Home Loan Closure Checklist

It's an overwhelming experience when you have paid all the EMIs of your home loan.

However, do not forget to pay close attention to the home loan closure process and remember to collect the necessary documents right after. The loan is legally not closed unless the lender declares it officially. Here’s a detailed home loan closure checklist that consists of that you can consider.

During the application process, you need to submit your original documents along with the collateral. The first and most important step in the home loan closure process is to collect all your original documents. Also, ensure that these documents are in good condition. The list of the original documents can include:

• Power of Attorney

• Sale Deed

• Loan Agreement papers

• Title Deed

• Possession letter

• Payment receipts (if any)
  

NOC serves as a proof that you have paid all the required EMIs against your home loan and there are no dues from your side. It also declares that the lender now has no legal authority on your pledged property.

The details present in the NOC include the lender's name, address of the property, settled home loan amount, and start and home loan closure dates. Since NOC is a very important document, it's advisable to keep multiple copies (hard and soft copies) for future reference.

The lien refers to the rights of the bank on your property till your home loan dues are cleared. Having a lien also acts as a barrier to the sale of your property. The lien allows the lending bank to recover the loan amount by selling your property, in case you default on your home loan EMI payments.

Therefore, once all your dues are cleared, the next step in the housing loan closure procedure is to get the lien revoked against your property. This helps you regain complete ownership of your property, and you can easily sell it according to your wish. To do so, visit the Registrar's office. Make sure to carry the required documents and that you are accompanied by a representative from the lender's side.

A Non-Encumbrance Certificate is basically a legal document that contains the details of all the financial transactions linked to your property. Once your home loan has been cleared, the next step in the home loan closure process is the updation of the Non-Encumbrance Certificate. Pay a visit to the Registrar's office and submit an application for the issue of an updated Non-Encumbrance Certificate.

The home loan closure process is not completed unless you receive the loan repayment statements from your lender/bank. The bank statement related to the home loan closure is also proof that all your dues are cleared. It helps you in case of any future disputes. If all the bank statements related to your home loan are not available with you, then the loan repayment process is usually considered to be incomplete.

Most banks make it mandatory for loan applicants to submit post-dated cheques when they apply for a housing loan. This is done for timely payments, if any monthly EMI is missed. If you have cleared all your loan dues and did not miss any EMIs, you should ask your bank to return all your post-dated cheques.

Home loan closure is a critical step that must be completed once your home loan is cleared. It is crucial to collect all the home loan closure documents well before time. If you are looking to apply for home loans, you can check the home loan offers at Bajaj Markets. You can benefit from the hassle-free application process, extended repayment tenures, and attractive interest rates.

After your home loan is closed, your credit records are updated by all the credit bureaus. Get access to the credit reports offered by all 4 credit bureaus in India - TransUnion CIBIL, Experian, CRIF High Mark, and Equifax. As per RBI guidelines, you can get this report for free once a year from all the bureaus. Check the reports thoroughly and make sure that the closure of the loan account is accurately reflected in the reports. This record has a direct impact on your credit score which is evaluated by lenders and other financial institutions when assessing your eligibility for a loan or credit card.