Home loans are a widely used form of financing in India, offering individuals an accessible and affordable means to own property. People typically take out home loans to either purchase a property like a plot, flat or construct a house.

The advantage of home loans lies in the fact that they enable individuals to acquire property without needing to pay the entire amount upfront. Instead, they borrow from a lender and repay the loan over time via equated monthly instalments (EMIs).

However, there are instances where a person may wish to sell their property while still repaying the loan, which necessitates completing certain formalities before the sale can proceed.

Can You Sell a House With an Outstanding Home Loan?

Yes, it is possible to sell a property even if the home loan is still outstanding, provided you obtain prior consent from the financing bank or lender.

If the buyer intends to take a loan from the same bank, the process is usually more straightforward, as the bank won’t need to transfer the property documents to another lender before receiving payment.

If the buyer plans to make an outright purchase, they can pay the bank directly. The property documents will only be released once the bank has fully recovered the loan amount and any other outstanding dues.

You should check your outstanding loan balance and ensure you have sufficient funds to clear it. If you’re unable to repay the loan in full, you may need to negotiate with your lender or explore alternatives such as a personal loan to cover the remaining balance.

Additionally, you’ll need to obtain a no-objection certificate (NOC) from your lender, which confirms that they have no objections to the sale of the property. This certificate is usually required by the buyer’s lender or bank to ensure there are no legal encumbrances on the property.

It is advisable to consult a real estate expert to gain a thorough understanding of the legal and financial aspects of selling a property with an outstanding home loan.