Home Loan Closure Process

Your home loan closure process starts after paying the last EMI. In an ideal world, you should get all your property documents, NOC, Lien removed automatically and a Thank you note sent from the Bank.

Before this article turns into ‘fine prints’, here are the main things to know before signing the Bank’s acknowledgement letter.

Home Loan Closure Process

After your last Home Loan EMI, you need to send a written letter/application for return of original documents. Mention having paid the EMI with no dues left. You may also attach proof of last EMI payment.

It is good practice to mention the list of documents you expect the bank to return.

Get an acknowledgment receipt of loan closure application from your bank. Banks take 7-10 days to respond to closure requests.

Tasks for Home Loan closure

1). Original Property Documents

Collect all your original documents (In original condition) from Banks. Here, is a handy list of documents to refresh you.

Why it’s important?

The original documents with House Loan Interest Rates will be required to prove your ownership and also when selling the said property. Make sure to receive/check all the documents you had given at the time loan disbursement.

How to do this?

Your home loan bank has all your property documents. They are responsible for returning it to borrower. Please make sure that banks Do Not hand over property documents to builder as it because further inconvenience and running around.

2). Home Loan NOC

If you have paid for it, you should get a receipt for it. NOC (No Objection certificate Or No Due certificate or) at home loan closure is the proof that you have completely paid the loan and property is debt free. (Interest + principle). Look for this line in your Bank’s NOC letter.

The address of property and account details of borrower/s should be mentioned in NOC.

Why it’s Important?

NOC letter is loan clearance letter. This states that property is now debt free and bank has nothing to do with it. NOC is required for property resale. NOC is also beneficial in updating your credit score

How to Do this?

Your Bank is responsible for giving you NOC. Your job is to ask them or insist on it.

3). Remove Lien

A Lien is a transaction registered in Registrar Office against the property. Banks do this to prevent the borrower from the selling the property before paying back loan.

Why it’s important?

Once cannot sell the property with a lien registered against it. Also, the lien transaction suggests property is not completely yours.  This is a very important process and takes 10-14 days.

[Source: https://loaneasy.in/home-loan-closure-process/]