After paying off your car loan, taking several steps to ensure you have full ownership rights over your vehicle is essential. Below are the key actions to take after settling your car loan:
Loan Details: Obtain a loan statement from the bank showing all the payments and fees made during the loan period. This document can be obtained online or by visiting the bank branch.
Loan Closure Certificate: Upon settling your car loan, the bank will issue a certificate of significant importance. This certificate confirms that the outstanding amount has been fully paid, providing you with a sense of security and preventing potential issues in the future.
Hypothecation: After settling your car loan, updating the ‘Registration Certificate’ (RC) from the bank’s name to your own is crucial. This process, which requires the loan closure certificate, form 35, and other relevant documents, must be completed at the Regional Transport Office (RTO).
Inform the Insurance Company: It’s crucial to notify your auto insurance company that the car loan has been paid off. This step is often overlooked but is essential to ensure a smooth claims process in the future.
Check Your Credit Report: Verify your credit report to ensure the car loan is marked as ‘Closed.’ This will increase your credit score.