If you have fully repaid the car loan and still the name of the bank or financier is mentioned in the RC (Registration Certificate) of your vehicle, then there is no need to worry. Giving great relief to vehicle owners, the government has made the process of hypothecation termination i.e. removal of loan entry online. Now you can do this work sitting at home from mobile or laptop, that too without visiting RTO.
Actually, when a person buys a car on loan, there is a hypothecation clause attached to the RC. It shows that the vehicle is mortgaged with a bank or financier. But even after repaying the loan, if this entry is not removed, the bank’s rights over the vehicle remain in the government records. In such a situation, problems may arise at the time of selling, transferring or re-registration of the vehicle.
Hypothecation entry will now be removed online
The facility to remove hypothecation is now available online through the official website of the Transport Ministry, VAHAN (vahan.parivahan.gov.in). In many states, the entire process is digital, whereas in some states, after filling Form 35 online, its hard copy may have to be submitted to the RTO and the loan granting institution.
What documents will be required?
To remove hypothecation online, some important documents need to be uploaded:
- No Objection Certificate (NOC) received from the bank or financier
- RTO Form 35
- Valid Insurance Certificate
- Original RC of the vehicle
Step-by-Step Process
- Login to VAHAN website
- Go to “Online Services” and select “Vehicle Related Services”
- Generate OTP by entering registration number and chassis number
- After entering OTP select “Hypothecation Termination”
- Fill in the insurance details and upload the required documents
- Deposit prescribed fees online
Why is it important to remove hypothecation?
Removing hypothecation is essential if you’re looking to sell your car, transfer ownership or simply want to keep your RC clean. This makes it clear that no bank or financier has any claim on the vehicle.
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