The NOC features a list of vital information, including the property address, date of last EMI payment or the date of home loan account closure, the home loan account number, etc. Once you receive this critical document, you can be assured that you are the legal owner of the said property.
Importance of getting the NOC after repaying the home loan
- Getting back the property ownership documents
When you apply for a home loan, you must submit several documents to the lender. This includes income certificate, and property-related papers, which remains in the lender’s possession until the end of loan tenure.
When you repay the full amount, you must apply for an NOC and get back all the property ownership documents. You must then submit a copy of the NOC to the registrar’s office to strike off the hypothecation.
If you fail to do this, the lender will continue to be the legal owner of the house and you may not be able to sell it in the future. The NOC is vital to get the full legal ownership of the property. Further, in the event of any accident or damage to your house, without an NOC, the insurer will pay the claim amount to the lender and not to you.
- Helps you improve your credit score
When you apply for any loan, be it a home loan, or a car loan, the financial organisation will consider your credit score to determine your eligibility. Your credit score gets affected if you have an ongoing loan, especially if you miss paying the EMI.
Once the loan is paid off completely, you can update the credit score stating that you don’t have any outstanding dues. And to support your claim, you must have an NOC from the lender.