Hypothecation

Hypothecation is the process of agreeing to use an asset as collateral in exchange for a loan. With a vehicle loan, for example, you agree that your vehicle is used as collateral to secure your loan; if you can't repay the loan, your lender can repossess the vehicle. ,

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Need For Vehicle Hypothecation


Immediately after paying the monthly instalments against the purchase of your vehicle, it is important to get the vehicle transferred in your name from that of the financial institution that you took the loan from.

Procedure of Endorse And Termination Of Vehicle Hypothecationn

Buying a vehicle can be easy these days as there are multiple banks and financing agencies that provide vehicle loans at competitive interest rates. These loans can be availed for a flexible tenure and can be repaid in easy instalments. However, when you buy a vehicle on credit, the financer technically remains the owner of the vehicle until the loan is cleared off. The same has to be recorded in the registration certificate of the vehicle.

Documents Required For Vehicle Hypothecation


t is important to include the vehicle purchasing process (if purchased on loan) in the vehicle registration certificate. Below are the documents that are required for the approval Original Registration certificate
Two copies of duly filled Form 34 required for endorsement of Hypothecation
Copy of valid insurance that is attested
Registered owner's attested copy of address proof
Valid pollution attested copy under control certificate
Prescribed fee
Attested copy of PAN Card or Form 60 & Form 61 (depending on applicability)

Cancellation of Vehicle Hypothecation


Documents from the Lender - Once the vehicle loan is closed, the lender will give a few necessary documents such as NOC and copies of Form 35 to confirm their approval over hypothecation in writing. The validity of the NOC is three months from the issuance date. Before its expiry, an application along with the NOC should be submitted to the Regional Transport office.

Documents to be taken to the RTO


The following documents should be submitted to the RTO: Original Form 35 along with two copies signed by the registered owner and the bank Original NOC issued by the bank Attested copy of PAN Card A Valid copy of attested car insurance Original Registration Certificate A Copy of attested address proof Copy of valid attested PUC Certificate It is also necessary to take a No Dues Certificate from the insurance company.

Submitting Hypothecation Removal Application


An application to remove hypothecation along with the following documents should be submitted to the RTO: Original Vehicle RC Copy of driving license PUC certificate copy Two self-signed Form 35 copies Copy of insurance policy RTO copy of NOC Once these documents are verified by concerned officers of RTO, a nominal fee has to be paid. Then the next date of your visit will be assigned.
On the specified date, you have to visit the RTO to collect the Acceptance Form with RC details from the concerned person. You can do the required changes in the form, if applicable. Against a nominal fee, you can apply for a Smart Card RC that can be collected from the RTO within a few days of payment. This will ensure you the rightful ownership of the vehicle.

How to check vehicle registration information/ RC details online:

It is very simple to check vehicle RC details online. The Ministry of Road Transport and Highways created the Vahan e-service portal that serves as a centralised national register for all registered vehicles in the country. Through this online portal, users can get to know vehicle details. In order to get the RC owner details, as well as know about the vehicle, you need to follow the following steps:








A step-by-step guide

Step 1: Visit the Parivahan Sewa Portal at https://parivahan.gov.in/parivahan/
Step 2: Click on the ‘Online Service’ section
Step 3: Select the ‘Vehicle Related Services’ option
Step 4: From the drop down menu, select the state where the registration certificate has been applied from.
Step 5: Enter your vehicle registration number
Step 6: Select the ‘State RTO’ from the drop-down menu
Step 7: Select the ‘Status’ option from the menu on top of the page and click on ‘Know Your Application Status’ option
Step 8: Enter your application number, the captcha code and click on Submit.
Step 9: Select the ‘View Report’ option.

On entering the correct particulars, you will be able to view the vehicle RC details, the vehicle RC status as well as the RC owner details.

FAQs

The financial institution or the bank offering the loan will provide you with the NOC after repayment of the vehicle

Yes, it is mandatory to remove the hypothecation from the RC to transfer the ownership of the vehicle to your name after loan repayment. .

Visit the official website of the RTO and select the ‘Vehicle Status’ option and enter the vehicle registration number to view all the relevant information such as whether the car loan exists or not.

No, you will not be able to sell your car without removing the hypothecation. To transfer the ownership of the hypothecated vehicle you need to get the No Objection Certificate from the financier mentioning the closure of the loan.

For the removal of hypothecation, submit the application to the RTO before expiration of NOC. Form 35 will be issued by the bank, mentioning the removal of HP.

It generally takes two to three weeks to issue the NOC by the bank and after receiving the NOC, visit the RTO to remove the hypothecation along with the previous vehicle’s registration number and smart card.

Yes, you should remove the hypothecation from RTO for your vehicle if the loan amount has been paid in full to the lender. Make sure to obtain the NOC from the bank after the loan has been paid completely to ensure that there is no balance of your loan.