Paid the last instalment of your home loan EMI? Do not forget to collect these documents from your bank

Paying off your home loan is undoubtedly a moment to celebrate. After years of paying a significant portion of your income in EMIs, you now have something that you can truly claim as your own. But before you celebrate, there are a handful of things that you should do once you pay your last home loan EMI.

When you take a home loan, be it from a bank or NBFC, you have to submit several documents, including the original registered sale deed, allotment letter, or buyer agreement, NOC from the builder or housing society, approved building plan and permit from local authorities and Encumbrance Certificate (EC). Once you pay off the loan, make sure that you collect the original documents back. Make sure that the bank/ NBFC has returned all the documents in good condition, with all the pages intact.

As per the RBI guidelines, banks and financial institutions must release all original property documents within 30 days of loan closure. If there is a delay from the lender beyond this limit, they are liable to pay a compensation of ₹ 5,000 per day to the borrower.

Do not forget to get a letter from your bank/ NBFC stating that your home loan is fully repaid and that you are not liable for anything pending.

Similar to the closure letter, the No Dues Certificate (NDC) from the lender acts as an official confirmation that all your EMIs have been paid and that the lender holds no further claims or legal rights over your mortgaged property. According to HDFC Bank, the NDC should mention the critical details related to the housing loan, including the address of the property, name of the customers, loan account number, amount of loan, and date of starting and closure of the loan.

Get an updated Non-Encumbrance Certificate, which is a legal document containing detailed records of all financial transactions related to the property, from your respective registrar. It should reflect all transactions, including home loan details related to the property, to ensure that no one can, in the future, falsely claim ownership of your house.

It is a common practice by banks and other lenders to put a lien on the property for which a loan is sanctioned. This is to ensure that the property owner does not indulge in any unauthorized sale while the loan is still outstanding. Once you fully repay the home loan, make sure that you get the lien removed and you have the full right to sell your property in the future.

Once you repay the home loan, make sure that it is reflected in your credit bureau reports and your credit score . The process is usually automated and the loan closure is reported to the credit bureaus by the lender, and it gets reflected in the subsequent update. One thing to keep in mind is that the records show that the loan is ‘closed’ and not ‘settled’ if that is not the case.

Bobins loves telling the human side of all stories, from the intersection of geopolitics, international relations, and conflicts around the world. In his nearly one-and-a-half-decade career as a journalist, Bobins has covered South Asia, the Middle East, and North America, from elections to mass protests and conflicts.