Once someone’s loan has been fully repaid, a no-due certificate must be requested from the bank. When the bank issues this certificate, it nullifies all authority over the collateral. After clearing the loan, you must get a no dues certificate to prove you have paid the entire balance owed. This certificate represents the borrower’s formal acknowledgement that the loan transaction is complete and the bank or lender is no longer owed any money.
No dues certificate: An overview
A “No Due Certificate” or “No Objection Certificate” (NOC) is a formal letter from the bank stating that the individual has completed the full and final settlement and paid all dues. You can request a no-due certificate from the bank by writing a letter once you have paid off all your loan balance dues. You will receive a no dues certificate from the bank once the loan has been completely paid off. So, the bank will issue a “No Dues Certificate” only if a person has paid off all their debts.
Without this certificate from the lender, the borrower cannot demonstrate that they are debt-free to any entity, including other banks. After the customer has paid off the loan, the bank usually issues a no-due certificate. However, if it is not issued, the customer must send a formal letter to the bank requesting its issuance.
No dues certificate: How should I write it?
Only after all debts have been fully paid can a person receive this certificate from the bank. To get a no-due certificate, the person must write to the bank manager and request to issue the certificate.
You will need to format the letter following the bank’s no dues certificate format, which includes the recipient’s address, the date, the subject, a salutation, a body describing the details of the loan account and the cleared dues, and the letter’s conclusion. After the confirmation of dues clearance, the individual will receive the certificate from the bank manager.
Know about: Gwalior
No dues certificate: Formats
Check out the examples for writing a letter requesting a no-due certificate from a bank and the format of a no-due certificate from a bank.
Format for a no dues certificate from a bank
Shweta Mehra
Subject: Personal Loan Clearance
This is to certify that Miss. Shweta Mehra has been a customer of ours for the previous seven years (March 2016 – April 2023). She is no longer liable for any unpaid obligations against loan account number XXXXXXXX for the sum of Rs. 7 lakhs that was fully repaid.
Yours sincerely,
RAJ AGNIHOTRI,
Bank Manager
SBI Bank
Adarsh Nagar Branch
Format for a no dues certificate from a bank: For personal loan
Supriya Rao
408 Krishna Nagar
Gwalior
Date: 09 June 2022
The Branch Manager
Punjab National Bank
Krishna Nagar Market Branch
Gwalior- 110063
Sub: Issuance of No Due Certificate from the Bank for Personal Loan
Respected Sir,
I, Supriya Rao, of 408 Krishna Nagar, Gwalior, want to inform you that all debts associated with my loan number XXXXXXXXX are paid in full. I took out a loan of Rs. 6 lakh on 20 January 2015 for unforeseen emergencies. Now that the debt has been paid, I request you issue the bank’s certificate of no-due clearance, for which I am very grateful.
Thank You.
Yours sincerely,
(Signature)
SUPRIYA RAO
Contact number- 9999599995
Format for a no dues certificate from a bank: For study loan
Rupal Verma
Sector – 18, Noida, Gautam Budh Nagar
Uttar Pradesh
Date: 12 July 2022
The Branch Manager
State Bank of India Bank
Noida, Gautam Budh Nagar Branch,
Uttar Pradesh- 412005
Sub: Issuance of No Due Certificate from the Bank for Study Loan
Respected Sir,
Respectfully, I am Rupal Verma, a resident of Sector – 18, Noida, Gautam Budh Nagar, Uttar Pradesh. I would like to let you know that on 13 September 2018, I took out a study loan for Rs. 11 lakhs with loan account number XXXXXXXX. I paid the final instalment on 07 July 2022, and as a result, there are no due debts from my end.
Therefore, I request you send me a no due certificate from the bank statement on the instalment payment. Please get this to me as soon as possible, and it will be greatly appreciated.
Thank You.
Yours sincerely,
(Signature)
RUPAL VERMA
Contact number- 9935992991
No dues certificate from the bank: Quick tips
- A no-due certificate letter needs to be written using formal letter formatting.
- As with any formal letter, the subject line should be concise and to the point, with the subject containing a single line stating the letter’s purpose.
- For the bank to record your date, it is crucial to provide the correct date. It also indicates that you wrote the lender on a specific date.
- If you have any supporting documents at the end of the letter, mention those as well.
- The body of the letter should comprise an introduction, the purpose for writing, and the date the bank needs to complete the procedure.
- Lastly, senders should include contact details if there are any procedure-related queries or requirements.
FAQs
What is the no-due certificate from the bank?
A no-due certificate from the bank is only given to people who have paid all of their debts. It is a legal document that a customer receives from a bank as proof that you do not have any remaining debt with the bank.
Why is a due certificate essential?
You require a no-due certificate from the bank when applying for a new bank loan. It also shows that you don't have any unpaid debt on you. You have to pay off your debts before asking for a new loan.
How do I obtain a bank no-due certificate?
You can ask the bank for a no dues certificate after all loan instalments have been paid. The no-due certificate will state that you have no unpaid debts against you.
