The full form of NDC is the No Dues Certificate. It’s a crucial document that acts as proof that you’ve repaid your loan in full and final and you owe nothing to the lender. It is often required when you are applying for a new loan, selling property, or closing accounts.
For students, this relates to clearing their education loans after completing repayments. Similarly, companies might ask for it when closing accounts or settling bills. And property buyers use it to ensure the property has no financial liabilities.
Let’s explore more understanding of the full form of NDC, its importance, what happens if you don’t have one, and how you can get it.
Table of contents
What is a No Dues Certificate?
An NDC is the No Dues Certificate. As the name suggests, the certificate confirms that no outstanding dues or financial obligations are yet to be settled by the individual or an entity.
It is proof that there are no pending payments and that the financial relationship has been completed. So, lenders, property buyers, and utility providers might ask for it. You can easily obtain it from the lender, or the financial institution.
Who Issues No Dues Certificate?
A No Dues Certificate is issued by the lender or financial institution with whom the borrower had the financial obligation. This could be-
- Banks: Traditional banks issue NDCs for loans and credit facilities.
- Non-Banking Financial Companies (NBFCs): These institutions also provide NDCs for loans they have disbursed.
- Utility Companies: Service providers may issue NDCs confirming that all bills have been paid.
Importance of NDC- No Dues Certificate
NDC is important because it proves that all financial obligations are settled. It can prevent potential future disputes or complications in financial dealings, especially when you are planning to take a new loan.
The certificate helps the lender understand previous loan accounts if any have been officially closed. Besides, obtaining an NDC demonstrates responsible borrowing behaviour. It indicates that you have fully repaid your loans, which lenders view favourably, leading to a higher credit score and better loan terms in the future.
Thus, the NDC is crucial for various reasons and in different scenarios-
For Students
NDC is essential for students who have taken education loans to study abroad or in India. They may require a No Dues Certificate after fully repaying their loan. It proves that their financial obligation to the lender is complete. This will ensure that no additional payments or disputes arise in the future.
For Utility and Service Accounts
When closing accounts like electricity, water, internet, or mobile services, companies may ask for an NDC to confirm that all dues have been paid before the account is terminated. This avoids any unresolved bills or liabilities.
For Property Transactions
Buyers often request an NDC from the seller to ensure the property is free of financial encumbrances, such as unpaid loans or utility bills. This document provides reassurance that the property can be legally transferred without any hidden liabilities.
Also Read: Know what is a gap certificate for an education loan and how to obtain one. It also explains the processes involved. Click to learn more!
Process to Obtain a No Dues Certificate (NDC)
The process for obtaining a No Dues Certificate is designed to be user-friendly, whether you choose to apply online, offline, or via email. You simply need to write an application to issue a No Dues Certificate.
This must be a written formal application addressed to the branch manager of the bank where you took the loan. Include your loan account details and state your request for an NDC. Along with your application, submit any necessary documents.
Application to Request No Dues Certificate from Bank
Here’s a sample you can consider to formally obtain an NDC from the bank-
Branch Manager Name
Branch Name
Address
Subject- Request for No Dues Certificate
I, Mr/ Ms. (your name), a resident of (your address), am writing to formally request the issuance of a No Dues Certificate (NDC). I have fulfilled all financial obligations and cleared all outstanding dues associated with my account.
Details for Reference:
- Name: [Your Full Name]
- Account Number/Loan ID/: [Relevant ID]
- Service/Loan/Property Details: [Specifics related to the dues]
Kindly process my request at your earliest convenience. Please let me know if any additional information or documentation is required to complete the process.
Thank you for your assistance.
Sincerely,
[Your Full Name]
[Contact Number]
[Date]
Once your request is processed and verified, the bank will issue the NDC, confirming that all dues have been cleared.
Documents Required to Obtain NDC
A checklist of documents is needed to obtain the NDC. This includes details like loan account number, proof of repayment, and personal identification. Besides, depending on the bank’s requirements, you may need to provide additional documentation, such as collateral release documents if applicable.
Here’s the list of documents required to get an NDC from the bank-
- Loan account number
- Bank statements or payment receipts to show all payments have been made
- A government-issued ID proof (e.g., Aadhaar card, passport, voter ID)
- The formal request letter addressed to the branch manager
Verification of the No Dues Certificate (NDC)
To avoid issues later, especially when dealing with large amounts or international transactions, it is essential to verify the authenticity of your NDC. Here are some tips for verification-
- Cross-check with the Issuing Bank: Contact the bank or financial institution that issued the NDC to confirm its validity. Ensure that the details on the certificate match their records.
- Check for Official Stamps and Signatures: An authentic NDC should have official stamps and signatures from authorized personnel at the bank. Look for these features to validate their authenticity.
- Maintain Copies: Keep both physical and digital copies of the NDC for your records. This can be useful if you need to reference it in future transactions or disputes.
Also Read: Learn how to easily download your IOB interest certificate online. Use it to claim deductions on your income tax returns.
Issues Without a No Dues Certificate
Failing to secure a No Dues Certificate can lead to several challenges. You may face disputes regarding outstanding dues, even if you believe you have settled all obligations. This can complicate future loan applications and affect your creditworthiness. Check what else can happen-
- Future Financial Complications: Not having an NDC might result in unexpected claims from lenders regarding unpaid debts, leading to potential legal issues or complications in securing new loans.
- Negative Impact on Credit Score: If any discrepancies arise due to missing documentation like an NDC, it could negatively impact your CIBIL when you check your credit score, making it harder to obtain loans or credit in the future.
This was all about the No Dues Certificate. Make sure to verify its authenticity and understand the implications of not having one. Check out some of the FAQs below for more clarity.
To learn more about education loans, the best bank accounts for students, forex, banking experience for global students, or international money transfers, reach out to our experts at 1800572126 to help ease your experience with studying abroad.
FAQs on No Dues Certificate
A No Dues Certificate proves your loan or account is closed. It confirms that no outstanding balance is left.
NDC stands for No Dues Certificate. The certificate confirms that no outstanding dues or financial obligations are yet to be settled by the individual or an entity.
Request the NDC from your lender after repaying all dues. Provide proof of payment and necessary documents for verification.
Write a letter mentioning your loan account number and repayment details. Request the certificate and attach proof of payment.
Anyone who has repaid their loan needs an NDC. This includes students, borrowers, and businesses.
The bank or lender issues the No Dues Certificate. It confirms that the account is fully settled.
You need an NDC after repaying a loan in full. It’s also required when applying for new loans, closing accounts or settling bills.
Without an NDC, you may face future loan disputes. It can also affect your credit score and new loans.
You’ll need loan details, proof of repayment, and personal ID. Additional documents may be requested by your lender.
An NDC isn’t legally mandatory, but it’s highly recommended. It ensures that your loan closure is officially documented.
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