How to Remove Vehicle Hypothecation from RC – Online & Offline (2025 Guide)

A hypothecation on your vehicle means your bank or lender has a legal claim on it until the loan is fully paid off, and this is recorded on your RC.

Bought your car or bike on loan? Then your RC likely shows hypothecation of the vehicle — your lender’s legal claim until you finish paying off the loan. The process to remove hypothecation from RC is called hypothecation termination, and it’s essential for full ownership and smooth resale.

The good news? You can now complete much of the RTO hypothecation removal process online through Vahan Citizen Services. This step-by-step guide explains what hypothecation is, why you should remove it, how to do it both offline and online, hypothecation charges, required documents, how to check your vehicle hypothecation status, and more.

It’s time for you to start reading.

Let’s clear up what hypothecation is first. In vehicle finance, hypothecation is the lender’s legal right on your bike or car until the loan is repaid. This link is officially noted in your Registration Certificate (RC).

Think of it like this:

• Hypothecation of a vehicle means your RC says the vehicle is pledged to your bank.

• Your bank will issue a hypothecation agreement at loan disbursal.

• After loan closure, you need to start the hypothecation termination to update your RC.
  

So, a bank’s NOC alone doesn’t remove the hypothecation — you have to update it with the RTO too.

Here’s why you should remove hypothecation from RC as soon as your loan is cleared:

• Full ownership: Once you complete the RTO hypothecation removal process online or offline, your RC is lien-free.

• Better resale: Buyers prefer vehicles without any active hypothecation of vehicle records.

• Hassle-free insurance: Many insurers require a clean RC for claim processing.
  

Before visiting the RTO or starting the hypothecation termination online, prepare these:

Document	Description
Form 35	Official request for hypothecation termination, signed by the bank
Bank’s NOC	No Objection Certificate from lender showing loan closure
Original RC	Vehicle Registration Certificate with hypothecation marked
Insurance Copy	Valid motor insurance certificate
PUC Certificate	Pollution Under Control certificate
ID & Address Proof	Aadhaar, passport, or utility bill
Hypothecation Agreement	Original agreement copy (sometimes needed)

Tip: Double-check that your hypothecation agreement and bank NOC match your RC details exactly.

Even if you update your hypothecation status online, you must visit the RTO once to submit physical documents.

1. Obtain Form 35 from RTO or Download

You’ll need Form 35 for hypothecation termination. Get it from your local RTO or download Form 35 PDF.

2. Get Lender’s NOC & Fill Form 35

Ask your bank for the NOC. They’ll check that all EMIs are cleared, issue the NOC, and co-sign Form 35.

Tip: Form 35 must be signed by both you and the bank officer — with the bank’s seal.

3. Submit at RTO & Pay Fees

Go to your local RTO counter with Form 35, the bank NOC, your hypothecation agreement, and other required documents.

Pay the hypothecation charges — they’re nominal but vary slightly by state:

Vehicle Type	Hypothecation Termination Fees (Approx.)
Two-Wheeler	₹100–₹150
LMV/Car	₹150–₹200

Keep your receipt safe.

4. Receive Acknowledgment Slip

After submission, the RTO will give you an acknowledgment slip. This proves you’ve applied to remove hypothecation from RC.

Processing Time: It usually takes 15–30 days for the RTO to update your records and issue a new RC.

Want to track or complete the final update? Here’s how to use Vahan Citizen Services for the RTO hypothecation removal process online:

1. Navigate to Vahan Citizen Services

Visit Vahan Citizen Services. Click on ‘Online Services’ > ‘Vehicle Related Services’. Choose your state and RTO.

2. Select “Hypothecation Termination” Service

Under the services menu, click on ‘Hypothecation Termination’.

Screenshot Carousel Tip: Visual steps help you find this faster.

3. Enter Vehicle Reg. No. & Chassis Digits

Fill in:

• Vehicle registration number

• Last five digits of your chassis number

• Security captcha
  

Click ‘Generate OTP’ and verify using the OTP sent to your registered mobile number.

4. Upload Acknowledgment Slip & OTP Verification

Upload your RTO slip as proof that you’ve submitted your termination request offline. Confirm with OTP.

5. Check Hypothecation Termination Status

Always check your hypothecation termination status later:

• Go back to Vahan.

• Enter vehicle number + chassis digits.

• Click ‘Check Status’. It will show ‘Pending’, ‘Approved’, or ‘Rejected’.
  

Tip: If rejected, visit the RTO with your receipt and missing docs.

Here’s what to expect for your RTO hypothecation removal process online or offline:

Action	Hypothecation Charges (₹)	Processing Time
Termination Submission	₹100–₹200	15–30 Days
Smart RC Re-issue (if needed)	₹200–₹400	Additional 10–15 Days

You can check vehicle hypothecation status anytime to see if your RC still shows a lien:

1. Go to Vahan RC Status.

2. Enter your registration and chassis number.

3. Click ‘Status’ — it will display if hypothecation of vehicle still exists.
   

Some states offer SMS services too. Check your local RTO site for details.

• Fee Calculator Widget: Estimate hypothecation charges by state & vehicle type.

• State Selector Map: Locate your RTO & service centres.

• Downloadable PDF Checklist: All documents & steps in one file.
  

FAQs

Can I sell my vehicle without removing hypothecation from the RC?

A.  No — buyers need a clean RC. Complete the hypothecation termination first.

What if RTO rejects my hypothecation removal application?

A.  Usually, it’s due to missing docs or a signature mismatch. Take your slip and visit the RTO to fix it.

How long does hypothecation removal from RC take?

A. Typically 15–30 working days. Use Vahan Citizen Services to track your hypothecation termination status.

• Hypothecation means the bank/financier holds a lien on your RC until loan repayment.

• To terminate, you’ll need Form 35 and your bank’s NOC.

• Pay hypothecation termination charges (₹100–₹200).

• Complete your record update and track your hypothecation status online.

• Download our handy checklist and stay penalty-free.

Conclusion

Clearing your hypothecation of vehicle is the final step to 100% ownership. Use your bank’s NOC, Form 35, and the simple RTO hypothecation removal process online to keep your RC up to date. Check your vehicle hypothecation status on Vahan, pay your hypothecation charges, and drive worry-free!

Bookmark this guide and share it with anyone paying off a vehicle loan this year. For more helpful compliance tips, keep following Ecozaar — your trusted source for green mobility!