A loan borrower often spends ample time in choosing between lenders while taking a loan of any type, right from home loan, car loan to personal loan. At the same time, he takes care that all the EMIs are paid on time and that his credit profile remains robust. But, this care and concern vanishes at the time of loan closure. EMIs once stopped leads one to believe that his loan obligations are over, and he has become the owner of the home or car loan. However, this is not true as a borrower's liability does not end until he receives No-Dues Certificate from the lender and completes all impending formalities.
A home loan borrower will become an official owner of the property only upon receiving Encumbrance Certificate (EC) from the Registrar Office. The receipt of EC denotes that the property is free from all monetary as well as legal obligations. One must submit a copy of the closure letter along with a request letter to the Registrar in order to get EC. Also, a home loan borrower should recover all original documents such as registry and other related papers from the bank to close the mortgage completely.
Personal, Credit Card or Consumer Loans:
The closure of these kind of loans is simple as a person has to obtain either a Closure Letter or NOC in order to close the loan completely. However, one must check the credit score while closing such loans to identify any error that could affect credit profile.
A car loan will stand completely closed only after the owner gets name change done on the Registration Certificate (RC). One must approach regional transport office (RTO) and get the change implemented on RC book. Also, one must request for removal of hypothecation. A closure letter copy from the bank along with a written request for the same will complete the process.