The loan cycle consists of three major stages, they are:
- Loan approval
- Repayment of Loan
- Loan Closure
Most are aware of Loan Approval and Repayment, but few are familiar with Loan Closure Formalities. In this blog, we are going to cover the final stage of loan closure formalities
Once the loan is paid successfully, a loan closure certificate is generated, which is the NOC (No Objection Certificate). The loan closure certificate is an important document issued by the lender indicating that you have no outstanding dues toward them. Your loan cycle ends once you collect the “Loan Closure Certificate.”
For example:
One of my clients successfully paid the home loan amount of Rs. 36 lakh. Immediately after the payment, he could download the “Loan closure certificate” from his online loan account.
Refer to the below Loan Closure Certificate:
We did not visit the branch to complete the loan closure formalities. Instead, we logged into our online loan account, paid the final outstanding amount, and downloaded the “Loan Closure Certificate.”
In case your bank has not provided the option to download the loan closure certificate online, you must visit the branch to complete the closure formalities. The bank will close your standing instructions or autopayment of your loan and issue a “Loan Closure Certificate” sealed & signed manually by bank authority
The manual “Loan Closure Certificate” looks like the below image:
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Thank you for reading…