There are a lot of easy ways to buy a car or a vehicle of your choice these days. And it gets super easy when you can afford all the great design, color, space and cool specifications of a vehicle. But, is it really that easy for everyone. Most of us take loan from banks to buy a nice vehicle that looks amazing and works efficiently. When the financing is done by the banks we own our vehicle in no time. Yet, the hypothecation with the bank on the papers remains, till the time we are done with the loan.
So let’s dive into this article to understand and have thorough knowledge about what is Hypothecation? Why is Hypothecation done? How and when can it be removed? And what is the process of its removal?
What is Hypothecation?
Hypothecation is a process of pledging your vehicle as collateral to secure the loan taken by you from the third party, without giving up the ownership, title or rights of the vehicle. In simple words, you give your vehicle to the lender as collateral till the time you pay off the whole loan given by the lender.
Also Read : Smart Card Driving License
How and when can Hypothecation be removed?
The Hypothecation can be removed as soon as you receive the documents stating that your loan with the third party is paid and you receive a letter on the official letterhead from the bank or financial institution stating that your loan is paid in full and closure of the loan is being done. After that, you need to provide RTO with a No Objection Certificate and Form no. 35 with its two copies.
Documents required to be submitted in order to remove Hypothecation from RC
Following are the documents required for a vehicle owner to submit, in order to remove Hypothecation from RC:
- Form 35 (2 copies, self-attested)
- Registration Certificate
- NOC (RTO Office copy)
- Copy of PUC
- Copy of Aadhar Card
- Copy of Insurance Policy
- Passport sized photographs
- Print out of receipt of payment
Also Read : Vehicle Fitness Certificate Online
Offline procedure of removal of Hypothecation
- Get all the documents verified and checked by the RTO officer and submit them thereafter.
- Provide your details and get it registered in the RTO Office database.
- Go to the Registration number series counter, where the official presentation will be approving all your details provided by you in the database.
- After that, you need to head towards the payment counter and pay the applicable fees.
- Once all the documents are submitted, verified, and approved, the vehicle owner can get updated about their Hypothecation termination or check their status on https://vahan.parivahan.gov.in/vahanservice/vahan/ui/statevalidation/homepage.xhtml
- When all the above mentioned is done, you will receive your updated RC on the given date allotted by RTO.
Online procedure of removal of Hypothecation
- Visit https://parivahan.gov.in/parivahan/
- Click on “Online Services”
- Now, click on “Vehicle Related Services”
- When redirected to the website “Enter Vehicle Number” and captcha.
- Click “Login” option.
- Then select “Choose your Service”
- Click “Miscellaneous”
- Pay the fees.
- Give the receipt to the concerned officer in your nearest RTO Office.\
- After all the documents are approved and verified the Hypothecation from your vehicle will be removed.
Also Read : RTO Form 28
How to get a new RC Smart Card?
- Visit your nearest RTO Office
- Go to the same counter where you submitted your documents.
- The officer at the desk will return your documents along with the “Acceptance Form”.
- Go through the form and do the necessary changes if so required.
- If there are changes or corrections to be made, tell the officer then and there and he/she can modify it in the database.
- Sign the acceptance form and hand it over to the officer again.
- After this, the officer will ask you to move to the counter where the fee is to be submitted for the Smart Card RC.
- Now, you will be given a receipt and a specific date to collect your smart card RC.
- Visit the RTO on the stipulated date and collect your registration certificate.
Frequently Asked Question
No, the hypothecation removal cannot be done before paying off the entire loan amount.
Yes, you can apply online as well for Hypothecation removal by visiting https://parivahan.gov.in/parivahan/
Yes, it is important to fill the “Acceptance Form” for getting the Smart Card RC.
Yes, absolutely. Otherwise how will your vehicle be free from being collateral to the third party? One must and should remove Hypothecation in time after paying off the loan.