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In October, I paid the final EMI (Equated Monthly Installment) on my car loan from ICICI Bank. Back then, I wasn’t sure about the steps to be followed next. Now that I have figured out what exactly needs to be done once you’ve paid off your car loan, I thought I’d document it here.
- Ensure that you have received all the canceled post-dated checks that you had issued to the bank/finance company when you took the loan. I received these on time — through courier — from ICICI Bank.
- Ensure that you have received the No Objection Certificates (NOCs), one addressed to the Regional Transport Office (RTO) where your vehicle has been registered and one addressed to your insurance company. I didn’t receive these certificates from ICICI Bank until I reminded them to do so (over the phone). The NOCs are normally valid for a period of 90 days from the date of issue.
- Take a photocopy of all the above documents — just to be safe — and keep them locked at home. I forgot, but luckily things progressed without a hitch.
- Ensure that you have the original and a photocopy of the following vehicle documents ready: Certificate of Registration (popularly called “The RC Book”), insurance certificate, lifetime tax paid receipt, and emission certificate (last two are optional, but you can never guess what’s required at the RTO).
You need to first get the hypothecation/lien registered in the RC Book canceled at the Regional Transport Office (RTO) where your vehicle has been registered. I’d advise you to get this done through a reputed driving school since they do all the cumbersome legwork and form filling for a fee. The driving school will need the NOC (addressed to the RTO), original RC book, and a copy of the insurance certificate, lifetime tax paid receipt, and emission certificate.
Call it outsourcing, if you must, but you’ll get the updated RC book — with the hypothecation canceled — within a day or two.
- Now that you have the hypothecation canceled in the RC book, it’s time to hit the insurance office. Do remember to take the NOC (addressed to the insurance company), a photocopy of the updated RC book, a photocopy of the insurance certificate, and the originals (in case they need to verify). The insurance company will update their records and issue a letter stating that the hypothecation has been canceled. Staple this letter to the original insurance certificate.
That’s it! It shouldn’t take you more than four to five days to complete these procedures. Good luck and feel free to pass this information around.
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