Hypothecation Services HOMEPAGE > Compliance Services > Hypothecation ServicesWhat is Hypothecation?Understanding the Role of Hypothecation in Vehicle FinancingHypothecation refers to the process of adding, continuing, or removing a financial institution’s lien on a vehicle’s Registration Certificate (RC). This applies when a vehicle is purchased on loan and remains under the financer’s claim until the loan is fully repaid.1. Hypothecation AdditionWhen a vehicle is financed through a bank or financial institution, hypothecation must be added to the RC.Process of Hypothecation AdditionAs per Rule 60 of the Central Motor Vehicles Rules (CMVR), 1989, the vehicle owner must submit an application in Form 34, duly signed by both the owner and the financer, along with:Original Registration Certificate (RC) Duly filled Form 34 (signed by owner & financer)Valid Insurance CertificateBank Loan Sanction/Approval Letter (if applicable)PUC Certificate (Pollution Under Control)Appropriate fee as per Rule 812. Hypothecation ContinuationIf a vehicle loan is restructured, transferred, or refinanced, the hypothecation must be continued in the RC.Process of Hypothecation ContinuationForm 34 signed by the owner & new financer (if applicable)Updated Bank Loan/Refinance Approval LetterOriginal RC reflecting the existing hypothecationValid Insurance CertificatePUC CertificateAppropriate fee as per Rule 813. Hypothecation Termination (Removal from RC)Once the vehicle loan is fully repaid, the hypothecation must be removed from the RC, making the owner the sole legal owner of the vehicle.Process of Hypothecation TerminationAs per Rule 61 of CMVR, 1989, the vehicle owner must submit an application in Form 35, signed by the financer, along with :Original Registration Certificate (RC)Form 35, duly signed by the financer & ownerNo Objection Certificate (NOC) from the financerValid Insurance CertificatePUC CertificateAppropriate fee as per Rule 81What Does the Law SayThe Legal Framework for Hypothecation of VehiclesThe process of hypothecation is governed by the Central Motor Vehicles Rules (CMVR), 1989.LAW: Rule 60 & 61 of CMVR 1989Read MoreHow Do We HelpExpert Assistance for Managing Hypothecation on Your VehicleShimnit provides seamless assistance for Hypothecation Addition, Continuation, and Termination by :Here’s how Shimnit helps you stay compliant: Guiding on document submission Coordinating with RTO authorities Tracking application status Ensuring smooth and timely processing Shimnit ensures that all necessary documents are properly prepared and submitted, avoiding delays. We provide clear guidance on what documents are required for each stage of the hypothecation process. Prev NextWe act as a liaison between you and the RTO authorities, ensuring that all communications are streamlined and any issues are resolved quickly, speeding up the hypothecation addition or termination process. Prev NextOur team keeps a close eye on your application’s progress, providing you with timely updates so you are always informed about the status of your vehicle hypothecation. Prev NextWe make sure that all steps are followed meticulously to ensure the hypothecation continuation, addition, or termination is processed efficiently and without unnecessary delays. Prev NextHere’s how Shimnit helps you stay compliant: Guiding on document submission Shimnit ensures that all necessary documents are properly prepared and submitted, avoiding delays. We provide clear guidance on what documents are required for each stage of the hypothecation process. Coordinating with RTO authorities We act as a liaison between you and the RTO authorities, ensuring that all communications are streamlined and any issues are resolved quickly, speeding up the hypothecation addition or termination process. Tracking application status Our team keeps a close eye on your application’s progress, providing you with timely updates so you are always informed about the status of your vehicle hypothecation. Ensuring smooth and timely processing We make sure that all steps are followed meticulously to ensure the hypothecation continuation, addition, or termination is processed efficiently and without unnecessary delays. With Shimnit’s expertise, managing your vehicle’s RC Hypothecation process is quick and hassle-free!FAQ’s What is hypothecation in vehicle financing? Hypothecation in vehicle financing refers to the process where the vehicle acts as collateral for a loan, while the borrower retains ownership and possession. In the event of a loan default, the lender can seize the hypothecation vehicle to recover the loan amount. How can I check if my vehicle is under hypothecation? To check if your vehicle is under hypothecation, you can verify the hypothecation addition in the vehicle’s Registration Certificate (RC) issued by the RTO. The RC will indicate if there is any lien or hypothecation vehicle listed under the owner’s name. What are the steps to terminate hypothecation from my vehicle? The hypothecation termination process involves the following steps: 1) Clear the outstanding loan or dues with the lender. 2) Request a No Objection Certificate (NOC) from the lender. 3) Submit the NOC and required documents to the RTO for the removal of hypothecation from the RC. 4) The RTO will then update the RC to reflect the hypothecation termination. What documents are required for hypothecation termination? To complete the hypothecation termination, you will typically need the following documents: 1) The original Registration Certificate (RC) of the vehicle.2) A No Objection Certificate (NOC) from the lender. 3) A copy of the loan closure statement or payment receipt.4) Application for the removal of hypothecation (available at the RTO). Can hypothecation be continued after the loan tenure ends? No, hypothecation continuation after the loan tenure ends is not possible. Once the loan is fully repaid, the lender is required to provide a No Objection Certificate (NOC) to terminate the hypothecation vehicle. What happens if I fail to remove hypothecation after loan repayment? If you fail to remove hypothecation after loan repayment, it could result in complications during the sale or transfer of ownership of the vehicle. The hypothecation vehicle will still be listed with the lender’s name, which could delay the sale process or cause legal issues. How do I get an NOC for hypothecation removal? To get an NOC for hypothecation removal, you must request the lender for a No Objection Certificate (NOC) after clearing all outstanding dues. The NOC confirms that the lender has no claim on the vehicle, enabling the hypothecation termination process at the RTO.