After repaying car loan, how to remove hypothecation in records online

Securing absolute ownership requires a formal update to the Vahan portal to prevent legal hurdles and insurance complications during future sales

Even after you have fully repaid your car loan, the lender remains the registered lien holder on the vehicle's registration certificate (RC) until you formally terminate “hypothecation”.

 

Removing the hypothecation tag — it links the car to the bank or finance company as collateral — can be done online in most states through the VAHAN portal, making the process quick and transparent.

 

Removing hypothecation

 

When a vehicle is bought on loan, the lender’s interest is recorded in the RC as hypothecation. Even after the last loan installment is paid, hypothecation is not removed automatically. This can create problems if you plan to:

 

 

• Sell the car
• Transfer ownership
• Apply for re-registration in another state
• Update RC details
• Show a clear title of ownership

 

Online hypothecation removal now available

 

Vehicle owners can now apply for hypothecation termination online through the government’s VAHAN service portal. The system allows users to submit details, upload documents, and pay the fee digitally.

 

However, the process is not fully paperless in every state. Some transport authorities still require a physical submission of signed forms to the Regional Transport Office (RTO) and lender, even after online filing.

 

Documents you will need

 

Before starting the application, keep these documents ready:

 

• No Objection Certificate from the lender
• Form 35 (signed by lender and borrower)
• Valid motor insurance certificate
• Original RC 

Missing paperwork is the most common reason for delays or rejection.

 

Step-by-step process on VAHAN portal

 

The application can be filed through the VAHAN vehicle services website. The broad steps are:

 

• Log in to the VAHAN vehicle services portal
• Choose “Vehicle Related Services” under online services
• Enter registration number and chassis number
• Verify using OTP sent to your registered mobile number
• Select “Hypothecation Termination” service
• Fill insurance and vehicle details
• Upload required documents through the document upload section
• Check fee details and make online payment

 

After submission, you can track the status online. In some cases, you may be asked to visit the RTO for verification.

 

Fees and timelines

 

A prescribed fee applies for hypothecation termination. This varies by state and is shown during the online application stage. Processing time also differs across RTOs, typically ranging from a few days to a few weeks.

 

Loan closure process does not end with the final EMI. Updating the RC to remove hypothecation ensures your vehicle’s legal and financial records are fully in your name.