When you pay off your car loan, the next important step is to remove the lender’s hypothecation from your Registration Certificate (RC). If you don’t, your vehicle’s ownership still appears under the lender’s name, which can create problems when you sell the car or claim insurance.
Thankfully, you can now complete this process online and have your updated RC delivered to your doorstep without visiting the Regional Transport Office (RTO). This guide will walk you through the exact steps to ensure a smooth transition to full vehicle ownership.
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Understanding Hypothecation and Why It Matters
When you buy a car with a loan, the lender hypothecates (adds a legal claim to) your vehicle, meaning they remain a partial owner until you repay the full loan. Once paid off, you must remove the hypothecation to become the sole legal owner.
Why You Should Remove Hypothecation ASAP
- You cannot sell your car without an updated RC.
- Insurance claims might be delayed or rejected if the lender’s name is still on the RC.
- It boosts resale value, as buyers prefer a vehicle without a loan tag.
- Avoids potential legal complications when transferring ownership.
- Ensures that you have full control over your vehicle in all transactions.
Now, let’s look at how you can remove the hypothecation easily online.
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Step-by-Step Guide to Remove Hypothecation & Get RC Delivered at Home
Step 1: Collect the Necessary Documents
To start the process, you need to gather:
- No Objection Certificate (NOC) from the lender (bank/NBFC)
- Form 35 (signed by both you and the lender)
- Vehicle Insurance Certificate (valid and updated)
- Pollution Under Control (PUC) Certificate
- Address Proof (Aadhaar, Passport, Utility Bill, etc.)
- Original RC (if applying offline)
Step 2: Apply for Hypothecation Removal Online
- Visit the Parivahan Sewa Portal (https://parivahan.gov.in).
- Click on ‘Online Services’ > ‘Vehicle Related Services’.
- Select your state and Regional Transport Office (RTO).
- Enter your vehicle registration number and chassis number.
- Select ‘Hypothecation Termination’ from the list of services.
- Upload the required documents (NOC, Form 35, Insurance, PUC, Address Proof).
- Pay the applicable fee (usually between ₹100-₹500, varies by state).
Step 3: Track Your Application Status
- Visit Parivahan > ‘Application Status’ section.
- Enter your application number.
- You will see the real-time progress of your RC update.
Step 4: Get Your Updated RC Delivered at Home
- Once approved, the RTO prints and dispatches your new RC.
- You will receive it via speed post at your registered address.
- Delivery typically takes 7-30 days, depending on your RTO’s processing time.
Tips to Ensure a Hassle-Free Process
✔ Double-check all documents before uploading to avoid rejection. ✔ Ensure your insurance and PUC certificates are valid. ✔ Keep a soft copy of your NOC and Form 35 in case you need them later. ✔ Pay the fee through the official portal only to avoid fraud. ✔ Track your application regularly for updates. ✔ If there is an issue, visit your RTO or call their helpline.
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FAQs
1. How long does it take to remove hypothecation from RC?
- The process takes 7-30 days, depending on the RTO workload.
2. Can I apply offline for hypothecation removal?
- Yes, you can visit your local RTO with all required documents and apply in person.
3. What if I lost my No Objection Certificate (NOC)?
- You can request a duplicate NOC from the lender or submit an indemnity bond.
4. Do I need to visit the RTO for verification?
In most cases, no visit is required. However, some RTOs might call for a physical verification.
5. How can I check if my RC has been updated?
Check on Parivahan Sewa Portal > ‘Know Your RC Status’.
6. Can I remove hypothecation if my insurance is expired?
No, you must have a valid vehicle insurance policy to apply for hypothecation removal.
