Many people end up getting their vehicle financed by procuring a loan from a lending institution such as a bank. In such cases, the vehicle comes with a Finance Company Hypothecation. This hypothecation becomes a part of the vehicle’s RC details, and once the loan is paid off, can be easily removed from the vehicle’s registration certificate.
In the years gone by, this might have been a tedious process, involving a host of paperwork and a whole lot of confusion. However, the Ministry of Road Transport and Highways (MoRTH) has made the process much more seamless and easy to perform in the recent years. With the correct set of documents in place, you can easily remove the RTO hypothecation from your vehicle’s RC. To do so, you need to follow the process mentioned below.
Firstly, you must procure all the necessary and relevant documents from your financier or lending institution stating that you have paid off the loan. The lending authorities will provide you with a Loan Closure certificate, certifying that you have no outstanding debt and have paid off the entire loan amount. Along with that, they will also provide you with a No Objection Certificate (NOC), which has a validity of 90 days. So it is important to remember that you must submit your hypothecation removal application to the RTO within 90 days of obtaining the NOC from your financier.
Once you have obtained the documents from the lending institution, you need to visit the RTO with the following documents in tow:
- NOC from the financier
- Form 35 (2 copies)
- Original registration certificate
- Aadhar Card
- Insurance policy
- Pollution Under Control (PUC) certificate
- Passport sized photographs
- Driving Licence
- Payment receipt copy (if paid online)
You can choose to pay for hypothecation removal offline directly at the RTO as well. After that, you need to get all your documents verified by the RTO officer, post which you will get an Acceptance form which you need to sign, and then make payment for your new RC smart card. You can make the payments online as well at the transport ministry’s official Parivahan Sewa portal, that also allows you to pay your other dues such as your pending e-challan etc.
Once you make the payment online, you will receive an e-receipt that will verify the payment. On your visit to the RTO, you will have to produce this receipt to the RTO officer to verify the payment. After the payment is made, you will have to collect the payment receipt and after which you will get a date allotted to you to come back and receive your revised registration certificate.
As mentioned above, it is quite a simple process to get hypothecation removed from the registration certificate of your vehicle. While as of now the process involves multiple visits to the RTO, the Ministry of Road Transport and Highways (MoRTH) is working towards digitising the entire exercise so as to make the process much less time consuming and involve limited amount of paperwork.