Vehicle owners who have fully repaid their car loans can now remove the hypothecation entry from their Registration Certificate (RC) entirely online, without visiting the Regional Transport Office (RTO). The facility has been enabled through the Ministry of Road Transport and Highways’ VAHAN portal, offering major relief to motorists across the country.
When a vehicle is purchased on loan, a hypothecation clause is recorded on the RC, indicating that the bank or financier holds a financial interest in the vehicle. If this entry is not removed after loan repayment, the financier continues to appear as the owner in government records, which can create complications during resale, ownership transfer, or re-registration.
Online Facility for Hypothecation Termination
The hypothecation termination service is available via the official VAHAN website (vahan.parivahan.gov.in). In several states, the process is fully digital. However, in some regions, applicants may still be required to submit a physical copy of Form 35 to the RTO and the lending institution after completing the online application.
Documents Required
Applicants must upload the following documents during the online process:
-
No Objection Certificate (NOC) issued by the bank or financier
-
Form 35
-
Valid motor insurance certificate
-
Existing Registration Certificate (RC)
Step-by-Step Online Process
-
Visit the VAHAN portal and log in
-
Select “Online Services” and click on “Vehicle Related Services”
-
Enter the vehicle registration number and chassis number
-
Generate and verify OTP
-
Choose “Hypothecation Termination”
-
Fill in insurance details and upload required documents
-
Pay the prescribed fee online
Why Hypothecation Removal Is Important
Removal of the hypothecation entry is essential to establish complete ownership of the vehicle. It is mandatory for selling the vehicle, transferring ownership, or ensuring error-free government records. Officials advise vehicle owners to complete this process promptly after loan closure to avoid future legal or administrative issues.
