You’ve finally settled your car loan; congratulations! You’re not done yet, though. There’s one remaining step: getting the bank’s name off your Registration Certificate (RC).
The procedure is referred to as vehicle hypothecation removal, and it’s something you need to do to reflect your ownership status with the RTO. Fortunately, similar to other RTO services, this one can also be done through the Parivahan portal online.
In this article, we’re going to tell you what hypothecation is, when to get it removed, and how to do it, whether you’re applying online or going to the RTO in person.
What is Hypothecation in Vehicle Registration?
When you borrow money to buy a car or bike, your vehicle is registered with the note being “hypothecated to” the bank. It means that technically, the bank is the co-owner of your vehicle until your loan is repaid.
Once your loan is paid off, it’s time to erase that tag by getting Parivahan hypothecation termination done. Your RC shall only show your sole ownership then.
When Should You Remove Hypothecation?
You must get your vehicle hypothecation removed as soon as you pay off the entire vehicle loan and obtain the No Objection Certificate (NOC) from your financier or bank. It is advisable to do this within 14 days of loan settlement to prevent any inconvenience while transferring ownership in the future, updating insurance or during the renewal of the registration.
Documents Required for Hypothecation Removal
To process your vehicle hypothecation removal, you’ll need:
- No Objection Certificate (NOC) from your bank or financier
- Original RC
- Valid Insurance Certificate
- Pollution Under Control (PUC) certificate
- Address proof (Aadhaar, voter ID, etc.)
- Identity proof
- Form 35 (issued by the bank)
- Fee receipt (usually around ₹150–₹300, depending on the state)
How to Apply for Hypothecation Removal Online
The hypothecation removal online process is fast, transparent, and eliminates unnecessary RTO visits.
Step 1: Go to the Parivahan Portal: Visit https://parivahan.gov.in
Step 2: Click on “Online Services” > “Vehicle Related Services”: This will redirect you to the Vahan portal.
Step 3: Select Your State: Choose the RTO where your vehicle is registered.
Step 4: Choose “Hypothecation Termination”: From the service menu, select “Remove Hypothecation” under “Miscellaneous Services.”
Step 5: Enter Vehicle Details: Input –
- Vehicle registration number
- Chassis number
- Engine number
Step 6: Upload the Required Documents: Upload scanned copies of:
- Form 35
- Bank-issued NOC
- RC, Insurance, PUC, ID and address proof
Step 7: Pay the Applicable Fee: Pay with UPI, debit/credit card, or net banking. Charges are slightly different per state.
Step 8: Submit the Application: Submit the form after paying, and write down your application number to track it.
How to Track RC Hypothecation Status
After you submit your application, you can verify your RC hypothecation status as follows:
- Go to https://vahan.parivahan.gov.in
- Click on “Know Your Application Status”
- Enter your application number
- You can check whether hypothecation has been lifted or is pending processing
How to Apply for Hypothecation Removal Offline
If you wish to do this manually, this is how the Vahan hypothecation process takes place offline:
Step 1: Visit Your RTO: Go to the RTO where your vehicle is registered.
Step 2: Submit the Required Forms and Documents: Bring physical copies of:
- Form 35
- Bank NOC
- Original RC
- Insurance
- PUC
- Address/ID proof
Step 3: Pay the Fee at the Counter: Submit the fee through cash/card/UPI as directed.
Step 4: Verification & Approval: Your documents shall be verified, and the new RC without hypothecation shall be released following clearance, either personally or by post.
How to Get an Updated RC After Loan Closure
Once your application is approved, you can:
- Go to the RTO to obtain the new RC
- Or, download a digital copy of your updated RC through Digilocker or mParivahan
The RC will then have your name on it with nothing mentioned about the bank, which means you own the vehicle in full.
Why It’s Important to Update Hypothecation
- Guarantees complete legal ownership.
- Required to sell or transfer the vehicle.
- Required for insurance policy updates.
- Prevents complications in the event of accidents or claims
- Streamlines the renewal of vehicle registration and road tax
Conclusion
Although paying off your car loan is a significant accomplishment, don’t overlook the last step: completing the vehicle hypothecation removal process. The procedure is simple and crucial, whether you visit the RTO in person or use the Parivahan hypothecation termination system. With options like hypothecation removal online, there’s no reason to delay. Your RC will reflect complete ownership after it is finished, with no banks or conditions attached.
