Used Car Loan Documents Checklist: RC Transfer & Insurance Requirements

The RC and car insurance are essential parts of a Used Car Loan document checklist, proving that you legally own the car and you meet the norms set by the Regional Transport Office (RTO). Skipping these details can delay your loan approval or even lead to penalties. This blog provides a checklist of the two documents and their requirements for used-car loans.

RC Transfer in Used Car Loans

The Registration Certificate (RC) transfer shifts legal title from the seller to the buyer through the Regional Transport Office (RTO) or the Parivahan portal. It confirms a clear title, helping to avoid disputes. Lenders mandate the RC for used car loans, for which the RC transfer from the seller to you is essential.

Essential Documents for RC Transfer

RTOs nationwide require a few set documents for a seamless RC transfer:

• Original Registration Certificate (RC): Seller’s RC book, verifying vehicle details like chassis and engine number.
• Form 29: The Notice of Transfer of Ownership, signed by you and the seller.
• Form 30: Application for Transfer of Ownership, duly signed.
• Form 35: A signed Form 35 (Notice of Termination) for hypothecation removal if the seller had a loan.
• Valid Insurance Certificate: Proof of active policy in the seller’s name.
• PUC Certificate: Current and valid Pollution Under Control certificate.
• Address and ID Proofs: Aadhaar, PAN, or passport, and chassis/engine pencil print if demanded.
• No Objection Certificate (NOC): NOC from the original RTO for interstate transfers.

Also Read: Hidden Costs of Buying a Used Car: Insurance NCB, RTO Transfer, and Repairs        

Car Insurance Requirements for Used Car Loans and RC Transfer

Having a valid car insurance policy is a must for used car loans and RC transfers. This policy protects you against third-party liabilities as outlined in the Motor Vehicles Act of 1988. Lenders require it to reduce their risks, and without it, the RTO won’t approve the RC transfer.

The insurance and its No Claim Benefit will belong to the previous owner. If you had a No Claim Benefit on your previous car, you can transfer it over to your new pre-owned car.

Used Car Loan Documents Checklist for Insurance

• Valid Policy Copy: The seller should provide the original, and the insurance must be active.
• Interstate Note: Valid across India, but must be updated if you’re relocating.

Note: Most lenders prefer comprehensive coverage, which includes own damage and third-party protection, especially if you’re aiming for a higher loan amount.

Also Read: Documents Required for a Used Car Loan: Complete Checklist

To Conclude

Understanding the RC transfer and insurance requirements will make it much easier to get your Pre-owned Car Loan approved. It’s all about ensuring that you have legal ownership and financial peace of mind, particularly if you’re looking to upgrade your family vehicle or find a budget-friendly option.

Contact Poonawalla Fincorp for attractive interest rates and repayment schedules on a Pre-owned Car Loan.

FAQs

What is a Used Car Loan documents checklist to keep in mind?

For a Used Car Loan, you need your basic KYC documents, income and employment proof, bank statements, and vehicle-related documents such as the RC and insurance.

What if the used car has an existing loan during RC transfer?

If your pre-owned car has an existing loan, you need to obtain an NOC from the financier in the form of Form 35 (Notice of Termination). This removes the hypothecation. The RC should also reflect the cleared hypothecation.

How long does RC transfer take for used car loan processing?

The RC transfer usually takes about 7 to 15 days online and 30 days offline. Ideally, submit Form 30 within 14 days (for same-state transfers) or 45 days (for interstate transfers) after the seller files Form 29 to avoid penalties.

Do all states have identical RC transfer document rules?

While core documents like RC, Forms 29/30, and insurance are uniform, fees and extras vary according to your local and state laws.