Procedure after Car Loan closure to complete ownership of your vehicle is as important as paying off your Car Loan. Certain important tasks are required to be completed to ensure a smooth transition. 'After Car Loan closure, what next?' is a vital question that must be addressed. Repayment of the loan marks only one stage of the process, not its conclusion.
In this guide, we will walk you through the procedure after Car Loan closure, highlighting the key steps that you must follow.
Get your loan account statement
Obtaining a loan account statement is crucial after Car Loan closure as it provides a detailed record of all the transactions made throughout the loan tenure. This statement serves as proof of your repayment and can be used for future reference or documentation purposes. It includes information such as the principal amount, interest paid, EMIs made, and any other charges or fees associated with the loan. To obtain your loan account statement, you need to approach your bank and request it.
Axis Bank provides readily available loan statements whenever requested. Axis Bank New Car Loans come with attractive interest rates and flexible tenures extending up to 7 years. You can opt for loan amounts as low as ₹1 lakh or up to 100% on-road financing for your car.
Obtain loan closure certificate / NOC
A loan closure certificate or No Objection Certificate (NOC) is an official document that certifies the complete repayment of your Car Loan. To obtain a loan closure certificate / NOC, you need to contact your lender and request it. Most lenders have a specific department or helpline dedicated to handling such requests. You can reach out to them via phone, email or by visiting their branch office in person.
Get the hypothecation removed from RC
Hypothecation is a legal term that refers to the lender's right over an asset, in this case, your car, until the loan is fully repaid. Removing hypothecation is a crucial step. To initiate the process of removing hypothecation from your car's RC after loan closure, you need to follow these steps:
1. After receiving the loan closure certificate / NOC from your lender and submit a copy of it to the Regional Transport Office (RTO), along with necessary documents like ID proof, address proof, and other required forms like Form 35.
2. The RTO will process your application and verify the submitted documents. Once approved, they will issue an updated RC without the hypothecation clause.
Get your car insurance updated
Updating your car insurance after loan closure is essential as it ensures that the policy reflects the change in ownership. To update your car insurance after loan closure, follow these steps:
1. Once you receive the loan closure certificate / NOC from your lender, submit a copy of it to your insurance company.
2. The insurance company will revise and update your policy document with the updated ownership information.
3. You need to submit this revised insurance policy document, along with the other necessary documents mentioned above, to the Regional Transport Office (RTO) for removal of hypothecation.
Ensure loan closure is updated in the credit report
Updating the closure of your Car Loan in credit bureaus is crucial to avoid any negative impact on your future loan eligibility. To ensure that your loan closure status is properly reflected in credit bureaus, follow these steps:
1. Contact your lender: After fully repaying your Car Loan, get in touch with your lender and request them to update the information in credit bureaus.
2. Provide necessary documents: Ensure that you provide any supporting documentation or proof of the closed loan status as requested by the lender.
3. Follow up: Regularly check your credit report from different credit bureaus to ensure that the closure of your Car Loan is accurately reflected.
Also Read: Top 10 financial advice on buying a car
In conclusion, completing the repayment of the car loan does not signify the end of your responsibilities; rather, it is essential to undertake the above-mentioned steps beyond loan repayment to secure complete ownership of your car.
Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.
