My Car RC Has Hypothecation But Loan Is Already Paid Off. How To Remove HP From RC?

My Car RC Has Hypothecation But Loan Is Already Paid Off. How To Remove HP From RC?

Here is a guide on how to remove HP from RC. The ‘Finance Company Hypothecation’ can be removed from the registration certificate after loan repayment

Many car buyers purchase a new car after availing finance from their bank. All vehicles that have been financed come with a ‘Finance Company Hypothecation’ can be removed from the registration certificate once the loan has been paid off. Here’s a guide to remove HP from RC.

Mostly, a car owner starts looking for a reliable ‘agent’ to get any RTO-related work done. However, most of the official procedures have got a lot simpler in recent times, thereby mitigating the need for hiring these agents. Based on your car’s registration, visit the relevant RTO (for example, cars with HR-26 registration need to visit the Gurgaon RTO). That said, the procedure remains largely similar at all the RTOs across the country. Here are the steps to follow to remove HP from RC –

Step One – Obtain the required documents

Once you have paid off the loan, your bank or the financial institution will provide you with a letter stating closure of the loan with the official letterhead. You’ll require to provide the NOC to the RTO. Furthermore, you need to have two copies of Form 35. Finally, please note that the NOC is mostly valid for only 90 days and hence, you must submit your application to the RTO days before the document expires. Also, it’s a good idea to carry some extra copies of all these documents.

Also Read – How to figure out the correct resale value of your second-hand car.

Step Two – Submit your application to remove HP from RC

Once you’ve obtained the required documents, visit the relevant RTO. You’ll see several counters with clearly marked numbers on them. Approach an officer and ask him about the counter you need to visit. Once you’re at the concerned counter, it’s a pretty straight-forward procedure.

Here are the documents you need to submit to the RTO –

  • No Objection Certificate (RTO copy)
  • Form 35 (Both the copies, duly signed by yourself)
  • Registration certificate – Original
  • Aadhaar – Copy only
  • Insurance policy – Copy only
  • PUC – Copy only
  • Owner’s Aadhaar card – Copy only
  • Owner’s photograph
  • Print of payment receipt (if paid online)

Staple all the documents together and proceed with the following steps to get the HP removed from RC.0

  • Get all your documents checked by the verification officer at the RTO. You can ask the executive at one of the counters to help you locate him in case you can’t do it yourself.
  • Get your details entered into the RTO’s computer-based data system. Next, move to the counter that is in charge of your registration number series. Hand over the verified documents to the concerned officer at the counter. He will next approve the details that were fed to the computer system.
  • Then, you need to go to the payment counter and pay a fee of Rs 100. Next, return to the previous counter and hand submit all your documents along with the payment receipt to him. He will issue you a date on which you need to visit the RTO again. During the next few days, the RTO will verify the attached documents and obtain approval from the concerned officer.

Once documents are summited to the RTO, the vehicle owner can have a real-time update  about the status of the progress of hypothecation termination at the RTO through his application number or registration number by visiting-  https://vahan.parivahan.gov.in/vahanservice/vahan/ui/appl_status/form_appl_regn_status.xhtml

Also Read – How Can You Get A Better Resale Value Of Your Car – 10 Tips

Step Three – Verify and Submit Acceptance Form, Pay the fee for new RC smart card

On your next visit to the RTO, you need to go to the counter where you submitted your documents. The officer will return your documents along with an ‘’Acceptance Form’’, which has all the details that are mentioned on your vehicle’s registration certificate. You need to go through the form and check if any of the data needs to be corrected. In case of an error, you need to tell the officer about, who will make the required corrections to the RTO’s computer system immediately.

Next, you will need to sign the acceptance form and hand it back to the officer. After this, he will ask you to visit another counter, where you need to pay the fee for the new smart card. After the payment, you will be given a receipt and a date to collect the Smart Card RC. Visit the RTO again on the allotted date to collect the registration certificate.

Payments can be now also made online by visiting – https://parivahan.gov.in –> Online Services –> Vehicle Related Services –> Enter your vehicle number –> Choose your service –> Misc. You will have to provide the concerned officer with the online payment receipt on your visit to the RTO.

As can be figured out from the steps above, the procedure to remove HP from RC is quite easy and can be completed in a few easy steps. However, in case you are pressed for time, hiring a reliable agent isn’t a bad idea.

Are you planning to sell your used car? We, at CARS24, can give you a good price for your second-hand vehicle. Visit us at CARS24.com or call us @ 1800 258 5656 to sell your car in 1 visit.

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