why to remove Hypothecation From RC

Following are the benefits of  removing hypothecation from RC : 

• 100% ownership – You have complete control over your vehicle once the hypothecation is removed from RC. You can sell, transfer, scrap or modify your vehicle as you wish. Consent of financier is no longer required. 

• Clean title – Hypothecation termination ensures that the you are the only owner . Bank has no say in it. A clean title makes selling or transferring the vehicle easier. 

• Insurance benefits - Insurance claims becomes complex procedure , if its under hypothecation from the financier . 

• Resale value – When you go to sell your vehicle, dealers often bring down the price based on the basis of pending documentation. Also more you delay, more is the chances that Bank NOC gets expired. It will further bring down the value of the vehicle. With these complications, your negotiation power reduces.

• Hassle-free documentation – You need to take consent from financier every time for every RTO process such as duplicate RC, vehicle NOC, RC transfer etc. Once Hypothecation removed from RC, Its no longer required. 
  

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To book order or for any query or concern please speak to one of the consultants over phone or chat. You can also write to us. We will get back to you. 

Hypothecation Termination

Hypothecation termination or Hypothecation cancellation is to be done after complete re-payment of loan on the vehicle. If you are wondering "how to remove hypothecation from RC online "? Worry not ! Itzeazy provides service for RTO hypothecation removal process online. While applying for HP termination, its important to understand hypothecation termination process, documents required for hypothecation termination, hypothecation removal charges. 

Itzeazy provides service for Hypothecation removal or HP cancellation in Delhi, Gurgaon, Faridabad, Noida, Ghaziabad, Bangalore, Pune , Mumbai, Chennai and Hyderabad. It guides you about the documents required for hypothecation termination and helps in completing hypothecation cancellation procedure at RTO.  

Application for hypothecation termination  is to be submitted in the RTO where vehicle is registered.

hypothecation termination meaning 

In general, people make the mistake of believing that after paying off their vehicle loan EMIs, everything is finished and taken care of automatically. However, Hypothecation removal process needs to be done at the RTO office where the vehicle was registered in order to make sure that loan or hypothecation is not reflected in the RTO record against the vehicle . 

If you don't remove hypothecation from your RC , in the normal circumstances it does not create problem. However when you apply for other RTO related process like Duplicate RC, transfer of ownership of vehicle , vehicle NOC then its mandatory to remove hypothecation from the RTO record first.

There is validity period mentioned on the bank NOC paper. If you don't submit it to the RTO within that period , you will have to again take it from the bank. Bank charges for issuing loan closure letter second time. Also there will be additional hassle in going to the bank. To avoid its advisable to go for HP termination process immediately once you pay off your vehicle loan.      

vehicle hypothecation cancellation procedure

If you have purchased vehicle after taking loan from the bank or any financial institution, on the RTO record this loan would be mentioned . On the RC too vehicle will be shown hypothecated to the particular bank or financial institution. 

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Once loan is repaid fully , it has to be removed from the RTO record of the vehicle. The process for removing loan from the RTO record of the vehicle is called HP termination. 

Following are the steps for HP termination process :

• Collect physical copy of Bank NOC and form 35 from the  bank
  
• Apply online on parivahan portal
  
• Pay requisite RTO fees
  
• Submit application for hypothecation termination along with supporting documents in the concerned RTO
  
• Processing of the application in the RTO
  
• Issue of new RC 
  
• Collect RC from the RTO
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DOCUMENTS REQUIRED FOR hypothecation termination

Following are the documents required for Hypothecation termination  :

• Form no. 35 duly filled
• A certificate from financier for having retained full dues from the financier (for deletion case only)
  
• Original RC
  
• Copy of Valid insurance
  
• Copy of valid pollution under control certificate
  
• Copy of address proof of the registered owner
  

Forms can be downloaded from the link  RTO forms​.​

APPLY FOR HP TERMINATION

There was hypothecation on my car which I repaid 2 years back . I got loan closure letter from the bank. The validity of it is expired. Can I apply for hypothecation termination with this expired paper ?

Ans : To apply for vehicle hypothecation cancellation, in general loan closure should be valid. Some RTOs accept expired loan closure letter . For detail info on this Pls speak to our team they will guide you.  

​My vehicle which is registered in Chennai is under hypothecation . Now I want to apply for NOC from Chennai to Mumbai . Do I need to close the loan first ?

Ans : If vehicle is under finance from bank, consent from the bank is mandatory to apply for vehicle NOC. There can be two possible scenario. Either you can close the loan and can get the NOC from the bank for loan closure or you can manage to get the work done with Loan continuation letter from the bank.  In this case you will have to take NOC from bank which is also called loan continuation letter. On the basis of this letter from bank, RTO will issue NOC .

I want to sell my car. There is loan on the vehicle. Can I sell the car without clearing the loan ?

Ans : No. Car can not be sold if there is loan running on the vehicle. Before selling it , you will have to clear the loan first.  

I have lost RC of my car. There is hypothecation on my car. Do I need consent from bank while applying for duplicate RC ?

Ans :   To apply for duplicate RC, consent of bank is required on form 26, if vehicle is hypothecated to the bank.

Can I cancel my hypothecation online?

Ans : Process for hypothecation cancellation is not online completely. RTO fees can be deposited online. Application along with supporting documents needs to be submitted online. 

However, process of Itzeazy is completely online and can be availed in just few clicks. 

What is HP termination?

Ans : When you re-pay your vehicle loan fully, bank gives you loan closure letter & set of form 35. These documents needs to be submitted to the RTO. After that RTO removes hypothecation from vehicle record and gives you new RC. This process is called HP termination.

How do I cancel my HP on my two wheeler?

Ans : Following are the steps to terminate hypothecation from two wheeler :

1. Collect loan closure letter from the bank
2. Submit application for HP termination in the concerned RTO along with supporting documents
   
3. Deposit requisite RTO fees 
   
4. Application processing and HP termination done
   
5. New RC issued  
   

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​Is it necessary to remove hypothecation?

Ans : Removing hypothecation from RTO record is necessary for 2 reasons :

• NOC letter for hypothecation termination issued by bank is normally valid for 3 months period. If you don't finish the task at RTO within three months, you will gain have to request bank to issue NOC. 
• Without removing hypothecation you can not do any transaction in the RTO such as RC transfer, NOC for other state, Duplicate RC etc.
  

So, its advisable to remove hypothecation from RTO record once you close the loan. 

​Is it possible to remove hypothecation online?

Ans : Government process for hypothecation removal is not online completely. Application can be filled up online . RTO Fees can be deposited online. Forms and supporting documents needs to be submitted physically to the RTO. However, Itzeazy provides online service for hypothecation removal from RC in Pune and Pimpri Chinchwad area .    

What are the documents required for hypothecation termination?

Ans : Following are the documents required for hypothecation termination :

• 2 Nos. of Form 35 duly filled & signed
• NOC from the financier for having retained full dues from the financier (for HP termination case only)
  
• Original RC
  
• Copy of Valid insurance
  
• Copy of valid pollution under control certificate
  
• Copy of address proof of the registered owner
  

How do I check my hypothecation status?

Ans : Following are the steps to check status of hypothecation :

• Visit the website https://parivahan.gov.in/parivahan/
• Click on the link - Informational services
  
• Select the  option - know your vehicle details
  
• Register on the site
  
• Enter the vehicle number in the search box
  
• You will get vehicle hypothecation detail 
  
• If vehicle record does not  show any hypothecation detail, hypothecation has been removed.   

How long is NOC valid for hypothecation removal ?

​Ans : NOC given by private banks are valid for three months. Government banks normally don't write validity period on the NOC letter given for hypothecation removal. There are RTOs who insist on bringing fresh NOC from the bank in all the cases.

So , its advisable to apply for removal of  hypothecation from the RTO within three month to avoid the hassle of getting fresh NOC from the bank.   ​

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Is hypothecation removed automatically?

Ans : No. Hypothecation is not removed automatically. Bank issues NOC certificate and form 35 set for vehicle loan closure. Application for hypothecation removal should be submitted in the concerned RTO for HP termination from the RTO record.

How to check if RC has hypothecation?

Ans : The status of hypothecation can be checked from Parivahan website . If vehicle has a loan it would be shown as financed from the bank. 

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​Is form 35 and NOC the same?

Ans : No. Form 35 and NOC are not the same . NOC is given by the financer once you repay the loan on vehicle completely. It is stated in the NOC that loan has been closed and bank has no objection in the removal of hypothecation from the RTO record against the said vehicle.

Form 35 is the RTO application form used for the hypothecation termination from the RTO record of the vehicle.2 sets of form 35 is to be submitted in the RTO for hypothecation cancellation along with supporting documents. This form 35 should be signed by both bank as well as registered owner.

I have purchased a bike which is registered in other state. There is hypothecation on it. Who will apply for hypothecation termination in the RTO?

 Ans : Since bike is still in the name of previous owner, so seller should apply for hypothecation termination in the RTO. 

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​There was loan on my car. It has been re-paid fully and bank has provided me soft copy of NOC for loan closure and form 35 set. Whats the next procedure to remove hypothecation from RTO?

​Ans : Vehicle hypothecation from RTO can not be done with soft copy of bank NOC and form 35. Original bank NOC and form 35 is required to apply for hypothecation termination in the RTO. Please contact your bank and get the physical copy of bank NOC and form 35 having original seal and sign of the bank on it. After this you need to submit application for hypothecation termination in the RTO where vehicle is originally registered.   

How many days does bank NOC for hypothecation be valid ?

Ans : Private bank NOC for hypothecation is normally valid for 3 months. Govt. banks normally issue bank NOC without validity mentioned on it. You should apply for hypothecation removal in the RTO before bank NOC gets expired. In many RTOs they dont accept old hypothecation paper of Govt. banks also. So its advisable to apply for HP termination in the RTO as soon as you close your vehicle loan and gets bank NOC paper.