Costs, repayment & closure
Bike Loan Hypothecation & NOC
What hypothecation on your RC means, and how to remove it with NOC and Form 35 after closing the loan.
Updated 27 September 2026 · 8 lenders trackedLowest two-wheeler loan rate
8.90%
Indian Bank Two-Wheeler LoanWhat you need to know
When you buy a two-wheeler on loan, it is hypothecated to the lender: you own and ride it, but the lender’s interest is recorded on the registration certificate (RC). After you repay, you must get the hypothecation removed — otherwise you cannot easily sell or transfer the vehicle.
Removing hypothecation
- Repay the loan in fullGet the closure letter.
- Collect NOC and Form 35Two copies of Form 35 signed by the lender, plus the NOC.
- Apply to the RTO or on VahanUse the “hypothecation termination” service on the Parivahan/Vahan portal, upload documents and pay the fee; or apply at your RTO.
- Get the updated RCThe new RC (or e-RC) no longer shows the lender.
- Update insuranceAsk the insurer to remove the lender’s name from the policy.
Documents for termination
- NOC from the lender
- Form 35 (signed by you and the lender)
- Original RC or RC details for e-RC
- Valid insurance and PUC certificate
- ID/address proof as required by the RTO
Your rights
- RBI requires lenders to release original documents within 30 days of full repayment, or pay ₹5,000 per day of delay
- The NOC usually has a validity period — submit it to the RTO promptly
Frequently asked questions
Can I sell a bike with hypothecation on the RC?
Only after closing the loan and removing hypothecation, or with the lender’s consent — otherwise the buyer cannot get the RC transferred.
What if I lose the NOC?
Ask the lender for a duplicate NOC; some charge a small fee.
For information and comparison only. Loan terms, rates and rules change — confirm with the lender and read the Key Facts Statement before borrowing.