What To Do After The Closure Of Your Home Loan
You would prefer not to visit the branch of your lender once you have repaid your home loan. But this is not the only reason why a borrower must complete the loan closure process with great precision as soon as possible. We advise you do not rest till you are done completing the tasks mentioned below — because only after performing them your ownership over the property is legally established.
AT THE BANK
Take possession of all the papers
At the time of granting you the loan, banks keep all the original property documents, including sale deed and conveyance deed, with them and issue you a paper listing the submissions. At the time of repayment, ensure that you personally go and take these highly sensitive documents rather than the bank sending them to you by post. Do make sure that you have received all the papers you had submitted, and that nothing is missing.
Point to be noted: Your bank will ask you to sign on an acknowledgement document, declaring you have received all the documents from the bank's side. So before you sign the acknowledgement document do a double check of the papers, to avoid the headache of going to the bank again in case any of it missing.
Get an NOC
After receiving the original documents, you have to get from you lender a no-dues certificate. This legal document is known as an NOC (no-objection certificate) and helps you establish you have repaid the whole amount, and do not owe the banks anything. Banks are mandated to send this paper to you by post, but we advise you visit your branch personally and get the document yourself.
Point to be noted: Make sure this paper is duly signed and has the lender's stamp.
Get your CIBIL report updated
Again, your bank is supposed to inform the CIBIL about the closure of the loan and your credit report updated. However, they might not be in a hurry to do so after they are done doing business with you. In case you apply for another loan in future or a credit card for that matter, your new bank will evaluate your CIBIL report before granting you the loan or the credit card. This is why your latest credit report must reflect the date closed against your home loan.
Point to be noted: Your updated credit report should start showing within 60 days of the loan closure.
AT THE REGISTRAR'S OFFICE
Get the lien withdrawn
In case you have a weak credit score, your bank might have created a lien on your property. This means that your rights to sell the property are restricted. The lien is a legal document and a bank official will have to accompany you to the sub-registrar's office to get it withdrawn. It is of utmost importance that you complete the process fast.
Point to be noted: This process might take a week or so to get completed.
Get an encumbrance certificate
Now that the lien on your property is withdrawn, apply for an encumbrance certificate at the sub-registrar's office. This document is a record of all financial transaction over a property. This document would legally certify that you officially owe the bank nothing now.
Point to be noted: An encumbrance certificate is a guarantee that the property is now legally yours.