Bank Loan Rule: People are often cautious while taking a loan, but are not as careful while closing it. Ignoring the correct procedure and rules can cause trouble in the future. It is important to keep some things in mind while repaying the loan or closing it on time so that there is no problem later.
How much will be the charge for repaying the loan before the scheduled time-
Many banks and NBFCs charge foreclosure fees for repaying the loan before time. Although there is usually no penalty on home loans, it can be from 1% to 5% for closing car and personal loans early. Be sure to check this charge before repaying the loan.
Do not forget to get an NOC certificate-
NOC (NO Objection Certificate) is proof that you have repaid all your loans and there is no outstanding now. It confirms that the bank or NBFC no longer has any claim on your property or documents. This document is necessary to avoid any trouble in the future. All the details in the NOC should be correct including your name, address, loan account number, and loan closure information. Check all the information carefully before getting it.
Take back all the original documents-
When you apply for a loan, especially for a home loan, the bank asks you for many important documents, such as a sale deed, conveyance deed, power of attorney, canceled cheque, etc. Therefore, after the loan is closed, you must take back all the important documents that you had submitted earlier.
Get the lien removed-
Often, the bank or financial institution giving the loan puts a kind of mortgage on your property so that you cannot sell it. After repaying the home loan, you will have to go to the registrar's office with a bank employee so that the lien is removed from your property. For a car loan, you will have to go to the regional transfer office so that you can remove the mortgage process.
Make sure to check your CIBIL score update-
It is the responsibility of the bank and loan-giving companies to update your loan repayment information in the CIBIL database. However, sometimes banks delay doing this. Due to this delay, the loan that you have already repaid may also appear as outstanding in your CIBIL report. This mistake can cause you trouble in taking a new loan. Therefore, you should keep checking your CIBIL report regularly. If you see any mistake, contact the bank immediately and ask to get it corrected.
Closing the loan account or repaying it before time requires a lot of attention. Not following the rules at this time can lead to problems later.
Disclaimer: This content has been sourced and edited from Hr Breaking. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.
