Car Loan Hypothecation Removal: Steps, Documents and Fees

Car loan hypothecation removal is the process of terminating the lender’s hypothecation entry from a vehicle’s Registration Certificate (RC) after the car loan has been fully repaid and closed. When a vehicle is financed, the lender’s interest may be recorded on the RC as hypothecation. After the loan is closed, the borrower needs to complete the applicable termination process through the concerned transport authority. Form 35 is the prescribed notice for termination of a hire-purchase, lease or hypothecation agreement under the Central Motor Vehicles Rules. Removing the entry keeps the vehicle record aligned with the completed financing agreement. It may also be relevant when you sell, transfer or otherwise deal with the vehicle. Before starting the process, confirm that the loan account is closed and keep the lender’s NOC and other applicable closure documents ready. The exact documents, fees and process may vary based on the applicable RTO requirements. 

Mandatory documents required for your car loan hypothecation removal 

The documents required for hypothecation removal depend on the applicable RTO process, but commonly include the lender's NOC and Form 35.

The Parivahan guidance lists documents that may include:

• Form 35: Signed by the registered owner and financier for termination of the hypothecation agreement.
• Registration Certificate (RC): Original RC or the applicable vehicle registration document.
• No Objection Certificate (NOC): Issued by the financier after the loan dues have been cleared.
• Loan closure proof: Certificate or document confirming that the outstanding loan dues have been cleared.
• Valid vehicle insurance: Current insurance certificate for the financed vehicle.
• Address proof: Required where applicable under the RTO process.
• PAN card or Form 60/Form 61: As applicable to the vehicle owner.
• Pollution Under Control (PUC) certificate: Required where applicable.
• Other vehicle details or documents: Any additional information requested by the concerned registering authority.

Keep the documents together before submitting your application. The exact checklist shown by the RTO should be treated as the final requirement for your vehicle.

You can remove car loan hypothecation by obtaining the lender's closure documents and submitting the required application to the RTO or through the applicable VAHAN service.

Follow these steps:

1. Clear the outstanding loan dues
    Ensure that the loan has been fully repaid and the account has been closed.
2. Obtain the NOC and applicable closure documents
    Request or access the NOC and other documents required for hypothecation termination.
3. Check your vehicle records
    Keep the registration number, chassis details and other vehicle information ready.
4. Start the hypothecation termination service
    Where available, use the VAHAN online vehicle services and select the hypothecation termination option. The official VAHAN process requires vehicle registration and chassis details followed by OTP verification.
5. Enter the required vehicle and insurance details
    Provide the information requested by the portal.
6. Upload supporting documents
    Upload the documents requested for the hypothecation termination application.
7. Pay the applicable fee
    Pay the fee displayed for the applicable service, if required. The amount depends on the applicable rules and service.
8. Complete any required verification
    Depending on the application and RTO, additional verification or an office visit may be required.
9. Check the updated RC
    Once the application is processed, verify that the hypothecation entry has been removed from the vehicle record.

The availability of online or faceless processing can depend on the vehicle, RTO and service configuration. The official VAHAN portal provides hypothecation termination as a vehicle-related service.

Fees and charges for your car loan hypothecation removal 

Hypothecation removal may involve applicable RTO fees and other charges depending on the vehicle, state and service used. Do not assume that hypothecation removal has one standard fee across India. The Parivahan guidance states that the appropriate fee is payable under Rule 81 of the Central Motor Vehicles Rules, 1989.

You may therefore need to account for:

Check the applicable fee before submitting the request or making payment. Avoid relying on older fee figures because government fees and service charges may vary. The concerned RTO and lender's current applicable schedule should be used to confirm the amount.

Steps to request car loan closure documents through Bajaj Finance

After your car loan is fully repaid, you can use Bajaj Finance's available digital service channels to access or request relevant loan documents and support.

To check your loan account:

1. Open the Bajaj Finance App or access My Account.
2. Sign in using your registered mobile number and OTP.
3. Go to your loan account under the relevant Service, My Relations or loan section.
4. Open the loan details and check the closure status.
5. Look for available options relating to your NOC, loan closure documents or service requests.
6. If the required document or service is not available online, raise a request through the available support option.

Bajaj Finance states that customers can use My Account or the app for loan-related service requests and that a car loan NOC can be requested after full repayment. Keep your Loan Account Number (LAN), registered mobile number and payment or closure details available if you need to raise a service request.

Essential documents to keep after car loan closure 

Keeping key loan and vehicle records after car loan closure helps you verify that the finance agreement has ended and supports the hypothecation removal process. Retain copies of the documents issued or acknowledged during closure, along with the updated vehicle records after the lender’s hypothecation entry is removed.
 

• Loan closure or no-dues confirmation: Keep proof that the outstanding loan dues have been cleared and the account has been closed.
   
• No Objection Certificate (NOC): Retain the NOC issued by the lender for the vehicle.
   
• Form 35: Keep the applicable copy of Form 35 where it is provided for termination of hypothecation.
   
• Payment or closure acknowledgement: Retain receipts or acknowledgements related to the final loan payment and closure.
   
• Updated Registration Certificate (RC): Keep the updated RC showing that the hypothecation entry has been removed.
   

These records can help you establish the loan closure and support future vehicle-related transactions. Keep them accessible even after the hypothecation removal process is completed.