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IMPORTANCE OF SECURING A NOC AFTER LOAN CLOSURE

Finance Tips
01 October 2018
Manya Ghosh
136,403

Table of Contents

In those phases of life, when we don’t have enough capital to fulfill our needs be it for education in a foreign country, or buying a car or a home, loans come in handy. But they also prove to be a burden that eats into our savings. Everyone wants to get that burden off their back as soon as possible.

However, it’s very important that in our joy of having repaid a loan, we should not forget one last but extremely crucial step - procuring a No Objection Certificate (NOC) from the financer. The borrower brings a complete closure to the loan only when he/she has the legal document that declares that he/she has no outstanding dues towards the lender and the lender has no right over the collateral.

So, let’s learn a bit more about what is NOC and why obtaining it is essential and how you can do it.

Did You Know

Disbursement

The act of paying out money for any kind of transaction is known as disbursement. From a lending perspective this usual implies the transfer of the loan amount to the borrower. It may cover paying to operate a business, dividend payments, cash outflow etc. So if disbursements are more than revenues, then cash flow of an entity is negative, and may indicate possible insolvency.