Everything you need to know about NOC in Home Loan

Have you just paid off your private mortgage? Don’t let your guard down just yet, since you may have one more important task to complete once you’ve paid off your entire mortgage.

The No Objection Certificate, or NOC as it is more often known. A NOC is a jail file that is provided by banks that provide domestic loans, such as IDFC FIRST Bank. A NOC simply says that the borrower owes the lender no outstanding debts. The NOC must then be presented to the property registrar. The lien of hypothecation is then best stricken off.

Let’s understand why a NOC is so important
  • You must submit numerous key financial papers to your banking institution when applying for a house loan. Throughout the loan term, your bank will have possession of these papers. Only when you’ve paid off your house loan in full can you get your hands on that critical paperwork. You may need to take out a second loan to pay off your house loan, and the lender may want additional security, such as gold or a life insurance policy. In such an instance, the NOC will assist you in recovering all of the collateral that you have paid against various house loans.
  • You must provide your credit score rankings to be eligible for loans, regardless of the type of mortgage you pursue. When you have an active mortgage, your credit score is impacted, especially if you miss an EMI payment. Once the mortgage is paid off, you can update your CIBIL report to reflect the fact that you have no outstanding loans. If you neglect to ask the lender for the NOC, your CIBIL rating will no longer be updated, making it difficult to qualify for another mortgage if you need one.
  • It allows future financial institutions to have a sneak peek into your financial situation.
  • You can obtain the legal paperwork for the properties you possess with the aid of this document.
  • A NOC aids in the removal of a lien on your property, allowing you to improve your credit score rankings.
  • You could also wish to apply for a few alternative loans in the future, such as an academic mortgage to help fund your children’s further education. If the training loan’s interest rate is high, the financial institution may also need you to provide some collateral. You might use your property as collateral in this situation. If you do not have the NOC, proving that you are the legal owner of your property, the training loan may be denied since the lender may believe you still have a high-interest loan to repay.

Disclaimer: The views expressed above are for informational purposes only based on industry reports and related news stories. PropertyPistol does not guarantee the accuracy, completeness, or reliability of the information and shall not be held responsible for any action taken based on the published information.


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