Paid Off My Car Loan. What Next?
It was a moment of pride when I bought a car for myself in Kerala, India back in 2012. I paid off my car loan from a financial company a few months back but the whole process of hypothecation cancellation intimidated me so much that I did full thorough research on the Internet before proceeding further. Some online posts did not answer my questions completely even if they were fairly detailed. This article is an attempt to help everyone in Kerala breeze through the car hypothecation cancellation procedure.
Please note that the car hypothecation cancellation procedure, though more or less the same, might vary for each RTO. I had done this from Ottapalam RTO.
Disclaimer: This article is an account of my own personal experience back in 2015. The fees and steps might be different now. Please also read the comments below from readers who have helpfully provided the latest updates about the process.
What Is Hypothecation and Hypothecation Cancellation?
When you buy a car on a loan, this fact is marked on the Registration Certificate (RC) of your car. This is known as hypothecation. When you fully pay off your loan, you want this fact to be removed from your RC, to claim complete ownership. This is termed hypothecation cancellation.
Step 1: Collecting NOC, Form 35, Confirmation Letter from Financial Company
Once your loan payment is complete, the next step is to obtain a NOC (No Objection Certificate) from your financial company (which might be a bank in most cases or a private company in my case).
The financial company will also provide 2 copies of Form 35 (Hypothecation Cancellation Form) and a confirmation letter along with the NOC. Keep these documents safe. The NOC (which is a certificate that implies the financial company has no objection to you claiming complete ownership of the car now that the full loan payment has been done) along with the Form 35 documents and confirmation letter need to be submitted at RTO.
In summary, ask for these documents from your financial company as soon as you complete your loan payment:
- NOC (No Objection Certificate)
- 2 signed copies of Form 35
- Confirmation letter
Step 2: Applying Online and E-Payment
A hypothecation cancellation fee of Rs. 175/- (this was in 2015; fees might vary now) can be paid online from http://www.keralamvd.gov.in/ website. You need to print out the receipt and keep it along with other documents (more on this in the next section) which are to be submitted at RTO.
Please note that once you make payment, you are supposed to visit the RTO within 3 working days. So plan your visit to RTO on a suitable day and pay fees accordingly beforehand.
As I was unaware of the website, I visited the RTO without making an online payment. They asked if I had applied and made an online payment and I said no. So they suggested I do this at a nearby Akshaya center. The Akshaya center in Ottapalam is just opposite the RTO building. On this note, I have to say that the people at Akshaya which I visited were the most obnoxious and least friendly people ever. I was instantly put off by their “mightier than thou” attitude. Might not be the case in all places but it made me wish I had known about the http://www.keralamvd.gov.in/ site earlier.
If you make payment at an Akshaya center, you will also be charged Rs. 25/- extra as service fees. So totally you will have to make a payment of Rs. 200 at an Akshaya center for hypothecation cancellation application and e-payment.
How to apply for hypothecation cancellation online:
- Go to http://www.keralamvd.gov.in/.
- On the right side of the page, in ‘Apply Online’ section, click on ‘Vehicles’.
- Click on ‘Apply Online’ for ‘Cancel Hypothecation’ option.
- When you click on this, your browser might alert you about a security issue. In Chrome browser, you can surpass this by clicking on ‘Advanced’ link and ‘Proceed to smartweb.keralamvd.gov.in (unsafe)’. It is perfectly safe, do not worry.
- Select RTO, enter Reg. No. and the last 5 digits of Chassis No.
- Click on Go button and complete the application process.
- Note down your application number.
How to make payment online:
- Once you apply for hypothecation cancellation and have noted down application number, click on ‘E-Payment’ in ‘Apply Online’ section.
- Click on ‘Apply Online’ for ‘e-Pay your application’.
- Select ‘Cancel Hypothecation’ option.
- Enter the Application Number in the text box given.
- Click on ‘Pay Now / E-Receipt Print’ button.
Print the fee receipt and keep it safe. As mentioned before, once you make payment, you need to submit the application documents within 3 working days.
In summary, once you receive the NOC & other documents from financial company:
- Apply for hypothecation cancellation online at http://www.keralamvd.gov.in/.
- Note down the application number.
- Make payment of Rs. 175/- online.
- Print the fee receipt.
- Visit RTO within 3 working days.
- Visit a nearby Akshaya center.
- Ask them to apply online for hypothecation cancellation and make a payment online.
- Pay around Rs. 200/- (out of which Rs. 25/- is Akshaya’s service fee).
- Collect fee receipt and keep it safe.
- Visit RTO within 3 working days.
P.S: The rates shown here are from the year 2015 when I had gone through the process. Fees might vary now.
Step 3: Create a Checklist of Required Documents
In my experience with government companies, I have noticed that they are very vague when providing information through phone calls. You might not get all the required information with just a single call. Worse, you might have to make multiple trips to the establishment again just because they skipped informing you about submitting a particular document.
If you are pressed for time like me (I am temporarily residing in another city 1 hour away from the place my car was registered) and cannot afford to take multiple trips to the RTO, make phone calls to 2-3 RTOs in your state to get a thorough understanding of which all documents need to be submitted. This helps you to finish off the whole procedure in just one visit to the RTO.
I initially called up Thrissur RTO and they told me which all documents need to be submitted but when I called up Ottapalam RTO they provided more in-depth details. One mistake I did was not asking about their work timings. So I ended up going to the RTO for the hypothecation cancellation process on a Saturday, which is when they chose to tell me that the department responsible for hypothecation cancellation does not operate on Saturdays! More reason to do thorough research before you visit the RTO since the hypothecation cancellation department operates only on working days plus you wouldn’t want to take leave from office multiple times.
Mostly, you will need to submit the documents on a working day (Saturday excluded) between 10 A.M and 1 PM.
The documents you need to submit at RTO are:
- Online application fee receipt
- NOC (No Objection Certificate) from the financial company
- 2 signed copies of Form 35
- Confirmation letter from the financial company
- Original RC (Registration Certificate) of your car
- Original Car Insurance
- Original Pollution Certificate
On many websites, it is shown you need to provide attested copies of RC, Car Insurance, and Pollution Certificate. This is not true for RTOs in Kerala. You do not need attested copies (unless you need an address change in RC for which you need to submit an additional Form 33 and attested copies of ID proof showing the new address). In my case, I did not need an address change, hence the above-listed documents were enough. It is also advised to keep copies of your RC, Insurance, and Pollution Certificate in your car till you get the originals back.
In summary, after you obtain NOC and other documents:
- Call up the RTO where your car was registered
- Verify if the above documents are all you need for hypothecation cancellation
- Ask for working days and timings of hypothecation cancellation department (very important)
Step 4: Purchase Covers with Stamps
Next up, you need to purchase 2 covers with stamps:
- A big RC cover with a Rs. 40/- stamp
- A small envelope with a Rs. 10/- stamp on it
These covers with stamps on them are readily available in any stationery shop near RTO. So I would advise you to purchase them from a stationery shop nearby RTO rather than buy them individually from somewhere else.
In the RC cover, you need to write down your present address. The RTO will send the new RC (after hypothecation cancellation) along with the originals of the insurance and pollution certificate to you in this RC cover. Since I am temporarily based at a different address from the one shown in RC, I asked the RTO if I could write the new address instead of on the cover. They agreed provided I would be there personally to receive the RC.
On the small cover, write down your financial company’s address. The RTO will send a letter to this company informing them that the hypothecation cancellation process has been duly completed.
In summary, after creating a checklist:
- Purchase an RC (Registration Certificate) cover with Rs. 40/- stamp on it.
- Write down your present address on the RC cover with the correct pin code and contact number
- Purchase a small envelope with Rs. 10/- stamp on it
- Write down your financial company’s address on it with the correct pin code and contact number
Step 5: Arranging Documents
Clip together all required documents, including the RC cover & small envelope, with the fee receipt right in front. This allows the RTO to process your application quickly.
I had arranged the documents in a file as per an article I found online. I realized, at the RTO that this was not needed. They will not take the file but will require you to clip (staple) all the documents together.
Step 6: Visit RTO
The only thing left for you to do now is to visit the RTO and submit the documents. They will provide you with a tracking number. In case you want to check the progress of your application, you can call up the RTO and provide them with this tracking number.
My visit to Ottapalam RTO was a hassle-free one. The people were friendly and there were a lot of agents in there who (without expecting any monetary rewards) helped me out.
Once submitted, it will take around 10 days for you to receive the RC along with the originals of the pollution certificate and insurance. It might take longer if an address change is required.
In summary, after paying fees and organizing all documents:
- Visit RTO
- Submit documents
- Receive tracking number
- Wait for 10-15 days for RC and other originals
Dealing with Agents
If you come unprepared to an RTO (maybe just for an inquiry on hypothecation cancellation), there will be agents around who will try to lure you into using their services for a nominal fee (around Rs. 1000/-). They might tell you that the Akshaya center is crowded and you might have to wait for a long time to pay fees. Pay no heed! The Akshaya center I visited was not crowded at all. I was in and out of the center within 10 minutes.
A lot of people use the services of agents as well. All you have to do is submit your documents and they will take care of the rest. But I preferred to go about the hypothecation cancellation process myself. Using an agency’s service is more cost-effective and time-effective though if you have to make a long-distance trip to the RTO.
This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.
Questions & Answers
Question: If the submission of documents to the RTO where the vehicle is registered is compulsory, would it be possible to do the same at all the RTOs in Kerala?
Answer: Documents must be submitted to the RTO where the vehicle was registered. I called up the Thrissur RTO to ask the same in 2015 and asked them if it was possible to do this in Thrissur instead of the Ottapalam RTO and they said it's not. I am not sure if the rules have changed now, though.
Question: Was there ever a need to submit a handwritten letter?
Answer: No handwritten letters were submitted by me in 2015 when I went through the procedure, but I'm not sure if it's required now.
© 2015 Kalpana Iyer