Encumbrance Certificate: 6 Reasons Why It Is Important for a Home Loan Insurance?

Encumbrance certificate is one of the most important documents you will need when applying for a home loan insurance plan. This document makes sure that the property is clear of any liabilities, and it is very important for both the lender and the buyer. When combined with a life insurance policy, it ensures that the home loan is secured, and there are no disputes or liabilities in the future. 

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What is an Encumbrance Certificate?

An encumbrance certificate (EC) is an official document issued by the sub-registrar’s office that records all registered transactions related to a property for a specific period. These transactions may include sale, mortgage, lease, or any financial agreement linked to the property.

In practical terms, it helps establish whether the property has a clean ownership record and can be safely used for a home loan.

In some cases:

  • If transactions exist, the EC is issued with details (commonly referred to as Form 15).

  • If no transactions are found, a nil EC is issued (commonly referred to as Form 16).

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  • LIFE COVER

    ₹ 75 Lakh

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    ₹ 12/day+

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Why is an Encumbrance Certificate Important for Home Loan?

Banks evaluate the property as carefully as the borrower, since the property acts as collateral for the loan. This is where the encumbrance certificate becomes essential.

  • Ownership clarity: It confirms that the property belongs to the seller and can be legally transferred.

  • Liability check: It reveals whether the property has been used for any existing loan or obligation.

  • Loan eligibility support: A clear EC improves the chances of faster loan approval.

Even if your financial profile is strong, issues in the EC can delay or impact the sanction process.

6 Reasons Why an Encumbrance Certificate is Important

The importance of an EC does not end at the loan approval stage, as it has a direct bearing on your financial security and life or term insurance policies.

It Confirms Legal Ownership: The process of verifying an EC helps to establish ownership. This reduces the chances of disputes and makes the transaction legally valid.

It Highlights Existing Financial Obligations: The EC reflects whether the property has been mortgaged or linked to any financial liability. This helps you avoid taking on hidden debt along with the property.

It Is Mandatory for Loan Approval: The banks require an EC as part of their legal verification for the loan application. This ensures that the loan application does not suffer any delays in the processing stage.

It Strengthens Home Loan Insurance: Home loan insurance depends on the validity of the property being insured. A verified EC ensures that the coverage is issued on a legally sound asset.

It Helps During Property Transactions: Whether you are buying or selling, the EC acts as a trusted record of the property’s history. It builds confidence for both parties involved.

It Provides a Record of Transactions: The EC offers a transparent view of past dealings related to the property, helping you make informed decisions before finalising the purchase.

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How to Get an Encumbrance Certificate Online?

It has become easier for people to access property records through online facilities, thanks to digitalisation. The steps for obtaining an EC online are as follows:

  • Apply through the portal: Visit your state’s registration website and enter property details.

  • Use EC Online View: You can check the transactions before applying.

  • Download EC Online: You can download the EC once the application is processed.

  • Offline option: You can also visit the sub-registrar’s office and submit a manual application.

Applying online helps save time and allows you to track the status easily.

How Does Term Insurance Work

Details Included in Encumbrance Certificate

An EC contains key information that helps verify the legal and financial status of a property.

Detail Included Description
Owner name Confirms legal ownership
Property details Identifies the asset
Transaction history Shows past sales and mortgages
Encumbrance details Lists liabilities, if any
Registration records Validates official transactions

Final Thoughts!

An encumbrance certificate is a crucial document in ensuring that the property you are purchasing is clear on a legal and financial level before you take up a home loan. It assists in the approval of a loan as well as a home loan insurance, as it verifies the property for which you are taking up the loan.

FAQ's

  • Q: How can I apply for an encumbrance certificate online?

    Ans: You can apply by visiting your state’s registration portal, entering property details, and downloading the certificate once it is processed.
  • Q: What is EC online view?

    Ans: EC online view allows you to check property transaction records digitally before downloading the certificate.
  • Q: Is encumbrance certificate mandatory for home loans?

    Ans: Yes, the banks ask for the EC to confirm whether the property is free from liabilities.
  • Q: Can I download EC online easily?

    Ans: Yes, most state portals allow you to download EC online after successful verification.
  • Q: Does a nil EC mean the property is completely safe?

    Ans: No, it only confirms that no registered transactions were found. Unregistered issues may still exist.

home loan term insurance

˜The insurers/plans mentioned are arranged in order of highest to lowest Sum Assured(SA) offered by Policybazaar’s insurer partners offering term insurance plans on our platform, as per ‘first year premium of life insurers as at 31.03.2025 report’ published by IRDAI.

Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. For complete list of insurers in India refer to the IRDAI website www.irdai.gov.in

Rs. 400/month is starting price for a 1 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age, rounded off to nearest 10.

Rs. 400/month (Rs.13/day) is starting price for a 1 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 230 is starting price for a 50 lakhs term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age, rounded off to nearest 10.

+Rs. 8/day is starting price for a 50 lakhs term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age, rounded off to nearest 10.

+Rs. 12/day is starting price for a 75 lakhs term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age, rounded off to nearest 10.

+Rs. 497/month is starting price for a 1.5 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 487/month is starting price for a 2 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 626/month is starting price for a 3 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 905/month is starting price for a 5 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. ₹361/month is the starting price for a ₹1 crore loan cover with an 8% interest rate for an 18-year-old male, non-smoker, with no pre-existing diseases, loan tenure up to 20 years, rounded off to the nearest 10

+Rs. 1,267/month is starting price for a 7 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

*The full refund of premium is available on availing the one-time option of refund of premium. Total premium paid for policy (paid for add-ons) will be the special exit value, payable on availing the one-time option of refund of premium if you wish to completely exit the policy.

+Rs. 447/month is starting price for a 1 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs.679/month is starting price for a 2 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 910/month is starting price for a 3 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 1,374/month is starting price for a 5 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

+Rs. 1,924month is starting price for a 7 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 30 years of age.

Women

+Rs. 400/month is Starting price for a 1 crore term life insurance for an 18 year-old Female, non-smoker, with no pre-existing diseases, cover upto 30 years of age, rounded off to nearest 10.

Rs. 461/month is the starting price for a 1 crore term life insurance for an 24 year-old female, non-smoker, with no pre-existing diseases, cover upto 54 years of age.

1,642/month is the starting price for a 1 crore term life insurance for an 44 year-old female, non-smoker, with no pre-existing diseases, cover upto 74 years of age.

Prices offered by the insurer are as per the approved insurance plans | #All savings and online discounts are provided by insurers as per IRDAI approved insurance plans | Standard Terms and Conditions Apply | **Tax Benefits are subject to changes in tax laws.| Policybazaar Insurance Brokers Private Limited

We will respond in the first instance within 30 minutes of the customers contacting us. 30-minute claim support service is for the purpose of giving reasonable assistance to the policyholder in pursuance of the claim. Settlement of claim (including cashless claim) is the responsibility of the insurer as per policy terms and conditions. The 30-minute claim support is subject to our operations not being impacted by a system failure or force majeure event or for reasons beyond our control. For further details, 24x7 Claims Support Helpline can be reached out at 1800-258-5881

For more details on risk factors, terms and conditions, please read the sales brochure carefully before concluding a sale

Policybazaar Insurance Brokers Private Limited | CIN: U74999HR2014PTC053454 | Registered Office - Plot No.119, Sector - 44, Gurgaon, Haryana – 122001 | Registration No. 742, Valid till 09/06/2027, License category- Composite Broker Visitors are hereby informed that their information submitted on the website may be shared with insurers. Product information is authentic and solely based on the information received from the insurers.

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