A loan's life cycle involves two key steps: loan approval and timely repayment. However, after repaying your loan, it's crucial to complete the closure procedures. This includes obtaining an NOC for loan from your lender. A personal loan NOC letter is important as it serves as proof that your loan has been fully paid off and no further dues remain.
What is NOC?
No Objection Certification (NOC) is a legal document, which clearly states that a borrower has made a complete payment of his loan amount and has settled all the outstanding debts to the lender. As the name suggests, It is issued at the end of the loan tenure. In legal terms,
an NOC is required to consider your loan tenure as officially completed. A loan NOC letter includes your name, loan data, the closing date, and a declaration that the whole loan outstanding, interest included, has been paid off by the borrower.
A NOC confirms the full repayment of the loan, including interest, marking the official completion of the loan. To estimate your loan interest and manage payments better, use the interest calculator to determine the exact amount you need to pay before receiving the NOC.
What is the importance of a No Objection Certificate?
NOC primarily suspends the lender's rights to possession of any collateral (if any). It formally ends the cycle of loan repayment and protects the borrower from further legal consequences.
Here are a few reasons why a loan clearance certificate is important:
- The submission of the personal loan NOC to CIBIL or other credit bureaus nearly guarantees a healthy credit score.
- It shields you from potential legal difficulties that can occur if there is any misunderstanding regarding the repayment of a personal loan.
- Finally, it serves as evidence that the personal loan has been paid off and the borrower is no longer required to make any payments to the lender.
What are the consequences of not having a NOC?
There may be legal and financial consequences if a loan closure is not completed with the collection of a No Objection Certificate. Here are a few of them:
It affects your credit score
A NOC letter is crucial for your credit score, just like making timely payments on your EMIs. Without a personal loan NOC, you risk damaging your credit, making it difficult to secure future loans. To manage your EMI effectively, use the Personal Loan EMI Calculator.
Causes a monetary loss
In some cases, if you fail to collect your loan clearance certificate, it can lead to much confusion and there are chances that the lender might ask you for the outstanding amount that you may have already paid.
Causes a legal issue
Without a loan NOC letter, you do not have legal proof that you have paid your debts, and the firm that lent you the money can sue you for not paying on time. Therefore, spending a few minutes of your time for following up with the lender until receiving the document will help you in preventing the legal issues in future.
How to get your personal loan NOC letter online with Bajaj Finserv?
You can download your NOC statement by visiting our customer portal – My Account on Bajaj Finserv website.
- Sign-in to visit our customer portal.
- Use our two-factor authentication and enter the OTP to sign-in.
- Visit the ‘Document Center’ section to select the loan for which you want to view the NOC letter.
- Click on ‘No Objection Certificate’ to download it.
What should an NOC letter include?
A Personal Loan NOC letter is an essential document that confirms your loan has been fully paid off. It should include the following details:
- Borrower’s name and contact Information: Full name, address, and loan account number.
- Loan details: Amount borrowed, EMI paid, and loan tenure.
- Lender's details: Lender’s name and contact information.
- Loan closure date: The date the final payment was made.
- Acknowledgment: A statement confirming the closure of the loan and no outstanding dues.
- Signature of authorized personnel: The lender’s representative who issues the NOC.
This document is crucial for your financial records and future credit needs.
Conclusion
Obtaining a personal loan NOC is essential for confirming that your loan is fully paid off and preventing future legal or credit issues. It ensures that there are no outstanding dues and helps maintain your credit score. Always complete the loan closure process by securing the NOC from your lender. For more details on personal loan eligibility criteria and personal loan interest rate, ensure you check with your lender to avoid complications.
