Every loan borrower has the determination to pay-off the home loan amount as soon as possible. But, paying off the last and final EMI [Equated Monthly Installment] is not enough to get away with the property papers kept in the bank custody. In fact, there are multiple formalities that you should complete to make life free from the financial assistance that was availed for buying a home.
1. Check & Take all Papers from Bank
At the time of disbursing the loan amount, the financial institution i.e. a bank takes all the original property documents, its sale and conveyance deed into its custody. Then they give you a list of documents you submitted with the bank.
So, keep this list handy and go to the bank soon after the closure of your home loan and get back all the documents. Make sure you check the list before leaving the bank premises. Also, don’t wait for the bank to send you these important documents by post as losing them can cost huge loss to you as a property owner.
Tip to Remember:
You will be asked to sign an acknowledgment regarding the release of all original documents by the bank. Hence, you are suggested to double check all the documents before signing this acknowledgment as once signed nothing can be said or done.
2. Get a No-Objection Certificate
Get a clear due or zero outstanding loan certificate from the bank and this commonly known as NOC [No-Objection Certificate]. This is a legal document which makes you free from the loan paying cycle and states that you have repaid the entire loan and now there is no amount due for the payment. Usually, the bank sends this essential document by post but you are suggested to visit the bank and take it from them as soon as your loan account is closed.
3. Get CIBIL Score Updated
The bank is responsible to update the CIBIL body about the closure of your loan account. But, of course, no financial institution takes it at the utmost priority once their business is done with you. Hence, it becomes your responsibility to get the credit score update with the CIBIL authority and for this, you might require a bank official to accompany you to the sub-registrar’s office.
Well, a bank keeps a home loan borrower in lien as it prohibits the person from selling that particular property. This action is usually taken if the credit score of the borrower is poor. So, if this is the case with you then get the records updated about the same with the concerned authority.
This process might take a week’s time but will make your eligible for borrowing a loan in future.
4. Avail Encumbrance Certificate
This is a certificate issued by the local authority that clearly states that the property owned by you is free from debt and no person can establish his/her right over the property. In short, this document certifies you as the legal and sole owner of the property.