Q ) What are the steps for hypothecation removal from RC after Car Loan closure?

A ) Hypothecation removal process can be explained in the following 4 steps:-

Step 1: Receive Documents from the Lender/Bank

No Objection Certificate:

It is the agreement by bank, which states that the lender has no objection over removal of hypothecation

Form 35:

Two copies of Form 35 are usually given, and it mentions the termination of hypothecation between you and the bank.

Step 2: Documents to be taken to the RTO

You need to collect the following documents and then visit the RTO:

• Original Form 35, and copies of it signed by the registered owner and the bank, original Bank NOC, copy of your PAN Card, copy of valid car insurance, original RC (Registration Certificate), copy of your address proof, copy of valid Pollution Under Control (PUC) Certificate

Apart from a visit to the regional transport office, you will have to go to the insurance company, and submit a copy of No Dues Certificate, which you received from the bank

Step 3: Submit the Hypothecation Removal Application

Submit the duly filled Hypothecation Removal Application and attach the required set of documents to it

Step 4: Process to Receive the RC Smart Card

Now collect the ‘Acceptance Form’ that contains details mentioned on the RC. In case any corrections are required in the details, you must get it done. The changes (if any) will be reflected in the specific form.

• To collect the Smart Card RC you need to pay a fee.
• Collect receipt of the same, and you can take the Smart Card RC within a few days (date will be specified).
• Visit RTO for collecting the new RC Smart Card (sans hypothecation), on the given date.

After all these procedures, you will get rightful ownership of the car you had taken on car loan, with the bank ownership cancelled over the vehicle.