Obtaining personal loans has become hassle-free in the 21st century. Various banks and financial institutions and even dedicated private corporations have made the process quite convenient for both salaried as well as self-employed individuals.
One can easily apply online and receive the required amount of personal loan in their bank account without any kind of problems. The repayment process is quite simple too. However, the journey of availing a personal loan does not end here. Successful closure of a personal loan requires the completion of various formalities. Obtaining a NOC is one such step that must be fulfilled for the complete closure of a personal loan with a lender.
First, let us understand what NOC is?
A no-objection certificate or NOC is a dedicated document that is delivered by the lender of a personal loan. It serves as an important legal document that signifies the closure of the personal loan as granted by a professional public or private lending company. The lender send this document after all the necessary outstanding dues related to the personal loans have been fulfilled and completed.
The document consists of all the necessary details and serves as proof of closure of the personal loan amount and payment of all the necessary dues. The details are as follows:
- Loan and interest amount
- Dates of repayment and closure
- Personal details of the payer including permanent address and name etc
The no due certificate is issued and mailed by post signifying the end of the personal loan and payment of necessary EMI dues as well.
Now we must understand the reasons and benefits behind taking the NOC after the closure of the loan.
Why is it important to obtain a NOC?
1. To protect the credit score:
The credit score of an individual defines his or her financial stability. The overall loan taking, and repayment capabilities are judged through the credit score of an individual. Banks and financial institutions offer a loan based upon the credit score of an individual. Obtaining a NOC signifying completion of all the formalities and payment of dedicated dues of previous loans is essential to protect the credit score. The repayment information and other dedicated details in the NOC are updated necessary for maintaining a favourable credit score.
2. Preventing any kind of legal obligations:
A no-objection certificate serves as proof for individuals who have taken loans from a public or private lender. In case of any legal obligation or discrepancies with the lender, NOC serves as proof that can save individuals from any kind of financial repercussions. Therefore, to save oneself from any kind of future hassle, one must obtain a NOC after completing all the necessary formalities and payment of dues.
3. Saving oneself from financial loss:
In case of any discrepancy with the lender, an individual may be required to pay the already paid personal loan amount. A NOC helps in preventing such circumstances and serves as proof that it can prevent future losses easily.
4. Legal proof:
NOC serves as legal proof that one must accompany in case of any discrepancy with the income tax department. The certificate must be presented to designated authorities to prevent any future inconvenience and problems.
5. Preventing emotional distress:
Emotional exhaustion and distress caused due to repeated pestering from the banking authorities due to non-payment of dues can be prevented through a NOC. The lending authority has to be provided with a NOC that can help in saving you from the stress caused by the banking authorities for their own mistake.
6. Rectification of errors:
Any kind of error in the records of lending authorities like a bank can be easily rectified only by furnishing a NOC. A mistake regarding non-payment of a due amount can be corrected only through a no-due certificate.
7. Easy processing of future loans:
A NOC even helps in the faster processing of future loans taken from the same financial institution. The lending institution will accept the future loan amount application after NOC for the previous loan is furnished on time.
These aspects make obtaining a NOC a necessity. Money View is a professional organization that offers faster personal loan processing services and makes the process of obtaining personal loans hassle-free. The company delivers the necessary amount of personal loans with convenience. It even completes dedicated formalities like furnishing the NOC certificate to its customers in time as well.
Related Article: What Happens If Personal Loan is not Paid in India
Documents Required for NOC
There aren’t specific documents that need to be submitted to the bank for getting this certificate. However, if you end up misplacing the document and have to apply for it again, you would need to submit the below-mentioned documents to the bank officials:
- A copy of the FIR
- The details of the loan availed
Usually, banks and NBFCs send the NOC to the address mentioned in the loan application form after you complete repaying the loan amount. However, that is not always the case, so you must be proactive in this regard.