Repaying a home loan is certainly a herculean task. While car loans and personal loans usually have a term of less than 5-10 years, home loans are set for a term of at least 15 years. So, it’s only natural that you feel lighter and happier than ever on the day you finally pay the final EMI. However, to make sure that you aren’t troubled by any loan-related issues in the future. Read these steps:
Recovering the Original Documents
When you obtain a home loan, you have to submit a number of documents in their original form. This rule applies to state-owned banks including SBI, PNB, etc. as well as the loans provided by housing finance companies such as Indiabulls home loan, LIC home loan, etc. In any case, you must recover all your documents once you have repaid the loan.
Most lenders provide a list of documents submitted at the time of loan application to all borrowers. It may include income proof, bank account statements, property papers, possession letter, etc. So, you can cross-check the documents that the lender actually hands over to you. Also, don’t forget to check that the documents are in good condition and that no page is missing.
Obtaining the NOC Certificate
A NOC Certificate is a No Objection Certificate which serves as a proof that you have repaid your Indiabulls home loan successfully and that the lender has no objection to it. Sometimes this certificate is also called No Dues Certificate (NDC) which is also pretty much self-explanatory.
When you receive your NOC or NDC document, be sure to check the details in it. These include your name, loan account number, property information, and date of loan closure. It should also say that the lender has no rights to the property any longer and it belongs solely to you.
Checking the CIBIL Report
Since you are a loan borrower, you must already know what CIBIL report is. It’s, of course, an important financial report that contains all the details of your past loans, repayment history, income, etc. So, when you have fully repaid a home loan, you want to make sure that it’s updated in the report as well.
RBI’s regulations dictate that all crediting rating agencies should provide one free credit report to every user every year. In fact, you can apply for your free CIBIL report easily by visiting this website. If your lender has chosen another credit rating bureau, then you can find a similar link on their official website.
Make sure that you wait for a few weeks before you check the report. This is because even if your bank has intimated the agency, they may take some time to update your report accordingly.
Keeping the Credit Score High
If you don’t use credit cards, and the home loan was the only form of credit that you have had experience with, then after you close the account, your credit score may start to drop. This is because you must have a continuous experience with some form of credit if you want to keep your score high.
The following are some of the things that you can do after repaying your home loan to protect your CIBIL score:
Get a credit card, preferably a lifetime free credit card as that won’t attract an annual fee. You don’t have to use it for unnecessary purchases. However, as long as you use it for making small payments every now and then, it should keep your credit record in a good condition.
Don’t shy away from taking a personal loan if you need one. In fact, a loan in conjunction with a credit card can do wonders for your credit score.
Don’t ever close your old bank accounts or credit card accounts. The oldest accounts bring to most value to your credit rating.
Don’t forget to get your free CIBIL report every year. This will help you review your progress and also detect potential scams and frauds.
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