A No Objection Certificate (NOC) is a legal document issued by a housing finance company or bank to a customer declaring that he/she has no outstanding dues towards the lender. Sometimes referred to as a “No Dues Certificate”, an NOC can be obtained from the lender once the loan has been paid off completely.

Once you have repaid all the dues for your personal loan, it is important to collect your NOC from the lender without fail. This step is extremely important because

Ensures Legal Security

Having the certificate is proof that the loan has been successfully closed and that you do not owe any money to the lender. This helps to avoid any legal discrepancies or misunderstandings with the lender.

Proof of Repayment

An NOC acts as proof that the dues have been cleared. It ensures that the bank can’t trouble you later with a notice stating that certain dues are pending.

NOC can Help with Credit Scores

In case the information about your loan closure is not updated in your credit report, you can submit the NOC to the credit bureau as proof and get your information updated.

Source: BajajFinserve, Bankbazaar
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