What is a No Objection Certificate?

Paying off your EMIs isn’t the only responsibility you will have after availing a personal loan. You also need to understand what an NOC letter is and what role it plays during the loan settlement. If you are thinking of opting for a personal loan, you should know that the entire process takes place in four steps - loan application, loan approval, receiving the instant personal loan, and the timely settlement of the loan.

Once you are done paying all your EMIs, the final step is collecting your loan No Objection Certificate (NOC). This guide delves into what is an NOC and how you can obtain it from your lender.

What is an NOC in banking? 
 

An NOC letter is a 'No Objection Certificate' from a bank upon the closure of your loan. The lender issues an NOC letter stating that all outstanding debts have been paid in full and that no other payments are due on a specific date. 

In other words, the formal conclusion of your loan repayment cycle is marked by a personal loan NOC letter from your lender. It eliminates any future legal ramifications from your debt.

Importance and advantages of an NOC letter
 

Here’s why having an NOC letter is so important -

• An NOC letter serves as official proof that you have fully repaid your personal loan and no outstanding dues remain.
• Once issued, credit bureaus update their records, thus having a positive impact on your credit score.
• An NOC also helps in showcasing responsible credit behaviour, which can help you avail future loans or credit cards.

Types of loans that require an NOC letter
 

NOC letters are typically required for secured loans like home loans, car loans, and personal loans. These documents confirm the closure of the loan account, protecting you, the borrower, from future claims by the lender and securing asset ownership. 

How and when do I get the No Objection Certificate from IDFC FIRST Bank? 
 

Typically, once you repay your loan, an NOC letter is sent to your registered address. However, it is not uncommon to overlook this document or miss receiving it due to various reasons. Therefore, if you do not receive the NOC, it is crucial to proactively contact the bank lender and request the document directly.

Below are the steps to get your personal loan NOC

1. Via customer portal:
 

Step 1: Log in to your IDFC FIRST Bank customer portal.

Step 2: Navigate to the 'Statements' tab under 'Closed Loans'.

Step 3: Locate and download the No Objection Certificate (NOC).

2. Via email:
 

Step 1: Compose an email requesting an NOC for your personal loan.

Step 2: Send the email to IDFC FIRST Bank's customer support address.

3. By mail:
 

Step 1: Submit a request letter for your personal loan NOC.

Step 2: Mail the letter to your nearest IDFC FIRST Bank branch.

What are the documents needed for the No Objection Certificate?
 

The following documents are required to obtain an NOC letter:

• Identification and proof of address
• Evidence that you have settled all your loan instalments

What happens in the absence of an NOC letter?  
 

An NOC letter is a critical document that confirms full repayment of your personal loan. Failing to obtain it could lead to several complicated situations:

• Without an NOC, it is difficult to prove that you have fully repaid your debt. This could result in your lender mistakenly pursuing you for outstanding dues.
• The lender might initiate legal proceedings and defending such claims could be challenging for you in the absence of an NOC letter.
• If the loan closure is not reported to credit bureaus, your personal loan may reflect an active or an unpaid loan, negatively impacting your credit score and making it harder to avail future loans.

What to do if you lose your NOC letter?
 

If you lose your NOC letter, you must immediately contact your lender and request a duplicate copy. You may have to submit a written application, provide ID proof and share loan details for verification. Make sure that you follow up until you receive your duplicate copy, as the NOC is a crucial document for updating your credit history and preventing future disputes.

Act now! Don’t forget these NOC essentials
 

An NOC is more than just random paperwork – it is proof that you have fully repaid your loan. Because it plays a key role in maintaining your credit score, you need to make sure you handle right with some quick tips:

• Proactively follow up with your lender within a week of loan closure
• Ensure that your NOC clearly mentions your loan account number, loan type and confirmation of full repayment
• If you have moved, inform your lender to avoid the NOC being sent to your old address
• Store the NOC securely as you may require it later

Conclusion
 

An NOC serves as proof of your personal loan’s official closure. This certificate is key in safeguarding you from future liabilities, which is why you need to request for one after completing your loan tenure. IDFC FIRST Bank provides digital access to this document, helping you seamlessly close your loan without any hassles.