In Malaysia, car loan tenures can take up to 5, 7, or even 9 years. The bank’s valuation of the car is important since it serves as a collateral in case of loan default. Used cars can be purchased on a loan too, provided they’re not valued too low.
Visit RTO for collecting the new RC Smart Card (sans hypothecation), on the given date.Īfter all these procedures, you will get rightful ownership of the car you had taken on car loan, with the bank ownership cancelled over the vehicle.Purchasing a brand-new car is usually done with car loans or financing services. Collect receipt of the same, and you can take the Smart Card RC within a few days (date will be specified). To collect the Smart Card RC you need to pay a fee. The changes (if any) will be reflected in the specific form. In case any corrections are required in the details, you must get it done. Step 4: Process to Receive the RC Smart Card Now collect the ‘Acceptance Form’ that contains details mentioned on the RC. Step 3: Submit the Hypothecation Removal Application Submit the duly filled Hypothecation Removal Application and attach the required set of documents to it Original Form 35, and copies of it signed by the registered owner and the bank, original Bank NOC, copy of your PAN Card, copy of valid car insurance, original RC (Registration Certificate), copy of your address proof, copy of valid Pollution Under Control (PUC) CertificateĪpart from a visit to the regional transport office, you will have to go to the insurance company, and submit a copy of No Dues Certificate, which you received from the bank. Step 2: Documents to be taken to the RTO You need to collect the following documents and then visit the RTO: Hypothecation removal process can be explained in the following 4 steps:- Step 1: Receive Documents from the Lender/Bank No Objection Certificate: It is the agreement by bank, which states that the lender has no objection over removal of hypothecationįorm 35: Two copies of Form 35 are usually given, and it mentions the termination of hypothecation between you and the bank. 
Once the loan amount is completely repaid, hypothecation removal is required to transfer the ownership of the car to the customer as there is no outstanding amount against the car. The car is in the physical possession of the customer but the bank is the actual owner of the car until the customer pays off the entire loan amount. This will be useful while updating the credit history in case of any discrepancies in your credit score and report.ĭ) Hypothecation essentially means that the car for which you have taken a loan for is kept as collateral with the bank until you pay off the loan. The set of documents includes a No Dues Certificate (NDC) or No Objection Certificate (NOC) from the bank along with other documents submitted at the time of the car loan application.Ĭ) Do collect the entire repayment statement of your car loan from the bank which you can receive after submitting an application in the bank.
After completing the repayment of your car loan, there are five important things that you need to do as explained below:Ī) If you made the last EMI on your car loan or did a prepayment to close the car loan, then get the final payment receipt from your bank.ī) Within 2-3 weeks’ time of repaying the car loan, you should receive all your documents from the bank via post at your registered address. But, there are still some unfinished tasks left for the borrower. A number of borrowers assume their job is done after paying off the last equated monthly installment (EMI) on their car loan.
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