5 things you must do after repaying home loan, failing which may lead to problems in future
Home Loan Repay: A home loan is a long-term commitment that takes years to repay. When the final EMI is paid, it’s natural to feel a sense of relief and accomplishment as the burden of debt is lifted. However, don’t celebrate just yet—there are several important steps you need to take after your home loan is fully repaid. Skipping these can lead to issues later.
Collect the Original Documents Deposited with the Bank
When you took out your home loan, you submitted the original documents of the property as collateral. It’s crucial to retrieve these documents carefully when closing the loan.
Collect the Original Documents Deposited with the Bank
This includes important papers such as the allotment letter, possession letter, sale deed, builder-buyer agreement, and other legal documents. Ensure you thoroughly check all pages to confirm nothing is missing or damaged.
Ensure the Lien is Removed
When you take a home loan, the bank places a lien on your property, meaning they can claim ownership if you fail to repay the loan. After paying off the loan, verify that the lien has been officially removed. Once the lien is lifted, you regain full ownership of your property.
Obtain a No Dues Certificate
A No Dues Certificate is essential once your loan is paid off. This document, issued by the bank or financial institution, confirms that the loan has been fully repaid and no further obligations remain.
Obtain a No Dues Certificate
It should include details such as the borrower’s name, property address, loan account number, loan amount, start date, and repayment completion date. Without this certificate, your property could still be seen as under a loan.
Request a Non-Encumbrance Certificate
A Non-Encumbrance Certificate (NEC) is a legal document that details all financial transactions related to your property, including past sales and loans. It serves as proof that the property is free of any financial liabilities.
Request a Non-Encumbrance Certificate
If you decide to sell your property in the future, buyers will often request this document. After repaying your home loan, make sure to obtain an updated NEC from the bank reflecting the closure of the loan.
Update Your Credit Score
After repaying the loan, it's essential to update your credit profile. If your credit score hasn’t been updated to reflect the loan closure, monitor it closely and ensure it gets updated as soon as possible. This will help you secure future loans easily, should you need one.