January 24, 2023
NOC in Personal Loans

Personal loans are relatively easier to obtain compared to other loan options. Lending institutions provide these loans to individuals to meet their short-term requirements with minimal documentation and quick disbursals. 

If you want to take a personal loan, know the facts involved with it. These include the loan application process, loan approval, obtaining a quick personal loan, and timely loan repayment.

The last step is obtaining the loan No Objection Certificate once the borrower has paid off all his EMIs.

After taking out a personal loan, borrowers will be responsible for more than just repaying the EMIs. Thus, recognize the meaning of a Noc certificate or letter and its function in loan settlement. 

What is a NOC letter? 

An official document from the lender known as a NOC (No Objection Certificate) certifies that the borrower has fully returned the loan amount and interest.

Note that it is crucial to obtain this NOC paperwork from your lender whenever a debt is paid off.

How can I obtain the No Objection Certificate, and when?

A lender sends the Noc certificate to the address on your file once you have repaid your debt. 

Some people might not be aware of it and lose out on it for various reasons. 

In that case, get in touch with the lender and specifically ask for the NOC. 

By doing this, borrowers will be legally protected and can provide the NOC if the lender claims that the loan was not repaid in full. 

What documents are required for the NOC?

Obtaining a NOC letter necessitates the following documents: 

  • Address and ID verification 
  • Proof that you have paid all of your loan installments 

After the borrower repays the loan, lenders mail the NOC letter to the address specified on the loan registration form. To prevent complications in the future, borrowers must request the NOC letter if their lender does not provide it.

What occurs if there is no letter of NOC?

If you do not have the NOC, you lack the documentation proving your payment. 

  • Waste of Time and Effort 

Borrowers can be requested to pay back the money they have already paid in full. They might waste significant time and effort trying to convince the lenders that they have paid off the debt since they do not have the documentation of their payment. 

  • Credit Rating is Impacted

The borrower’s credit score may suffer if they lack a NOC, and their chances of getting a loan in future can be adversely impacted. 

  • Legal Challenges

The lender may sue the borrower because they lack documentation that they have paid back the debt.

  • Emotional Exertion

When borrowers get calls from recovery agencies or find themselves in a sticky situation where they need a NOC to show their loan payments but do not have one, it could cause undue stress. 

What is the importance of NOC for loans?

It is crucial to get your Personal loan NOC from the lender as soon as you have paid off your loan obligations because of the following reasons:

  • Possessing the certificate is evidence that the loan has been concluded and that borrowers have paid the lender any outstanding amounts. It helps eliminate any legal ambiguities or miscommunications with the lender. 
  • A NOC serves as evidence that the fees have been paid. It assures that the lender will not subsequently bother borrowers with a notification that some dues are still pending. 
  • If the information in your credit report concerning your loan closure has not been changed, you can provide the NOC to the credit agency as proof and get your information amended.

A No Objection Certificate, also known as a No Dues Certificate, is a legal document that certifies that a loan has been entirely returned. When your loan is completely paid off, it is crucial to be proactive and ask your lender for a NOC if they have not already provided one.

Before opting for a personal loan, choose a reliable lender and compute the EMIs on the personal loan EMI calculator to make an informed decision.  

With Fullerton India, applicants can acquire personal loans up to Rs. 25 lakhs, with flexible repayment tenures at the lowest personal loan rates and a quick loan disbursal with minimal documents required for a personal loan.


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