Remember to communicate effectively with your lender throughout this process, and keep copies of all documents for your records.
Confirm the final amount with the lender, including any prepayment charges or penalties.
Closing a home loan involves several steps and paperwork. Settling a loan is a major milestone for many as it provides a relief to them and ensures they are debt free and now own the house, in its true sense. However, the loan closure involves a set process, which is crucial to be followed to avoid any issues in the future.
Among other steps, it is also important to confirm with the bank/lender if there are any legal formalities that need to be completed for the closure of the loan.
Here’s a checklist that you may use as a guide;
Loan Repayment: Ensure that you have repaid the entire outstanding amount of the home loan. Confirm the final amount with the lender, including any prepayment charges or penalties.
No Dues Certificate: Obtain a No Dues Certificate (NDC) from the lender. Once you have made the payment, your lender will issue you a NDC. This document confirms that you have no outstanding dues towards the loan.
This document is crucial for updating the land records with your name as the sole owner.
Property Documents: Collect all original property documents from the lender. This may include the sale deed, title deed, and other property-related documents. You will also need to collect all of the original documents that you submitted to the lender when you applied for the loan. Make sure you receive all the original property papers you submitted.
Receive Original Security Cheques: If you provided post-dated cheques or security cheques during the loan tenure, ensure that they are returned to you.
Loan Closure Letter: Get a formal letter from the lender confirming the closure of the loan. This letter should include details such as the loan account number, closure date, and the final outstanding amount.
Updated CIBIL Score: Check your credit report to ensure that the closure of the loan is updated and reflects positively on your credit history.
Receipts and Acknowledgments: Keep copies of all the receipts and acknowledgment letters for the payments made towards the loan closure.
Release of Mortgage: If the lender has registered a mortgage, ensure that they release the mortgage by filing the necessary documents with the registrar’s office.
Insurance Policies: If you have taken any insurance policies linked to the home loan, check if they need to be terminated or if you are eligible for any refunds.
Update Records: Update your records to reflect the closure of the home loan, including updating your personal financial statements.
Final Statement: Request a final statement of your loan account, showing the details of all transactions until the closure date.
Remember to communicate effectively with your lender throughout this process, and keep copies of all documents for your records. Additionally, it’s advisable to consult with legal and financial professionals to ensure a smooth closure of your home loan.
