No Due Certificate from the Bank

A no due certificate from the bank is a formal letter stating that a person has cleared all their dues and has done the full and final settlement of money. A no-due certificate from the bank is only issued after an individual has cleared all the dues. It is a legal document issued by a bank to a customer declaring that he/she has no outstanding dues towards the lender. No Dues Certificate can be obtained from the bank once the loan has been paid off completely.

One must obtain a no-due certificate from the bank once they have paid off all the amount of the loan. A no dues certificate from the bank dissolves all the power of the bank on the collateral. After closing the loan you are required to get a no-due certificate, which acts as proof that you have paid all the balance loan amount. This letter will be retained by the person as an official note that he/she owes nothing more to the lender/bank as far as the loan transaction is concerned.

If the borrower does not have a No Due Certificate (NDC) from the lender, they cannot prove that they are free of obligation to any entity including other banks. Usually, the bank issues a no-due certificate after payment of the loan by the customer. But, in case it is not issued by the bank the customer needs to write a formal letter to the bank asking for the issuance of the same.

No Due Certificate from the Bank: Guidelines and Tips

• A no due certificate letter should be written following the format of a formal letter.
• As an official letter, the matter should be brief and to the point.
• It is important to mention the correct date for the bank to note down your date. It also acts as proof that you have written to the lender on a particular date.
• The subject should be precise and a single line telling the purpose of your letter.
• Add a formal and respectful salutation for the receiver.
• The main body should contain an introduction, the purpose of writing, and the bank details needed for the procedure.
• Mention in the letter, if you have attached some verification documents in the end.
• End the letter with a sense of gratitude towards the receiver, as we are making a request for the issuance of a due certificate.
• Senders should provide the contact details if needed for the process or in case of any query.
• Proofread the letter before sending it.

Format of a No Due Letter from the Bank

• When written from the point of view of a customer: