Loan NOC letter – Know why NOC is Needed and How to Get One

Most borrowers do not know what is NOC – a No Objection Certificate is a legal document provided by a financial service provider stating that there is no outstanding amount remaining and the loan is completely repaid.



Why is an NOC needed?

The No Objection Certificate is essential after loan closure due to the following reasons –

  • If an individual applies for a new loan without an NOC, there is no legal proof whether the applicant has already set off their dues or not.
  • An NOC increases chances of future loan eligibility.
  • It provides a statement from the financial institutions, which keeps the borrower legally protected and reduces ambiguity during the sale of the property.
  • The certificate removes the lien from the property.
  • An applicant should keep in mind the what, why and how of an NOC to know everything about such a document.

How to avail an NOC?

To avail an NOC letter, an individual needs to request the financial institution for the same after the home loan is paid in full or foreclosed, unless it is already provided in the first place.
The No Objection Certificate is mandatory after loan closure as it protects the borrower from any further hassles. Also, financial institutions will not be able to make claims for any additional payments.

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