4 Crucial things to remember when closing a personal loan?
Closing a loan is one of the most satisfying feelings of relief that anyone can have. After making EMIs payments for years, this is the time you feel relaxed. You feel the excitement of having not been bound by any debt burden. However, at this moment you might be tempted to relax, but you must go through the loan closure procedure carefully. It can put you in financial and legal trouble with your lenders.
Hence you have to be careful at the time of closing your loan to avoid any setbacks in the future. To make it easier for you, we have compiled the list of essential steps to prevent any confusion and for a seamless closure of your loans.
- Take hold of the no dues certificate.
No due certificate is also known as a no-objection certificate. It is one of the most important certificates that you must ask the bank or lender to give after closing your loan. This letter shows that there is no due left, and you have cleared all your debts entirely. However, before taking the certificate, you must verify it carefully.
These are the mentioned lists that you must check the following information:
- Your name
- Your Account Number
- Date of the loan taken
- Date of the loan closed
After receiving the no due certificate, You must carefully check whether the spelling or any mistake is not there. If by any chance any mistake is there, then ask the lender to correct it at the same time so in future you don’t face any problems.
- Get your CIBIL Score updated
After completing the loan closing process, the first thing you need to do is to check your CIBIL or Credit score. Cibil score is the only place where your loan repayment capacity and financial credits are shown. Hence if the banks and lenders have not updated it, ask the lender to do what is needed as soon as possible. If any mistake update was done by the lender, then you must ask the lender to correct it.
Your credit score can lead to getting quick loan approval in the future. Hence you must consider checking your credit score on time.
- Get all your necessary documents.
While making your personal loan closure, another thing to remember is to collect all the original documentation you may have supplied to your lender when you applied for the loan. You would have been given a list of documents to keep with the lender, or you may have kept such a list yourself. Hence you must compare all the papers and check that you have received all your documents.
It is advisable to obtain the documentation directly from the bank or other lender from whom you applied or got the loan. Check that all of the pages of the papers are present while collecting them, and then sign the acknowledgement form.
- Check for the removal of the alien on the property
A lien gives the bank ownership of your property until you pay off your obligation, preventing you from selling it. Hence Banks place a lien on your property so that if you don’t pay your EMIs, they can sell it to recoup the loan amount.
As a result, when you’ve paid all of your EMIs and closed your loan account, it’s critical to get the lien removed so that you may enjoy your life fully and don’t face any difficulty in the future. Therefore, it is suggested to go to the registrar’s office with a representative from the lender to get the lien cancelled.
Closing a loan may appear to be the happiest moment of your life. It is also a fundamental process that needs to be done nicely and carefully to avoid future inconveniences. However, it’s critical to evaluate all the steps mentioned above to prevent jumping from the frying pan into the fire. You must also get some expert financial advice so that you have to face any difficulty and live to the fullest in the future.