How to Upload NOC in CIBIL?

The loan process mainly consists of two main components - approval of the loan and repayment. However, collecting an NOC after loan closure is another important step that most borrowers overlook. 

In this article, we take a look at NOC, its purpose, and how to upload NOC in CIBIL.

Learn More About: How To Check Active Loan On PAN Card?

What Is the Meaning of NOC?

NOC is a legal document issued by the lender to the borrower that states all the dues have been cleared by the borrower. 

When a borrower avails a loan from any lender, be it a bank, financial institution, or online lender, he/she is obliged to repay the amount along with the interest rate within the agreed period. Once the loan is paid back in full, the lender issues a No Objection Certificate, or NOC to the borrower.

This document serves as the proof of repayment to the borrower. 

What Is The Purpose Of NOC?

NOC functions as proof of loan closure and complete repayment. It protects the borrower from facing legal implications if the lender misrepresents the loan repayment history. 

In such cases, the borrower can present the NOC to show proof of loan closure. 

Another instance where NOC benefits the borrower is during score score issues. If the loan account is still displayed as active in the credit report, then the borrower can submit the NOC to the relevant credit bureau to dispute the claim and update the report.

Every borrower must make sure to collect the NOC from the lender once the loan is closed.

How To Get A NOC?

Once you have repaid your loan in its entirety to the lender, you will receive an NOC reflecting the same. However, some lenders don’t issue a NOC immediately. In such cases, you can follow the below method to obtain it.

• Contact the lender and notify them of your loan closure
• Submit all the necessary documents such as identity proof, address proof, bank statements, EMI receipts, and other loan-related documents as requested by the lender
• The lender will request your ID and a cheque to verify your identity and account number
• Once the documents are successfully verified, the lender will change the status of your loan to closed and issue an NOC to you

What Happens If The Borrower Doesn’t Have A NOC?

A borrower who doesn’t collect the NOC after loan closure can face the following problems.

Reduced Credit Score

Borrowers without a NOC will see a reduction in their credit scores. Unless the lender provides an NOC, the loan is considered active. Hence, once the borrower stops the payments considering the loan closed, the repayments are deemed missed or late, adversely affecting the credit score.

Additional Repayments

At times, lenders can demand more from the borrower in the absence of an NOC. The lender can state the overdue amount un-repaid and collect more from the borrower. It will cause monetary loss and additional financial constraints. 

Legal Issues

Your lender can sue you for not clearing your dues on time if you don’t possess a NOC.

NOC or No Objection Certificate is an important document for every borrower. Once you have successfully closed the loan account, approach the lender, follow the above-mentioned procedure, and collect an NOC. Failure to collect the NOC after loan closure can lead to several legal and financial struggles.