Below are some of the most common questions regarding the mortgage of a car: in the event of an accident or total damage to your car, the right to insurance is paid to the owner of the vehicle. If the car is still mortgaged, the claim will be in favor of the bank or lender. Yes, it is important to stop or remove the mortgage from a car if the loan has been paid in full to the lender. Once you have repaid the loan amount, be sure to get the NOC from the bank and declare that there is a zero or no balance on your loan. However, the NOC is not the end of the procedure. You need to stop it with the respective RTO. Submit the necessary documents to the RTO and the transportation department will remove them and transfer the full title to the car owner. This ensures that you are the full owner of the car. You can either immediately pay the full value of the vehicle, or you can benefit from a bank loan. As the bank pays part of the value of the vehicle, the car is a guarantee for the bank.
In other words, the car becomes a guarantee or guarantee until the full amount of the loan is repaid. Until the loan is fully repaid, ownership of the car remains in the bank. If you mortgage the car to get a loan, the practice is called a „mortgage.“ But how does car insurance work if the title of the vehicle is still in the bank until the loan is fully paid? Read on to learn more about mortgages in auto insurance. You can remove the mortgage from your car title once you have paid the bank loan in full. This is an administrative process involving the bank and the RTO concerned.