Personal loan: Don't forget this thing to do post-closure

Today, the majority of individuals take numerous measures when taking out a personal loan. However, people are known for being irresponsible when it comes to closing or pre-closing a loan and often forget what the obligations are once the loan is repaid.

Here are some critical steps to take while closing or pre-closing a loan:

No Dues Certificate (NDC)

Once you have paid off the loan, your lender will issue you a No Dues Certificate (NDC). This is one of the most critical documents you should obtain promptly upon loan repayment.

This certificate verifies your repayment. You cannot establish that you have paid off your debts without this paperwork. If you intend to take out another loan in the near future, this document will serve as proof that your prior loan has been paid off. Additionally, it is prudent to save this document for an extended period of time.

Typically, if you pay the final balance in cash, your lender will immediately issue this document. If you pay by cheque, NEFT, or any other method, the lender will give the NDC and either mail it to your registered address or request that you collect it from the lender’s branch office.

Statement of Account (SoA)

In combination with the NDC, it will assist you in demonstrating that your debts have been paid in whole and on time. This is an optional document that certain lenders frequently issue. You should consider obtaining this paperwork if your lender provides it. However, you should look for inconsistencies in the credit score as well. If you discover an error, you can amend it using the SoA.

Collecting unused cheques

If you have any unused cheque leaves, you should also collect them. The collecting of the no dues certificate and any unused cheques typically concludes the loan’s closure process.

However, you must verify the score to ensure that there are no discrepancies. Suppose there is a possibility that you will need another loan within one to two years of the current loan’s completion. In that case, it is strongly suggested that you check your credit ratings immediately following the loan’s completion.