These days, getting a personal loan is as easy as ordering food online. Thanks to apps and websites, people can apply for loans from their phones in just a few minutes. But while taking a loan is quick, handling it properly till the end is just as important. Most people relax after paying the last EMI, but forget that their responsibilities don’t end there. In fact, some very important steps begin only after the loan is closed. If you skip them, you may face big trouble later.
Let’s understand what you should do immediately after closing your personal loan to protect your money, improve your credit, and avoid future problems.
Ask for Your No Objection Certificate (NOC) Immediately
After your final EMI is paid, the first thing you must collect is the No Objection Certificate (NOC). This document is official proof from your lender that you have paid the loan in full and there is no amount pending.
- NOC works as a legal document.
- It helps you in case the lender later raises a false claim.
- It can also be useful if you want to apply for another loan in the future.
Always collect the NOC in hard copy and soft copy. Keep it safely for future reference.
Collect the Final Loan Statement from Your Lender
Once your loan is over, the lender usually gives you a final loan statement. This shows every EMI you have paid, with dates, interest, and principal amounts. This document is very useful for:
- Personal financial records
- Tax-related documentation (if you claimed deductions)
- Future loan applications
If your bank or NBFC doesn’t send this automatically, you can request it by phone, email, or by visiting the branch.
Double-Check the Last EMI and Interest Charged
Sometimes, especially with floating interest rate loans or ‘Buy Now, Pay Later’ options, the last EMI might differ slightly from previous ones. Before accepting the closure, check:
- Was the last EMI amount correct?
- Was the interest properly calculated?
- Was the final payment cleared without delay?
If the payment was made by cheque or third-party app, make sure the money was received by the lender in time. A delay can cause unnecessary penalties or affect your credit.
Collect All Original Documents Submitted While Taking the Loan
If you had submitted any documents like:
- Salary slips
- Income tax returns
- Property papers (if loan was secured)
- ID proof or bank statements
Then don’t forget to collect them back. While digital KYC has reduced paperwork, many lenders still ask for hard copies, especially in higher loan amounts. Prepare a checklist of what you submitted and ensure you get everything back.
Don’t Forget the Post-Dated Cheques (PDCs)
At the time of disbursing the loan, many banks ask for a few post-dated cheques as a backup. These are usually kept in case the auto-debit of EMI fails.
Once your loan is closed:
- Ask the lender to return these cheques.
- If they are destroyed, ask for written confirmation.
- This is important to avoid any misuse or confusion in future.
Some banks may destroy the cheques, but still, you must ask them to confirm it on email or letterhead.
Ensure Your Credit Report Is Updated with Loan Closure
After you close the loan, the lender must send the updated report to the credit bureaus (like CIBIL, Experian, Equifax, or CRIF Highmark). This report will show that:
- The loan is closed
- All payments were on time
- There is no outstanding amount
This update improves your credit score, which helps in getting other loans or credit cards easily. But sometimes, the bank delays in sending this report.
Here’s what you should do:
- Wait 30-45 days after final EMI.
- Check your credit report (you can get 1 free report every year from each bureau).
- If the loan is still shown as active, raise a dispute.
- You can also complain directly to the credit bureau online.
Fixing this early will protect your score and future loan eligibility.
Keep All Records for at Least 5 Years
You may feel everything is fine now, but issues can arise months or even years later. Hence:
- Save all emails, receipts, statements, and documents.
- Take screenshots of payment confirmations.
- Save scanned copies of physical documents.
Ideally, keep these records for at least 5 years.
Know What Happens If You Don’t Complete These Steps
If you ignore these post-loan actions, you may face:
- Wrong credit score entries
- Legal notice due to missed final payment
- Trouble while applying for a future loan
- Loss of original documents
- Risk of post-dated cheques being misused
Your financial history should be clean and clear, and the only way to ensure that is by completing the loan closure properly.
Why These Steps Matter Even More for Digital and Instant Loans
Today, many people take instant loans from apps. These loans may seem simple, but they also carry certain risks:
- Some apps are unregulated
- Many don’t issue proper documents
- Closure process may not be transparent
So after paying your EMIs, especially in such digital loans:
- Always take written confirmation that loan is closed
- Get NOC through email or PDF
- Confirm credit report update after 1-2 months
If your app or lender refuses to provide proof, that’s a red flag. You should report such lenders to RBI or the Play Store/App Store.
Don’t Rush Into Another Loan Right Away
Many people feel free after completing one loan and immediately apply for another. But wait.
- Let your credit report get updated
- Make sure your monthly income has space for new EMIs
- Review your financial goals before jumping into another loan
Planning wisely can keep you away from a debt trap.
Useful Tip: Track Your Credit Report Regularly
Even if you are not taking any new loan, it is a good idea to:
- Check your credit report every 6 months
- Make sure all details are correct
- Spot any suspicious activity early
Several banks and financial apps now offer free credit score tracking. Use these tools to stay informed.
Many Loan Apps May Not Close Properly – Be Alert
In the last few years, many loan apps have entered the Indian market. Some are not registered with RBI. If you have taken a loan from such platforms:
- Double check your closure
- Keep proof of every EMI
- Don’t delete the app until NOC is received
Several people have faced harassment calls even after paying everything. Avoid this by staying alert from the beginning.
If You Face Issues, Here’s What You Can Do
If your lender:
- Does not provide NOC
- Refuses to return documents or cheques
- Delays credit report update
Then:
- Raise a complaint on the lender’s website.
- If not solved in 30 days, write to RBI’s Banking Ombudsman.
- Share details with credit bureau support team.
- You can also post your grievance on social media tagging the bank for faster response.
Document everything. Take screenshots, save email conversations. This will help if legal help is needed later.
