You have paid the final EMI on your car loan - now get the hypothecation removed from your RC. That starts with a No Objection Certificate and Form 35 from your bank. This guide explains how to request the NOC, realistic timelines for private banks, PSU banks and NBFCs, what documents you receive, and how to submit them at the RTO for a clean RC.
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When you took a car loan, the bank registered a hypothecation (lien) on your vehicle's RC. Until it is removed, the RC shows the vehicle as encumbered and you cannot freely sell it. Once every rupee - final EMI plus any foreclosure charges - is paid, you are entitled to a No Objection Certificate from the bank. You submit this NOC with Form 35 to your RTO to remove the hypothecation and get a clean RC. Hypothecation does not disappear automatically; you must initiate the removal.
After your final payment, the loan account must first show as "closed" in the bank's system - this takes 3-7 working days. Then apply for the NOC at the branch or through net banking. Many private banks (HDFC, ICICI, Axis, IndusInd) offer online NOC requests, often emailed as a PDF.
Do not confuse "last EMI deducted" with "loan closed" - the NOC can only be issued after formal account closure.
You should get two documents: the NOC letter on official letterhead, signed by an authorised bank officer, and Form 35 - the Notice of Termination of the hypothecation agreement. Verify that the registration number, chassis number, engine number and owner name on Form 35 exactly match your RC.
The NOC is typically valid for 90 days. Submit it to the RTO before it expires, or you will need a fresh one (banks may charge a re-issue fee).
Visit your RTO with Form 35, the original NOC, your original RC and ID proof, and pay a small RC-update fee (about ₹200-350) plus the ₹200 smart card fee. In Vahan 4.0 states you can start online via the Parivahan portal under "Removal of Hypothecation". After processing, a new RC issues with the Financier field blank.
Tip: download your updated RC from DigiLocker or mParivahan to confirm the Financier field is blank without waiting for the physical card.
RBI requires banks to issue the NOC within 30 days of loan closure. If yours drags, follow our guide on what to do when the bank delays the NOC, read the full hypothecation removal guide, and check your RC hypothecation status.
Private banks usually issue the NOC in 7-10 working days. PSU banks such as SBI, Bank of Baroda and PNB can take 15-30 days, and NBFCs like Mahindra Finance and Shriram Finance take 10-15 days. Under RBI's Fair Practices Code, all banks must issue the NOC within 30 days of loan closure.
You should receive an NOC letter on the bank's official letterhead, signed by an authorised officer, and a pre-filled Form 35 (Notice of Termination of Agreement). A loan closure or no-dues certificate is useful supporting evidence. Check that every detail on Form 35 matches your RC before submitting.
The bank NOC is typically valid for 90 days from the date of issue. You must submit it to the RTO within this window. If it expires, you must request a fresh NOC from the bank, which may charge a small re-issue fee of around ₹200-500.
In many Vahan 4.0 states you can upload Form 35 and the bank NOC through the Parivahan portal under 'Removal of Hypothecation', pay the fee online and receive the updated RC by post. Maharashtra, Delhi, Karnataka, Tamil Nadu and Telangana are among the more advanced states. Some states still require one physical visit.
If your bank was merged, the successor bank takes on all obligations, including issuing NOCs for paid-off loans - contact the successor bank's branch where the loan was held. For banks under liquidation, the RBI-appointed liquidator handles such requests, so approach the relevant RBI office for guidance.