If the loan is still active in your CIBIL report even after the loan has been fully repaid, it can become a big problem for your credit profile. Many times this happens due to non-timely updating by the bank or NBFC, delay in data sync or technical fault. In such a situation, instead of panicking, it is important to adopt the correct procedure, because wrong credit report can affect the approval of new loan or credit card in future. Let us discuss here what steps you should take if the outstanding is still visible in CIBIL even after the loan is over.
Why does the loan appear active in CIBIL even after closure?
Delay in data updates: Usually banks and financial institutions send information to credit bureaus every month. If you have recently repaid the loan, it is possible that the update is still pending.
NOC or closure process incomplete: If the No Objection Certificate (NOC) or loan closure formalities are not completed properly, the loan status may remain active.
Error in data entry or processing: Sometimes a simple data entry error or delay in internal processing may cause the loan to appear active.
Foreclosure charges outstanding: If you have preclosed the loan and there are any foreclosure charges outstanding, the loan may appear active in the system.
Delay in refund or interest recalculation: Delay in refund of security deposit, adjustment of additional payment or recalculation of interest may also result in delay in status update.
In such a situation, immediately contact your bank/NBFC to confirm the closure letter and NOC and file a dispute in CIBIL if necessary.
How to close the loan which is active in CIBIL?
Step 1: Contact your lender (bank or NBFC).
First of all contact the customer care or relationship manager of your bank/NBFC. Tell them clearly that your loan is still showing active in the CIBIL report even though you have made the full payment.
Step 2: Submit closure documents.
Provide the lender with your NOC (No Objection Certificate), receipt of final payment and loan closure letter. Request them to send your updated loan status to the credit bureaus in the next reporting cycle.
Step 3: Register on CIBIL portal
If you do not see a change in your report even after the lender sends an update, visit the official portal of TransUnion CIBIL and file “Dispute”. Along with this, upload the documents related to your closure.
Step 4: Keep monitoring your reports
Keep records of all emails and complaints. Every 10–15 days, download your latest CIBIL report and check whether the loan status is updated to “Closed” or not. By adopting the right procedure and regular follow-up, the mistakes in your credit report can be rectified, so that there is no problem in getting a loan or credit card in future.
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