Ready to Close Your Housing Loan | Home Loan Closure Checklist
Just like you have to be very careful while taking a Home Loan, you should also be cautious when closing it. A Loan Closure checklist is included in this post to help you through the process.
The journey of repaying your Home Loan was long. Now that you are about to close your loan and become a proud homeowner, it sure is a moment worth remembering. But, amid all the celebrations, do not overlook the importance of the Loan Closing procedure.
Just as you must be careful while taking a loan, you should exercise the same level of caution to close a Home Loan. Here's a Home Loan Closure checklist that can help:
1.Request for all the original documents from the Lender
As Home Loan is a secured loan, where the property functions as collateral against the loan amount, the original property documents are with the loan provider throughout the loan tenure. After Home Loan Closure, the first thing you should do is request for all your original documents, like Title Deed, Sale Deed, Loan Agreement, and Power of Attorney, from the lender.
After receiving these documents, ensure that everything is in good condition and none of the documents are missing. As per the regulations, the loan provider should return the property documents within 15 days from the closure of the loan.
2.Collect NDC from the Loan Provider
After closing the Home Loan, your loan provider will give you an NDC (No Dues Certificate). This Certificate confirms that you’ve fully repaid the loan and the Lender no longer has any legal claim to the property.
Carefully check all the details, like your Name, Property address, Loan amount, Loan Account Number, starting and closing date of the loan, etc., on the Certificate to avoid any discrepancies.
3.Remove Property Lien
The Lender has a Lien or ‘Right to Possession’ on the property, to ensure that you are unable to sell the property, while the loan is still being repaid.
After Home Loan repayment, the lien can be removed by visiting the local Registrar’s Office. A Bank representative will also accompany you to the Registrar’s office to complete the formalities. Note that you’ll not be able to sell the property even after closing the loan, if the lien is not removed.
4.Get an updated Non-Encumbrance Certificate
The Non-Encumbrance Certificate of property has detailed information related to all the property transactions. For example, when a Home Loan is being repaid, the Certificate shows an outstanding loan on the property.
After the closure of the Loan Account, the Non-Encumbrance Certificate should be updated accordingly. This can be done by visiting the Sub-Registrar’s Office along with the NDC.
5.Update the Credit Score
It can take up to a month for your Lender to send the Closure of Loan confirmation to the Credit Bureaus, after which your Credit Score will be updated, accordingly.
After about a month, check your Credit Report to verify whether or not the score is updated. You can contact your Lender if the same does not reflect in your Credit Report, after a month.
Closing your Home Loan successfully
It took a lot of effort and time to reach the moment when you are about to close your Home Loan. However, being negligent now could result in consequences, in the future.
Keep this Loan Closure checklist handy to ensure that you don't miss any critical steps to close the Loan successfully.
Scroll to top