RTO Hypothecation Removal Process Online & Offline: Procedural Guide

If a person has purchased a vehicle with the help of a loan and has paid all the EMIs, then he/she should apply for an HP Termination at the RTO to transfer the vehicle ownership from the bank to his/her name. This process is known as RTO Hypothecation Removal Process. The process ensures that a bank does not have any right on the vehicle anymore. Learn more about how to remove vehicle hypothecation and the documents required for the application process.

What is RTO Hypothecation?

Hypothecation (HP) by definition is basically the submission of an entity or collateral for a loan. If a person is unable to repay the loan, then the respective bank or the financial institution has legal right to seize control over that entity.

For instance, if you have taken a loan from a bank for buying a car, then, in this case, the car serves as an entity or collateral. Once you have paid all the EMIs, then you can have legal ownership on the vehicle for which you need to get the hypothecation removed from the RC by submitting the application with the concerned RTO. This process is known as RTO Hypothecation. You need to visit the RTO and submit a Hypothecation Removal Application. It is worthy to note that RTO Hypothecation removal is only possible after you have completely repaid the loan against a vehicle. RTOs then issue a new registration certificate after removing the hypothecation status from your RC.

How to Remove Hypothecation from RC Online?

If you wish to apply for RTO Hypothecation Removal Process Online, then you can make use of Parivahan website to make the payment and the receipt can be shown to the person in charge at the RTO. You can remove hypothecation from RC online using the following steps:

1. Visit the government’s Pariwahan Seva website 
2. Look in the Online Services section. 
3. Click on Vehicle Related Services and you can enter your state and RTO office information.
4. You will be sent to the gateway for submitting an online application for the hypothecation cancellation form after entering the Registration and Chassis numbers.
5. Next, you need to visit the respective RTO to submit the application and the documents to remove hypothecation from vehicle registration certificate. 

How to Remove Parivahan Hypothecation from RC Offline?

1. Gather the necessary paperwork
   Once you’ve paid off the loan, you’ll need to gather important documentation to establish that the hypothecation on the vehicle has been cancelled. As evidence for inactive hypothecation, the lender will normally give NOC and Form 35 (Notice of Termination of an Agreement of Hire-Purchase/Lease/Hypothecation). The NOC must be submitted to the RTO within three months after the date of issuance.
   
2. Hypothecation Removal Application
   Following the collection of the documents, you must apply for hypothecation removal at the RTO office by submitting an application form along with the hypothecation documentation. For removal, you’ll additionally have to pay RTO hypothecation fees. Request the next visit date at the RTO after verifying the documents and the application form.
3. Get a copy of the RTO’s acceptance form
   The RTO officer will hand you the acceptance form at your next visit, which certifies your acceptance of the removal of hypothecation and other vehicle details. Examine the form to check that all of the information is correct. If you spot an error, get assistance as soon as possible to have it repaired.
   
4. Pay the money and pick up your new RC card
   You will be requested to submit all of these documents, together with the acceptance form, at a different counter once the acceptance form is complete. Pay the new RC card’s needed charge. You will be provided a receipt with the date on which your new RC card will be issued.

Documents Required for Hypothecation Removal

The bank will issue the following documentation to remove the hypothecation from your car after you have paid off your vehicle loan. These are the documents you’ll need to deactivate your account:

1. NOC: The conclusion of the hypothecation agreement between the bank and the loan account holder will be confirmed by the NOC. This is the key document that the RTO requires in order to cancel the notation on the RC.
2. Form 35: This is an application to the RTO for the hypothecation to be cancelled. This form also verifies that the loan between you and the bank has been closed.
3. Valid Insurance Policy: To complete the procedure of terminating the hypothecation on your car, you must produce a valid car insurance policy.
4. PUCC: The RTO also requires the Pollution Under Control Certificate (PUCC) to cancel or remove the hypothecation on your vehicle.

What are Hypothecation Termination Eligibility Requirements?

Following the completion of the vehicle loan, the lender will provide a few necessary documents to prove their permission of hypothecation in writing. The NOC is valid for three months from the date of issuance. An application, along with the NOC, should be submitted to the Regional Transport Office before it expires. The RTO should receive the following documents:

• The original Form 35, as well as two copies signed by the registered owner and the bank, are required.
• The bank issued the original NOC.
• Copy of a PAN Card that has been attested
• A copy of your car insurance policy that has been attested is valid.
• Original Certificate of Registration
• a copy of the certified proof of address
• No Dues Certificate from the insurance company
• Copy of valid verified PUC Certificate

RTO Form 35 for Removal of Hypothecation from RC

RTO Form 35 is a key document when you have purchased a vehicle through loan and want to transfer its ownership in your name after repaying the loan. This form has to be submitted at the RTO to ensure that the agreement between a person and the bank/ financial institution has been terminated. It is necessary to submit RTO Form 35 for removal of vehicle Hypothecation.

RTO Form 35 contains the introductory section and the concluding section. In the introductory section, the details about the Registered Owner and the Financier are to be mentioned and in the concluding section, there is an official statement regarding the termination of the hypothecation agreement. You need to mention the name of the RTO in the form where the vehicle would be registered. The automobile number mentioned in the old RC, as well as the signature of the applicant, is mandatory. Besides this, the financial institution’s official seal on the form is also required along with the date of cancellation of the agreement. The concerned person at the RTO then approves your application form by signing it.