No-Objection Certificate

As soon as you pay off your entire home loan, you need to do an important task and that is to collect your No Objection Certificate from your bank. It is essential to collect this document as it declares that there are no outstanding dues towards the lender. The NOC needs to be then submitted to the registrar of properties. Only then, your property gest removed from the lien. Here is everything you need to know about the No Objection Certificate and its significance in home loans.

What is a No Objection Certificate?

NOC is abbreviated as a No Objection Certificate. It is a legal document which the bank or financial institutions issues to you once you have repaid your home loan in full. You need to repay the principal amount loaned by your bank along with the interest levied on it to get hold of this certificate. 

Contents of No Objection Certificate

The home loan NOC document is issued by your financial institution and bears crucial information like your name, your loan account number, the address of your property, and the date of loan closure.

Why is NOC important and why do I need to apply for it?

A Home loan NOC is important because of the following reasons-

  • With the help of this document, you get the hold of the legal documents of the properties you own.
  • When you apply for a home loan, you need to submit several important financial documents to your financial institution. These documents remain in your bank's custody throughout the loan tenure. You can get your hands on those crucial documents only after paying your home loan in full. Sometimes, you may need to take a top-up loan as well to repay the home loan, and the lender may ask for more collateral such as gold, life insurance policy, etc. In that case, the NOC will help you to get back all the collateral paid against the various home loans.
  • A NOC helps in removing the lien from your property, thereby, aiding you to improve your credit scores.
  • Whatever type of loan you apply for, you need to provide your credit scores to be eligible for loans. Your credit score is affected if you have an ongoing loan, especially if you default on EMI payment. Once the loan is paid off, you can update your CIBIL record stating that you do not have any outstanding loans. In case you ignore asking the lender for the NOC, your CIBIL score will not be updated, making it difficult for you to be eligible for another loan if you need one.
  • It allows future financial institutions to have a sneak peek into your financial health.
  • You may need to apply for some other loans in the future, for example, an educational loan to sponsor your children’s higher education. Now, if the value of the education loan is high, the bank may ask you to provide some collateral. In this case, you can put your home as collateral. In case you do not have the NOC, stating that you are the legal owner of your home, the education loan may get rejected, as the lender may think that you still have an ongoing, high-value loan to repay. 

How is the No Objection Certificate transferred?

Let us understand the No Objection Certificate transference procedure-

  • You need to reach out to your financial institution and apply for the No Objection Certificate transference by filing a simple form.
  • Post filing the form, the financial institution will accept your application and review the status of your loan.
  • After that, the lender will mail the NOC to the address listed in your home loan application/NOC form (if you have moved to another address).
  • In case you do not receive the certificate within a month, you should check with your financial institution about its status.