April 18, 2024


Savvy business masters

Know About Personal Loan NOC & Why it is Important!

Importance of NOC when you pay off the home loan | IDFC FIRST Bank

The era of digitalization is all about simplified finances. Be it transferring funds or paying for your essentials, investing in stocks, or applying for a loan, everything is possible with just a few taps. You can now apply for an instant loan online and the amount is credited to your account in a matter of hours. This has made financing very simple and easy. However, there is still a wide gap in the common people’s financial knowledge that often leads them to a financial mess. 

Using a credit card or applying for a loan are not bad ideas, rather many rich people use these financial tools to create wealth. But the only difference is that they possess an in-depth knowledge of these financial tools which allows them to make the most out of it. One such term that you must know about if you are thinking of availing a loan is the NOC letter.

After the closure of your loan, you need to ask your lender for a NOC letter. A NOC letter is a very crucial element of your loan procedure. You must get your personal loan NOC letter as soon as you have made the full payment of your loan. 

Today, in this post, we are going to give you all the necessary information about what a NOC is and why it holds so much importance. 

What Exactly Is a Personal Loan NOC?

A No Objection Certificate, often known as NOC, is a legal document, that certifies the full repayment of your loan. A NOC is also referred to as a No Dues Certificate, as it makes it evident that you have paid off all your outstanding loan dues. Once your loan cycle is over, your lender will deliver the personal loan NOC letter. In that letter, you will find some crucial facts about your loan, like your name, terms, the date when the loan was paid off, and other details. 

A NOC verifies that you are free from the liability of making your monthly EMI payments. That you have paid off your EMIs and all fees associated with your loan, denoting a full closure of your loan formally.

What Information Is Stated in a Personal Loan NOC?

Once your loan has been paid off, it is essential to get the NOC from the lending company that made the original loan. There are a few crucial clauses in any NOC for a personal loan. Here is a list of those important statements:

  • Your Name
  • Details of the Loan
  • Date when your loan was closed
  • A statement specifically declaring that the whole loan balance, together with interest, has been paid fully.

You should note that if the lender has received the relevant paperwork, a Personal Loan NOC letter waives all their claims to ownership of the security. Generally, the personal loan NOC certificate is sent to the borrower’s address by banks, NBFCs, and other regulated lending institutes.

What Are the Benefits of NOC?

A no-objection certificate is a document that aids in resolving any disputes and legal snags; that can develop in the future about loan repayment. Also, a NOC sent to the credit bureaus guarantees a good credit rating.

What Is the Significance of NOC?

Here’s a list of reasons why NOC is important, and why it is critical to obtain a loan NOC from your lender:

  1. Eliminates The chances of Legal Consequences

If you do not have a NOC, you can face the danger of running into legal issues. A lender may file a lawsuit against you for late repayment if there are contradictions. At times like this, the chances of winning the case go down, due to the lack of supporting evidence. In the worst-case scenario, a lender can also ask you for a reimbursement amount that was already paid earlier. To avoid this situation, take as much as time you need but do not forget to take follow up on your NOC with your lender.

  1. Protects Your Credit Score

Your creditworthiness might be seriously harmed if your repayment information is out of date. You could find it challenging to obtain a loan in the future. On the other hand, a NOC shows favorably on your credit record. You may update your credit history and secure a high credit score by submitting your loan NOC to credit bureaus. 

  1. Documents the Loan Paid Amount

You have no record of your payments without the NOC. It serves as official documentation indicating all past-due amounts have been settled in full and that the borrower is no longer liable for repayment. Failure to collect your loan NOC might result in problematic circumstances. For instance, your lender can inadvertently request that you pay back past dues. In such cases, it can get difficult to demonstrate that you have paid off your loan. Therefore, we recommend that you collect your NOC from your lender. 

  1. Assists You in Applying for a Balance Transfer

A NOC from your current lender is required if you wish to apply for a balance transfer. Your new lender will be unable to begin the balance transfer process without a loan NOC. You must ask your current lender to furnish you the NOC and if the terms and conditions are met then there shall be no issue in getting one.

How Do I Obtain a NOC?

Receiving a loan NOC is as simple as applying for a loan on a personal loan app. You should keep in mind that you may only apply for a loan NOC once you have fully repaid your loan. Now, have a look at the processes outlined below to assist you with obtaining a NOC.

  • You must first inform your lender that all your installments have been paid by your every month.
  • Your lender will then ask you to provide the necessary documents like your identity proof, address proof, loan-related documents, and loan statements that include information about the EMI that you have paid for repayment of your loan.
  • For your lender to verify data such as your account number and identification, you must send a check and ID proof.
  • Once your loan account is closed after the submission of the required documents and completion of formalities, your lender will issue you a loan NOC.


We understand how much effort you put into repaying your debt. It would be devastating to see it all go down the drain just because you failed to request a NOC letter from your lender. 

Although issuing a NOC is the lender’s responsibility, they frequently forget to do it. So, after the full repayment of your instant loan online, make sure you have applied for the NOC and stored it carefully in your records if you had a loan in the past that you have finished and paid off.