Remove Hypothecation from RC

When you purchase a vehicle through a loan, the financing bank or NBFC places a hypothecation (HP) on the vehicle Registration Certificate (RC). This means the bank has a legal claim on the vehicle until the loan is fully repaid. The RC will show "Hypothecated to [Bank Name]" and the bank holds the original RC as collateral. While the hypothecation is active, you cannot sell or transfer the vehicle without the bank's consent.

After you have fully repaid the vehicle loan, it is essential to remove the hypothecation from the RC to get a clean Registration Certificate in your name without any bank lien. Many vehicle owners forget or delay this step, which can cause complications when they try to sell the vehicle or apply for a new loan against it. The HP removal process is straightforward and can be initiated online through the Vahan Parivahan portal.

The process involves obtaining a No Objection Certificate (NOC) from the bank, submitting the application online, and visiting the RTO to submit original documents. The RTO will cancel the hypothecation entry and issue a new RC without the HP notation. The entire process typically takes 15-30 days from application to receiving the new RC.