Fully Paid Your Car Loan? Here’s How to Cancel Your Chattel Mortgage in the Philippines (2026 Guide)

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Finishing a 3- or 5-year car loan is a major win. However, many owners forget that the bank still technically has a "lien" on the vehicle until the Chattel Mortgage is officially cancelled. Without a "Clean" CR, you cannot sell the car or transfer ownership.

The Step-by-Step Process:

  1. Claim your Documents from the Bank: Once your final payment is cleared, contact your bank’s loan department. They will provide a "Release of Chattel Mortgage" (or Deed of Release), the original CR, and the original Official Receipt (OR).

  2. Visit the Registry of Deeds (RD): Go to the RD branch where the mortgage was originally registered (this is usually indicated on your CR). You will need to pay a cancellation fee. They will stamp or provide an annotation that the mortgage is now cancelled.

  3. LTO Annotation Removal: Take your annotated documents from the RD to the LTO District Office where your car is registered. You will need:

    • Original CR and OR

    • Release of Chattel Mortgage 

    • Valid ID

    • Note that the LTO will require a physical stencil of your engine and chassis number.

  4. Receive your Clean CR: After paying the LTO fees (approx. ₱500 - ₱800), they will issue a new Certificate of Registration without the "Encumbered" remark.

Conclusion: Don't delay this process! It’s much harder to track down documents years later if you decide to sell your car in a hurry.


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