1. Possession and security interest are separated
You normally keep and use the vehicle while the lender's security interest remains recorded until the loan is repaid.
Tip: You possess; the lender secures.
2. Registration records can show hypothecation
This can affect sale or ownership transfer before loan closure. A financed vehicle is not the same as an unencumbered vehicle.
Tip: Resolve the lender's interest before transfer.
3. Serious default can lead to enforcement
Repeated unpaid EMIs can eventually lead to recovery against the vehicle subject to contract, fair-practice obligations and law.
Note: One missed EMI is not instant repossession, but default is serious.
4. Repayment should end with formal removal
After closure, obtain lender documents and update the registration record so old hypothecation does not remain.
Tip: A paid loan should lead to clean records.
5. Quick check
After the final EMI, is everything automatically complete?
Answer: B - Formal security release and record update are still required.