Loan settlement means the lender agrees to take less than the full amount you owe as full payment of the account. The account is usually shown as "settled", not "closed". A lender may agree when a borrower truly cannot repay in full. It is not automatic, and the lender decides.
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The lender decides. RBI's June 2023 rules let each bank and NBFC settle under its own board-approved policy. There is no fixed percentage. It depends on your dues, your situation and what you can pay.
Yes. Banks and NBFCs can agree to settlements under their own policies, within the RBI rules on compromise settlements issued in June 2023. But whether to settle is the lender's decision, not yours or ours.
OTS means one-time settlement. You and the lender agree on one amount, you pay it, and the lender accepts it as full payment of the account. Banks and NBFCs use the term for a lump-sum settlement of a loan or card account. The lender decides whether to offer one.
It depends on your situation. Settlement can stop dues growing and may reduce what you pay, but the account is usually shown as "settled" and not "closed", which lenders read as a negative, and the lender does not have to agree. If you can still pay in full or agree an EMI plan, that is usually better for your credit report. We explain both before you decide.
There is no fixed percentage. RBI's June 2023 rules ask every bank and NBFC to set how much of a dues amount it can reduce in its own board-approved policy, so the figure depends on the lender, your account and what you can pay. We do not quote or promise any percentage, and no one else can promise one for a lender.
You do not need a lawyer to ask your lender about a settlement. If you have received a court or arbitration notice, speak to a lawyer of your choice.
Usually, yes. A settled account is normally shown on your credit report (CIBIL) as "settled" and not "closed". This can lower your score and make it harder to get a new loan or card for some time. Settlement does not improve your CIBIL score. We explain this before you decide.
Before you pay, ask for the settlement terms in writing. After you finish paying, ask the lender for a closure letter or no-dues letter (a letter that says you owe nothing more).
Tell us a few details about your loans. We will look at them and explain the options that may suit you.