After availing of the home loans, repayment of the loans on time is a necessary task. Thus the borrower should set a reminder to repay the home loans after availing of the loans. Some formalities need to be completed post the repayment of the loans. The individual’s credit score gets updated in the CIBIL system based on how timely the borrower is repaying the loans. Timely payment of the loans can lead to improvement of CIBIL score while paying off installments late beyond the due date can lead to degrading the CIBIL score. Thus following proper home loan guidelines is necessary for the borrower while paying the EMI for the home loans. Also, repayment of the loans is better if the bank does not charge the borrower. The home loans can be taken for tenure as long as 30 years, and the tenure can be maximum taken by the borrower in the case of the young age borrower. The repayment value of the loans increases if the loans are taken for a longer span on the same interest rates compared to the shorter span of loans.
The home loans are available on a fixed interest rate basis or flexible interest rates. It is always recommended that the borrower take the loans on flexible interest repayment as the interest rates of the loans are continuously falling it is better affordable. In the case of fixed interest rates, the interest rates are charged higher than the flexible ones considering the increase in interest rates which later cannot be changed in the case of fixed interest rates. In the case of the flexible interest rates, the interest rates may increase in very rare cases, and thus the borrower’s EMI may also increase. If not charged with a penalty, the borrower should try to pay the loans faster to become early debt-free and save on interest repayment. The borrower can gain complete ownership of the property after the repayment of loans. And the property ones purchased becomes a life-long asset for the borrower after the repayment of the complete dues over the property. The ownership of the property can also be transferred to future generations by the existing owner; thus, the ownership can never be taken back unless the owner sells the property.
Things to do after the repayment of the loans
- Take the original documents back from the lender
After the complete repayment of the loans, the borrower should take the property documents back from the lender, which is mortgaged while the loans are running. The documents of the property are very much essential to prove the ownership of the property. Thus the borrower should collect those documents timely after the payment of the loans.
- Ensure that the bank closes the credit status
After the repayment of the loans, the borrower should ensure that the bank should remove the credit status from the CIBIL after the repayment of loans. This enables the borrower to get the credit score improved for the complete repayment of loans. Also, the borrower can apply for another loan if required after the fulfillment of home loans can apply for personal loans or else car loans. The credit history of the borrower should be clear after the repayment of the dues of the loans.
- Get a NOC or legal clearance certificate
The borrower should obtain the no-objection certificate or the legal clearance certificate to prove that the loans have been cleared and the borrower has gained complete ownership of the property.
- Get a confirmation letter from the bank
The borrower should take the confirmation letter from the bank, which proves that the borrower has repaid the complete dues to the bank along with interest, which should be stated in the letter by the bank. This helps the borrower acknowledge the proof that the borrower has repaid the loan to the bank, and thus the borrower has no liabilities been pending from their side for the loans taken from the bank.
- Visit the registrar office once after the repayment of loans
The borrower should visit the registrar’s office to ensure that the ownership of the borrower is made public and the dues on the loans have been repaid. This ensures complete ownership of the property by the owner, and thus after that, the owner is free to sell the property if the owner wishes to do so.
The formalities related to the ownership of the property should be completed by the borrower after the repayment of the loans. It is very much necessary to obtain the NOC & the confirmation letter from the bank after the repayment of the loans. Also, the confirmation letters should be preserved and kept properly after the repayment of the loans to keep as proof that the loan has been repaid. The owner, if they wish, can sell the property anytime after the clearance of the loans. The original documents should be preserved properly by the property owner, which is an essential one to prove the ownership of the property.