So, you’ve repaid your loan. 🎉
EMIs are done, and your bank account is breathing again.
But before you move on — did you collect your loan closure letter?
At Vizzve Finance, we often see people ignore this crucial step — and it costs them big later.
🧾 What Is a Loan Closure Letter?
A loan closure letter (or NOC – No Objection Certificate) is an official document from the lender that:
✅ Confirms full repayment of your loan
✅ Declares that the loan account is closed
✅ States that the lender has no legal or financial claim over you
📌 Why It’s So Important
✅ 1. Protects Your Credit Score
Many borrowers assume that repaying the loan is enough. But if your lender doesn’t update your CIBIL, it might show as "Active" — hurting your credit score.
💡 Your closure letter is proof in case of any score dispute.
✅ 2. Avoids Future Disputes
Some lenders fail to update loan status, especially if it was closed early.
Without proof, you might:
Get collection calls again
Face legal notices
Be denied new loans
✅ 3. Essential for Selling Collateral
If your loan was against an asset (home, gold, vehicle), you need the closure letter to:
🏠 Remove the bank’s lien
🚗 Transfer ownership
🪪 Get full asset title back
✅ 4. Makes Loan History Transparent
If you’re applying for another loan, banks may ask for prior closure letters, especially for:
Home loans
Business loans
Balance transfers
This adds credibility to your application.
✅ 5. Prevents Legal Trouble Years Later
Years down the line, system errors or bad recordkeeping could falsely show your loan as unpaid.
If you don’t have the closure letter, it becomes a "your word vs their system" issue.
⚖️ A one-page letter can save you legal hassle.
🧠 Vizzve Finance Pro Tip: What to Check in a Closure Letter
✅ Loan account number
✅ Type of loan
✅ Amount repaid
✅ Date of closure
✅ Confirmation of NIL balance
✅ Lender’s signature & seal
📥 How to Get Your Closure Letter
Request it through your bank’s or NBFC’s app, net banking, or branch.
Ensure your loan shows as “Closed” in CIBIL (usually within 30-45 days).
Store both digital and printed copies safely.
📩 At Vizzve, you’ll receive automated closure letters from partnered lenders — no chasing required.
💬 FAQs
1. Is a loan closure letter and NOC the same?
Yes. NOC (No Objection Certificate) is another name for the loan closure letter.
2. What happens if I lost the letter?
You can request a duplicate from your lender, though some may charge a fee or take time.
3. Will my CIBIL update automatically after loan closure?
Usually yes, but it can take 30–60 days. Keep the letter handy in case it doesn't.
Published on : 17th July
Published by : SMITA
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RBI-Registered Loan Partner | 10 Lakh+ Customers | ₹600 Cr+ Disbursed.