your property.

Property Insurance

Getting NOC is crucial for your property insurance. As after submitting NOC, your insurer will pay you against the claim made after any destruction caused to your property. If you fail to submit the NOC, then these payments are made to the lender.

Improved Credit Score

When you get the NOC from the lender, its positive effects are reflected on your credit score. NOC is a sign that the home loan is paid off, which eventually improves your credit score and helps you by increasing your eligibility for future loans.

How to get NOC?

Lending institutions provide all the information regarding getting a NOC on their website to help their customers and to help first time home buyers. Generally, the home loan provider is supposed to give you the NOC through the registered post once you pay the last home loan EMI. However, there are instances when the customers haven’t received their NOC due to delayed dispatch or different address or in any other circumstances. In such cases, you have to contact the bank or delivery services to obtain NOC.

It should be clearly mentioned on the NOC that the lender has approved to release the original title deeds of your house as you have repaid your entire home loan and closed the account. It should also contain comprehensive details of your property, such as an address, survey number, nature of the property, etc. Lastly, you need to confirm that NOC has your loan account number, the start date, and the closing date of the loan.

What happens if someone misplaces NOC? 

In such a case, you need to lodge an FIR about the lost NOC. Then, you have to request the lender to give you a copy of NOC. For this, you need to submit the copy of FIR along with loan details. The lenders take some time to provide you with the copy, so you need to follow up on them to get your NOC.

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Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.