Repaying a home loan after several months or years of EMI payments is a major milestone and often brings a sense of relief. However, even after the final payment, there are important legal and procedural steps that must be completed to formally close the home loan and collect original property documents from the bank.
To help NRIs and overseas property owners, we have also created a detailed video explaining the home loan closure process in India from abroad, including document collection and registration formalities.
STEPS TO CLOSE A HOME LOAN IN INDIA FROM ABROAD
Below are the systematic steps involved in closing a home loan from abroad and collecting property documents from the bank:
- Loan Closure Certificate
- Power of Attorney (POA)
- Property Document Collection
- Discharge / Reconveyance Deed Registration
- Encumbrance Certificate (EC) Update
- Secure Dispatch of Original Documents
Let us now explain each step in detail with a real-life case study.
Real Case Example
One of my clients, Mr. Manish Kumar, is residing in Washington, USA.
- In March 2016, he availed a home loan of Rs.47,40,000 from State Bank of India (SBI) to purchase a 3BHK flat in Bengaluru.
- In February 2017, he took an additional top-up loan of Rs.7,00,000 for home interiors.
- The total loan amount was Rs.54,40,000.
In November 2025, Mr. Manish repaid the entire loan amount. We then followed the steps below to formally close the home loan, collect property documents, register the reconveyance deed, and update the Encumbrance Certificate (EC).
1. LOAN CLOSURE CERTIFICATE
Once the home loan is fully repaid, the borrower must obtain a Loan Closure Certificate from the bank.
- If your bank provides an online option, you can close the loan account through internet banking and download the certificate.
- If this option is not available, you can email your home branch, informing them that the loan has been fully repaid and requesting formal closure and issuance of the loan closure certificate.
- If there is no response from the bank, a local representative in India can visit the branch with the latest loan statement and collect the certificate.
Our Case:
Mr. Manish did not have an online loan closure option, and the branch did not respond to emails. He shared the latest loan statement with us, and we visited the SBI branch and collected the Loan Closure Certificate. Below is the image of loan closure Certificate
2. POWER OF ATTORNEY (POA)
Since Mr. Manish was residing in the USA and could not travel to India, he decided to grant a Power of Attorney (POA) to his friend Mr. Varun, who resides in Bengaluru.
Steps followed to execute POA from abroad:
- Drafted the POA in Word format
- Shared the draft with Mr. Manish via email
- Mr. Manish printed the POA on A4 paper in the USA
- He signed all pages and obtained Notary attestation in the USA
- He couriered the following documents to India:
- Original POA
- Self-attested copies of Aadhaar, PAN, and Passport
(Two sets – one for DRO and one for the bank)
Mr. Varun received the courier within 5 working days, signed the POA, and submitted the following documents to the District Registrar Office (DRO):
- POA received from the USA
- Self-attested ID proofs of Mr. Manish and Mr. Varun
The DRO verified the documents, and we paid a stamp duty of Rs.500 for adjudication.
Below is the image of Notary Certificate and POA
Below is the Attestation from DRO
Additionally, we executed a request letter addressed to SBI RACPC along with the POA.
3. PROPERTY DOCUMENT COLLECTION FROM BANK (RACPC)
After the POA was ready, Mr. Manish emailed the RACPC (email ID mentioned in the loan closure certificate) to request an appointment for document collection.
- Email sent on 13 January 2025
- Appointment confirmed on 16 January 2025 at 10:30 AM
Documents carried by the POA holder to RACPC:
- Loan Closure Certificate
- Original POA
- Self-attested ID proofs of borrower and POA holder
- e-Khata (required to include Khata number in reconveyance deed)
After verification, the bank handed over the original property documents, which were earlier deposited as security:
- Sale Deed
- Sale Agreement
- Construction Agreement
- Payment Receipts
- MOD Documents
- Encumbrance Certificate
[Image – Bank Acknowledgement for Document Handover]
Additionally, SBI issued:
- Reconveyance Deed
- Exemption Letter (confirming bank representative presence is not required for registration)
- Bank Representative Aadhaar (required for registration)
Below is the image of Reconveyance Deed
Below is the image of Exemption Letter
4. DISCHARGE / RECONVEYANCE DEED REGISTRATION
To register the reconveyance deed at the Sub-Registrar Office, the following documents were required:
- Reconveyance Deed & Exemption Letter
- e-Khata
- Bank Representative Aadhaar
- Power of Attorney
- Borrower Aadhaar
- POA Holder Aadhaar
- Two witnesses with Aadhaar
We submitted the application online, paid Rs.650 stamp duty, and booked the registration slot.
On the registration day, the POA holder provided biometric verification, photo, and signature.
The entire registration process was completed in approximately 20 minutes.
Below is Registered Reconveyance Deed
5. ENCUMBRANCE CERTIFICATE (EC) UPDATE
In the Encumbrance Certificate:
- Column 5 shows the seller’s name
- Column 6 shows the buyer’s name
After registration, the EC reflected:
- Seller: State Bank of India
- Buyer: Mr. Manish Kumar
This confirms that the bank’s charge has been removed and ownership is fully restored to the borrower. Refer to below updated Encumbrance Certificate
6. SECURE DISPATCH OF ORIGINAL DOCUMENTS
Mr. Manish’s family resides in Kota, Rajasthan, and he instructed us to dispatch all original documents there.
We securely packed:
- Original property documents
- Registered reconveyance deed
- Updated EC
Packaging included bubble wrap, weather-proof covers, and rigid cardboard envelopes.
The documents were sent via a reputed courier service.
- Courier cost: Rs.350 (less than 1 kg)
- Delivery time: 2 days
- Client confirmed safe receipt of documents
CONCLUSION
Closing a home loan from abroad involves more than just repaying the loan amount. Proper completion of bank formalities, registrations, and EC updates is essential to ensure a clear and marketable title.
This step-by-step process can be smoothly completed with the right guidance—even without travelling to India.
NEED HELP CLOSING YOUR HOME LOAN FROM ABROAD?
If you are an NRI or living outside India and need assistance with home loan closure, property document collection, Power of Attorney execution, reconveyance deed registration, or Encumbrance Certificate updates, we are here to help.
At PGN Property, we provide end-to-end support to ensure your home loan is formally closed and your property title is clear—without the need for you to travel to India.
- Email: pgnproperties@gmail.com
- Call / WhatsApp: +91-9742479020