NOC Not Received After Loan Closure – What to Do?

When you’ve finally repaid your loan, the last thing you want is a lingering worry about documentation. This is where a NOC (No Objection Certificate) becomes essential. It’s the official proof that your loan is fully cleared and the lender has no claims on you.

In this guide, we explain everything about NOC, why it’s important, what to do if it’s not received, and real-life examples to make the process simple for you.

 Why a NOC (No Objection Certificate) is required after loan closure

A No Objection Certificate confirms that all your dues are cleared and the lender has no objections regarding the loan. Without it, you may face issues like:

• Incorrect credit reports

• Delayed removal of bank charges or hypothecation

• Legal complications in property or vehicle transfers

 Problems that can occur if the NOC is not received

Imagine Ravi cleared his car loan but did not get a No Objection Certificate. Later, he tried selling the vehicle, but the buyer’s bank couldn’t proceed because the hypothecation was still active. Situations like this can easily be avoided by having your No Objection Certificate in hand.

 Responsibilities of the bank/lender as per RBI guidelines

RBI mandates that lenders issue a No Objection Certificate promptly after loan closure. You can also refer to the official RBI guidelines for more clarity on loan closure rules and consumer rights. Banks must provide:

• Confirmation of loan settlement

• Official No Objection Certificate within a reasonable time frame

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 What is NOC (No Objection Certificate)?

A No Objection Certificate is an official clearance letter issued by your lender after complete repayment of the loan. It:

• Acts as legal proof that your loan is fully settled

• Confirms that you have no outstanding dues

 Types of NOC

Different loans require different NOCs:

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 Why is NOC Important After Loan Closure?

 Legal Proof of Loan Closure

A No Objection Certificate acts as a legal document confirming your loan is fully paid. For example, Priya used her No Objection Certificate to prove settlement when her bank mistakenly sent a notice for pending dues.

 Required for Updating CIBIL & Credit Report

Without a No Objection Certificate, your loan may still appear as “active” in CIBIL, lowering your credit score.

 Helps Avoid Future Legal/Financial Problems

Having a No Objection Certificate protects you from wrong EMI demands, penalty charges, or false claims.

 Required for Removing Hypothecation / Property Charge

•  Car Loan: Needed to remove hypothecation from RC

•  Home Loan: Needed to remove bank lien from property registry

 Required During Resale or Ownership Transfer

Without a No Objection Certificate, selling your vehicle or property becomes complicated. Buyers require proof that the asset is free from bank claims.

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 Documents Typically Included in a Loan NOC

•  Borrower’s Name

•  Loan Account Number

•  Type of Loan

•  Confirmation of Complete Payment

•  No Dues Remaining Declaration

•  Property/Vehicle Details (if applicable)

•  Authorized Bank Signature and Seal

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 When Should You Receive the NOC?

•  Usually within 7–15 days after loan closure

•  Some cases may take up to 30 days

•  Some banks provide digital NOCs for faster processing

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 What to Do If NOC Is Not Received After Loan Closure?

 Step 1: Verify Loan Closure Status

Visit the bank and collect:

•  Payment receipts

•  Loan closure confirmation letter

 Step 2: Contact Customer Care / Branch

•  Submit a written request

•  Send a reminder via email

•  Note down application reference number

 Step 3: Check Registered Email & Address

Ensure the No Objection Certificate was not sent to an old address. Update your contact info if necessary.

 Step 4: Request Re-Issuance of NOC

If the No Objection Certificate is lost or not delivered, most banks reissue it. Some may charge a nominal fee.

 Step 5: Escalate the Issue

•  Contact the Branch Manager

•  Reach the Nodal Officer

•  File a complaint with the Grievance Redressal Department

 Step 6: File Complaint with RBI / Banking Ombudsman

If the bank delays:

•  Use the RBI Complaint Portal

•  Approach the Banking Ombudsman

 Step 7: Check Your CIBIL Report

Verify whether your loan is marked “Closed” or “Settled”. Raise disputes for corrections if needed.

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 Consequences of Not Having a NOC

 Impact on CIBIL Score

Your credit score may drop if the loan appears active.

 Difficulty in Getting Future Loans

Banks may see you as a risky borrower.

 Legal or Recovery Issues

Banks may demand payment later or send wrong EMI reminders.

 Property/Vehicle Issues

Hypothecation cannot be removed; selling the asset becomes difficult.

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 How to Remove Hypothecation / Bank Charge Using NOC

After repaying a loan, your No Objection Certificate is the key to clearing any claims the bank has on your asset. This is especially important for vehicles or properties. Below is a detailed, step-by-step guide for both cases.

 Vehicle Loan (RTO Process)

When you take a car loan, the bank keeps a hypothecation on your RC. Once the loan is repaid, you need a No Objection Certificate to remove this restriction.

Step-by-Step Process:

1. Collect Documents

•  Original RC book
•  Vehicle insurance papers
•  Bank-issued NOC
•  Form 35 (for hypothecation removal)
•  ID and address proof

1. Submit to RTO

•  Hand over the documents and Form 35 at your regional RTO or upload them if online submission is available
•  Pay the nominal processing fee

1. Processing

•  Typically, it takes 7–15 days for the RTO to update the RC
•  You will receive a new RC without the hypothecation mark

Real-life Example:

Rajesh cleared his car loan but delayed following up on his No Objection Certificate. When he tried selling the vehicle, the buyer’s bank denied financing because the hypothecation still appeared on the RC. After submitting the No Objection Certificate and Form 35, the RC was updated in 10 days, and the sale went smoothly.

Tips to Avoid Delays:

•  Check if your bank has already issued a digital NOC
•  Keep multiple copies of your NOC and loan repayment receipts
•  Follow up with the RTO after a week if the RC is not updated

Checklist for Vehicle Loan Hypothecation Removal:

✅ RC book and insurance papers
✅ Bank-issued NOC
✅ Completed Form 35
✅ ID and address proof
✅ RTO processing fee paid
✅ Follow-up completed

Home Loan (Property Documents Process)

Banks place a lien on your property until the home loan is fully repaid. The No Objection Certificate confirms no dues remain and allows you to remove the bank charge.

Step-by-Step Process:

1. Gather Documents

•  Original property documents
•  Bank-issued NOC
•  Loan closure certificate (if available)
•  Borrower’s ID proof

1. Submit to Registrar / Sub-Registrar Office

•  Present the NOC along with property documents
•  Request removal of the bank lien

1. Bank Lien Removal

•  The bank issues a confirmation letter releasing the lien
•  The property documents will then reflect no bank charge

Real-life Example:

Sneha fully repaid her home loan but didn’t immediately get her No Objection Certificate. When she wanted to sell her property, the buyer’s lawyer noticed a lien. She submitted the No Objection Certificate to the registrar, and within 2 weeks, the bank lien was removed, allowing the sale to proceed.

Tips to Avoid Delays:

•  Request your No Objection Certificate immediately after paying off the loan
•  Keep multiple copies of NOC and closure certificate
•  Regularly follow up with both the bank and registrar to confirm lien removal

Checklist for Home Loan Bank Charge Removal:

✅ Original property documents
✅ Bank-issued NOC
✅ Loan closure certificate
✅ Borrower’s ID proof
✅ Submission at registrar completed
✅ Lien removal confirmed

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 What if the NOC Has Errors?

Common errors:

•  Spelling mistakes

•  Wrong loan number

•  Incorrect property/vehicle details

Solution: Request a corrected No Objection Certificate (NOC) from your bank and get it reissued.

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 Tips to Ensure You Receive the NOC on Time

•  Visit bank after last EMI to confirm closure

•  Request a Loan Closure Certificate

•  Keep contact info updated

•  Save all payment receipts

•  Follow up if No Objection Certificate is not received within 30 days

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 Sample NOC Request Letter

[Your Name]
Loan Account Number: XXXXXXX
Date of Loan Closure: DD/MM/YYYY
Contact: XXXXXXX

Subject: Request for Issuance of NOC (No Objection Certificate)

Dear [Bank Name],
I request you to issue a No Objection Certificate for my loan mentioned above as it has been fully settled. Kindly provide the same at the earliest.

Thank you,
[Signature]

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 FAQs:

Q1: Can NOC be issued digitally

A1: Yes, many banks now provide digital NOCs via email or net banking.

Q2: Can No Objection Certificate be reissued if lost

A3: Yes, banks typically reissue a No Objection Certificate upon request.

Q3: When will NOC be issued if property documents are with the bank

A3: Usually, the bank issues the No Objection Certificate after clearance of all dues and mortgage release.

Q4: Is NOC issued in settlement cases

A4: Yes, once the settlement amount is fully paid, a No Objection Certificate is issued.

Q5: How long does it take to receive the No Objection Certificate

A5: Typically 7–30 days, depending on the bank and loan type.

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✅ Real-Life Example

Mr. Rajesh from Delhi closed his car loan on March 5, 2025. After 15 days, he did not receive his No Objection Certificate. Following the steps above, he contacted the bank, verified payment receipts, and requested re-issuance. Within 5 days, he received the No Objection Certificate digitally, updated his CIBIL report, and successfully sold his car without issues. ✅

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Conclusion 

A No Objection Certificate is a critical document for any loan closure. Without it, your credit score, legal security, and asset ownership may be affected. Follow the steps in this guide to ensure timely receipt of your No Objection Certificate, resolve delays, and protect your financial record.