Why is NOC so Important?


Once a fund seeker gets the loan and pays off the EMI’s regularly, he feels relaxed because the debt has been paid off. But, this might actually get the borrower into a problem if he has not collected the NOC from the bank.

What is NOC?

No Objection Certificate (NOC) is also known as No Dues Certificate

An NOC or No Objection Certificate is a legal document provided by the lender which states that the loan has been completely paid off and there is no outstanding amount to be paid by the fund seeker as on a specific date.

Thus, it is very important to collect an NOC from the bank once the loan is completed.

Why Do You Need an NOC?

When you apply for a loan, you submit certain documents to the lender which remain in his custody until the closure of the loan. It is beneficial for the fund seeker to claim those documents once the dues have been paid.

Upon the closure of the loan, an NOC needs to be submitted to CIBIL so that they have the correct credit history. This is important because when an individual applies for a fresh loan, the CIBIL report should state that the fund seeker doesn’t have any outstanding loans.

If an individual wants to avoid future discrepancies, it is important for him to collect the NOC. Sometimes, some financial firms may take legal action against him for not having settled the dues.


Once the borrower has paid all the outstanding loan payments, he can write a letter to the lender asking him to return all his original documents, invoice copies, and NOC. Usually, the documents and the NOC are returned to an individual within a few working days.

If the borrower takes a Home Loan on an unregistered real estate property, then the procedure remains same as above. However, if the property is registered, then the individual and a representative from the financial institute have to go to the Registrar of Properties office together to get the lien removed and to get an NOC for Home Loan.

In the case of a car loan, the financial firm issues the NOC, as well as the RTO form (Form 35). These need to be submitted to the Regional Transport Office and the car insurance company.

Though it is the duty of the lender to issue an NOC, often, financial firms overlook this step. But the borrower should definitely ensure that all the loan closure steps are diligently followed. NOC helps in completing the process quickly.

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