Whenever you clear your loan amount then you have to take NOC (No Objection Certificate) from the bank in which you got the loan. By using this NOC you can apply for hypothecation removal of your vehicle at your RTO office.
Until you don’t cancel the hypothecation, then you can’t sell that vehicle to others, because your financier will still act as the real owner.
In order to cancel the hypothecation of your Two wheelers / Four-wheeler, you need to write a request letter to the bank. Here are the sample letter formats to cancel the hypothecation.
Bank Hypothecation cancellation Request Letter (Format 1)
To
The Branch Manager,
Bank Name,
Bank address.
Sub: Request for NOC to cancel hypothecation.
Respected Sir/Madam,
I, Ch Rahguram, have taken a loan from your bank for the purchase of a Four wheeler with registration number AP31XX1234. I have repaid all the loan amount W.E.F May 2021.
I would like to cancel the hypothecation of my vehicle, for that, I need your NOC. So kindly issue the NOC.
I shall be thankful to you in this regard.
Thanking you.
Sincerely,
Your name.
Bank Hypothecation cancellation Request Letter (Format 1)
To
The Branch Manager,
Bank Name,
Bank Address.
Sub: Request to issue NOC.
Dear Sir/Madam,
My name is P Suresh Kumar, I have taken a loan from your bank for purchasing a Two-wheeler/Four wheeler(Reg no: AP31CCXX4567). The loan amount has been repaid W.E.F April 2021.
Hence I have cleared the loan amount. I would like to apply for the removal of the hypothecation of the bank on my vehicle RC card. For that, I need to submit your NOC to the registering authority. So kindly issue the NOC for my loan.
I shall be grateful to you in this regard.
Thanking you.
Sincerely,
Your name.
How to cancel the hypothecation of my vehicle?
To cancel the hypothecation of your vehicle you need to submit NOC of the bank, form 35 (termination of hire purchase, lease, or hypothecation), and vehicle RC copy to your respective RTO office.
How many days will it take to cancel the hypothecation ?
It will take a maximum of 30 days. After the cancellation of the hypothecation, you will receive a new RC card.
When will banks issue NOC?
Once you clear your loan amount, then you will get a message to your mobile number from the bank to apply for the NOC. In most cases, banks will issue the NOC on the same day of application.