Paid Off Your Car Loan But Can't Sell Your Vehicle? Check This Small Paperwork Issue
Car Loan Paid Off, Still Can't Sell? Check This Crucial Paperwork Snag!
N
News18•22-03-2026, 16:34
Car Loan Paid Off, Still Can't Sell? Check This Crucial Paperwork Snag!
•Even after paying off a car loan, the bank's name often remains registered on the vehicle's official documents, causing issues when selling.
•When a car is bought with a loan, the bank's name is linked to the vehicle in RTO records through 'Hypothecation', noted on the Registration Certificate (RC).
•The problem arises when owners forget to remove this hypothecation from the RC after the loan is fully paid, making the vehicle not 'clean' for transfer.
•To remove the bank's name, obtain a No Objection Certificate and Form 35 from the bank, then apply for 'Hypothecation Removal' at the RTO or via the 'Parivahan' website.
•After verification and a fee, the RTO will issue a new, clean RC, allowing for smooth vehicle transfer.
