How to settle loan: A loan settlement is also called a one-time settlement. This work is done when the loan taker is unable to repay it due to some reasons. In this situation, he requests the bank manager to find a middle way and get the loan settled. Many people choose this path, but most of them are not aware of the disadvantages (loan Settlement ke nuksan) caused by it. By settling the loan, one cannot get a loan again from any bank for 7 years. Let us know why this is so and what should be done in this situation.

This is a loan settlement -

Whenever there is a problem in paying the loan EMI (loan emi rules) or the customer sees the inability to repay the loan, then he meets the bank officials and finds a middle way. Like talking about reducing interest rates or discounts in EMI etc. (loan Settlement benefits).

After this, the decision taken in the interest of the customer is called loan settlement. At the time of loan settlement, the defaulter has to pay the entire outstanding loan amount, interest, penalty or charge, etc. can be waived to some extent or completely. More difficulty in paying EMI arises in home loans because it is a long-term loans of large amounts and their EMI is also high.

Why do banks write 'Settled'-

In a way, the bank suffers a loss due to loan settlement. Because the bank (bank news) does not get the full profit that it was supposed to get from the loan borrower during the entire loan period. For this reason, banks write 'Settled' in the credit history of the borrower. After this is written, the inability of the loan taker to repay it comes to the fore. Therefore, the CIBIL score becomes bad. Settling more than one credit account further worsens the credit score.

The customer has to follow the bank's terms and conditions-

Let us tell you that by doing loan settlement (loan settlement ke niyam) the loan does not get closed, it only gets the creditor rid of the recovery agents. After this settlement, the loan taker can get some relief from the dues and clear them by following the terms and conditions of the agreement made with the bank. After this settlement, the borrower also suffers a loss in the form of a bad CIBIL score (cibil score news).

Credit score goes down-

After settlement, you may feel relieved but it causes the credit score to go down. Due to this, 'Settled' is written in the credit history and this one word takes away your CIBIL. Due to this, the credit score can go down by 100 points or even more. The most important thing to note is that the word settled can remain written in the account status section of the customer's credit report for 7 years.

This shows that the customer could not repay the loan as per the loan repayment rules and interest rates and his loan had to be settled. In this situation, it becomes very difficult for the customer to take a loan again for the next 7 years. Not only this, settling the loan can also put a blacklist on you.

Close the loan as soon as you get the opportunity-

As soon as you get the opportunity at the right time, i.e. as soon as the money is arranged, the settled loan (loan news) must be closed. After this, the bank gives NOC on repaying the loan, do not forget to take that too. Your CIBIL score will be updated only after taking NOC i.e. Certificate of No Due Payment (Bank NOC). If you forget this, then the CIBIL score may remain bad.

If you are financially capable, you can go to the bank and say that you want to pay the discount you got on principal, interest, penalty and other charges on your due payment i.e. settlement. After repaying the loan and taking no due payment, the concerned bank informs the credit bureau that your account has been closed. After this, your credit score (credit score kaise sudhare) gets updated and improves.