Hypothecation removal, to put it simply, is the process of transferring ownership of the car from the lending company to your name. When you purchase a car with a loan, the lender hypothecates the vehicle. It indicates that while you are free to use the vehicle as you see fit, ownership will stay with the lender up until the full sum is repaid. If you do not make your payments, the lender will seize your four-wheeler and sell it at auction to recoup their losses. With regard to the removal of the hypothecation, it is also noted in your RC book. You must therefore ask the RTO to revoke the hypothecation as soon as you pay off the entire amount and close your loan account.
The name of the bank or loan licence company will no longer need to be removed from the vehicle’s registration certificate (RC) for a cost. The software has been enhanced by the Department of Transportation. Now, for just Rs. 40 in user fees, you can get the loan erased from your RC account.
Actually, the transport department enters the name of the bank or financing business in the RC of the car when someone funds a loan vehicle. At the time of registration itself, the name submission cost is subtracted. The loan must be taken out of the RC once it has been paid back. There are no fees of any type specified for this. However, the government was still charging Rs 340 for two-wheelers. The fees for automobiles and large vehicles were higher.
Charges for hypothecation removal can also be made to the RTO via online platforms. Check the Online Services option on the government website Parivahan Seva. You can submit your state and RTO office information through the Vehicle Related Services section of that website. You will be taken to the portal to make an online application for the hypothecation cancellation form once you provide the Registration and Chassis numbers. Utilizing online platforms would be a better choice in light of the present pandemic situation because it will prevent you from making many visits to the RTO office.
By upgrading the programme, the agency has eliminated the cost. Vineet, who oversees the Common Service Center outside the RTO, claimed that while the online charge for two-wheelers was previously set to be Rs 340, it is now only Rs 40. Dinesh Pathoi, RTO (Administration), stated that a letter was sent to the headquarters to eliminate the fees; perhaps the headquarters took care of the issue.