How to Settle Equitas Small Finance Bank Personal Loan?

How to Settle Equitas Small Finance Bank Personal Loan

Summary

Equitas Small Finance Bank Personal Loan is an unsecured loan intended to meet many personal financial requirements, such as medical expenses, education, weddings, or home renovation. It has no collateral; hence, people can access funds quickly.

The application process is easy and fast. Online applications are possible, and in case a customer walks into the bank’s branch, he is eligible to get the loan amount disbursed to him as soon as he satisfies the eligibility criteria. This depends on the income level, credit score, and repayment capacity of the borrower. 

However, timely repayment of the loan is essential to maintain stability in the financial and a good credit score. When the borrowers cannot repay it in time due to unexpected reasons, Equitas Small Finance Bank provides loan restructuring or settlement options.

Introduction

Taking a personal loan is one of the best financial decisions when you need urgent money for handling sudden costs, medical emergencies, or other essential requirements. However, sometimes you fail to repay it due to unexpected financial pressure. If you are unable to repay your Equitas Small Finance Bank personal loan, then you must know about the loan settlement procedure.

Equitas Small Finance Bank stands out as customer-friendly and extends accessible financial products to customers in the market. Like all banking institutions, when a customer reaches a situation and cannot pay any more for outstanding loans, they apply for loan settlements. Loan settlements are where some amount lesser than the total lent is paid as per agreement between parties to settle accounts.

The first step towards the settlement of your loan at Equitas Small Finance Bank is to convey your financial condition to the bank. You need to be frank with the bank that you cannot repay the installments regularly. Based on your case, the bank’s loan recovery team will analyze whether you can settle the loan or not.

We guide you through the step-by-step detailed process of settlement of your Equitas Small Finance Bank personal loan and discuss the benefits and drawbacks of the loan settlement, along with tips to ensure effective management of this process.

What is an Equitas Small Finance Bank Personal Loan?

Equitas Small Finance Bank offers personal loans as one of the loan schemes that are provided to support the needs of a person in their financial lives. This loan can be described as an unsecured loan, wherein you do not have to extend any collateral or security to get the loan. This is a versatile loan, and there are many uses for it from medical costs to paying for wedding ceremonies, renovating your home, educational expenses, or supporting any other type of personal expenditure.

The bank offers personal loans with the most competitive interest rates to make them cheaper for borrowers. The loan amount one can borrow depends on one’s income, credit score, and repayment ability. Repayment is done through monthly EMIs, which range from a few months to several years depending on the tenure.

What is Equitas Small Finance Bank Personal Loan Settlement?

Equitas Small Finance Bank Personal Loan Settlement is a financial procedure in which a borrower settles his or her outstanding loan amount by paying one-time lump sums to the bank or lender. Generally, the paid amount is smaller than the balance of the entire loan amount. The lender agrees to accept this amount as completing the loan repayment.

This is typically accepted when the borrower is not financially strong enough to continue with monthly EMIs. By settling this loan, the borrower can close the loan account and avoid further interest and penalties and the possibility of becoming a defaulter.

However, animal Finance Personal Loan settlement can impact the borrower’s credit score because it is often reported as a partial payment to credit agencies. Nonetheless, it may be an efficient solution for debtors who need immediate financial relief.

Why is there a need for Equitas Small Finance Bank Personal Loan Settlement?

A personal loan is required when the borrower is facing financial difficulties and cannot repay the loan on time. Life is unpredictable, and unexpected situations like job loss, medical emergencies, or a sudden drop in income can make it hard to keep up with regular monthly installments (EMIs).

This way, paying off the loan continues to add to the interest and penalties, which increases the pressure on one’s finances. Additionally, a loan may place an individual at risk of default, negatively affecting the borrower’s credit score.

An Affordable Personal Loan Settlement provides a way out because the borrower can pay off the loan in one shot. It avoids further financial pressure on the account holder, ceases additional charges, and shuts down the loan account. It’s a source of recovery for the banks since it does not result in a total loss if the account holder defaults.

What documents are required for Equitas Small Finance Bank Personal Loan Settlement?

Documents Needed to Close Equitas Small Finance Bank Personal Loan Settlement

  • Your loan account number; or any document that identifies the loan, such as the loan agreement or account statement.
  • Valid ID: Aadhaar Card, PAN Card, Passport, or Voter ID.
  • Identities of the address where one is currently living: Utility bills, the Aadhaar Card, or rental agreement.
  • The lender may request that you submit documents such as salary slips, bank statements, or income tax returns to explain your financial situation.
  • Write a formal letter to the lender stating why you want to settle the loan and the amount you wish to negotiate.
  • After negotiation, make sure to get the settlement terms in writing. This agreement should reflect the settled amount, and payment terms, and even ensure that the loan will be closed after payment.
  • Record a receipt or bank transfer confirmation of making the lump sum payment as part of your settlement.
  • After finalizing the settlement process, request an NOC from your lender. A No Objection Certificate is a report that proves your loan is fully settled and has no pending due.

What is the process of an Equitas Small Finance Bank Personal Loan Settlement?

This works in simple words as follows:

  • If you find it difficult to repay your loan, the first thing you should do is call your bank or lender. Honestly explain your situation and ask them to settle the loan.
  • The lender will review your case, and then they may settle an amount less than the total loan amount outstanding against you. This can be negotiated so that the amount becomes manageable for you.
  • Once you and the lender agree on the settlement amount and terms, make sure to get everything in writing. This ensures there is no confusion or disputes later.
  • Pay the agreed lump sum amount on the deadline given by the lender. Use a method that provides proof of payment, like a bank transfer or demand draft.
  • After the payment, request the lender to issue a No Objection Certificate (NOC). A NOC is a document that says your loan has been fully paid and there is no pending amount.
  • A settlement of Equitas Small Finance Bank Personal Loan Settlements may influence your credit report. Check your credit report after the settlement. Ensure that it’s updated correctly and marked as closed.

What are the measures to improve the score after the Equitas Small Finance Bank Personal Loan Settlement?

Measures for Enhancing the CIBIL Score After Equitas Small Finance Bank Personal Loan Settlement:

  • Pay all of your bills. This includes, but is not limited to, credit cards, utility services, and loan EMIs. Paying on time shows that you can manage your funds responsibly, improving your credit score.
  • Keep your credit card balance below 30% of its limit. This shows that you are using credit appropriately and helps enhance your CIBIL score.
  • Pay off small existing dues, if any. The fewer the pending dues, the better it will be for your credit score.
  • After loan settlement, you must not skip paying EMI on other loans. Non-payment affects the CIBIL score negatively.
  • Secured and unsecured loans, combined and in a healthy position, add good value to the credit score. Having home loans in one column and personal loans and credit cards in the other column can only add up in the end.
  • Keep an eye on your CIBIL report to ensure that it is updated properly. If you find any errors or incorrect information on your report, dispute it with the credit bureau concerned for correction.
  • Applying for too many loans or credit cards within a short period can cause the score to decrease. Hence, apply for credit only when necessary.
  • Request a higher credit card limit if possible. This will automatically bring down the credit utilization ratio, which would positively impact the score.
  • Always use credit responsibly. Avoid overspending and pay the full balance whenever you have an opportunity. This will gradually enhance your CIBIL score.

What are the tips related to Equitas Small Finance Bank Personal Loan Settlement?

Tips for Equitas Small Finance Bank Personal Loan Settlement

  • Before settling on an Equitas Small Finance Bank Personal Loan Settlement, you should have a clear view of your financial situation and be certain that you can afford the one-time lump sum payment without adding more financial stress.
  • Do not accept the lender’s first offer. Try to negotiate the settlement amount to get the best possible deal.
  • Always ensure that the settlement terms are in writing. This comprises the agreed-upon amount, a specified payment date, and confirmation that once payment is made, the loan will be marked as settled.
  • Please pay the agreed lump sum in full and on time. Delayed or partial payment may complicate the settlement process and increase your financial situation.
  • After repaying, apply to the lender for a No Objection Certificate (NOC). An NOC is considered proof that the customer has fully repaid his loan and has no outstanding dues or liabilities.
  • Maintain a look at your credit report after settling. Ensure the report is fairly made and reporting error-free. In case of errors, raise disputes to the concerned credit bureau.
  • Keep in mind that loan settlement would lower your CIBIL score. Even though clearing off the dues through settlement makes way for other debt clearances, it creates obstacles in accessing further loans in the future.

Which loans come under Equitas Small Finance Bank Personal Loan Settlement?

Loans that come under the Equitas Small Finance Bank Personal Loan Settlement

Medical LoanFor paying any kind of unexpected medical bill or treatment.
Wedding LoanTo help pay for the expenses of the wedding.
Travel LoanTo pay for holidays or any travel expenses.
Home Renovation LoanFor home renovation or upgradation.
Education LoanFor paying education or professional courses.
Festival LoanFor the expenses of any festival and their other expenses.
Debt Consolidation LoanFor consolidation of various debts in one loan.

What are the things to remember during the Equitas Small Finance Bank Personal Loan Settlement?

Things to Remember when Settling Equitas Small Finance Bank Personal Loan Settlement

  • Know the amount you should pay to settle the loan and make sure you are comfortable with the agreed-upon terms, including the payment date.
  • It should always be in writing, and it should include any terms such as a total settlement amount, payment date, or how your loan will be settled.
  • Ask the lender whether there are other charges and penalties involved in the settlement. You should know all the hidden costs before proceeding with this process.
  • Check if you have adequate money to make the lump sum payment. Equitas Small Finance Bank Personal Loan Settlement demands an upfront payment of the agreed sum, so ensure that you’re well-prepared financially.
  • Once paid, the loan amount should be requested for an NOC from the lender. This document proves to your lender that all your outstanding loans have been completely settled and that there is no remaining DUES balance.
  • For loans marked as a ‘spot’ settlement, the score will surely decrease because ‘settled’ and not ‘closed’ must appear on the credit report when applying for a loan with different lenders at future dates.
  • Please pay the settlement amount within the stipulated time. If you are late, the lender may charge you extra fees or even reject the settlement.
  • Maintain a copy of all the documents and receipts regarding the settlement payment, including confirmation receipts. These may come in handy during future disputes.
  • Do not borrow again immediately. Improve your credit score before doing so.
  • If the process or the terms are still unclear, consider consulting a financial advisor. Financial advisors can guide you through the settlement procedure and provide the best advice concerning your financial status.

What are the advantages of Equitas Small Finance Bank Personal Loan Settlement?

Advantages of Equitas Small Finance Bank Personal Loan Settlement:

  • Equitas Small Finance Bank Personal Loan Settlement helps you repay the loan quickly through a one-time payment, relieving the stress of monthly EMIs.
  • It saves you from being declared a defaulter, which can damage your financial reputation and lead to legal complications.
  • The settlement amount is usually less than the total outstanding loan amount, so it is cheap if you are financially weak.
  • Once you settle the loan, you are never worried about accumulating extra interest, late fees, or penalties.
  • It is quite easy and can quickly close the loan account with just proper documentation.
  • Once you pay off the loan, you can improve your financial status without the burden of any unpaid debts.

What are the disadvantages of an Equitas Small Finance Bank Personal Loan Settlement?

Disadvantages of Equitas Small Finance Bank Personal Loan Settlement

  • When you settle a loan, it is reported as a “settled” account instead of “closed” to credit bureaus. This reduces your CIBIL score and makes it harder to get loans in the future.
  • Lenders may view a loan settlement as a sign of financial instability and may hesitate to approve loans or credit cards for you later.
  • Some banks may require a penalty or fees for the settlement processing. Therefore, you have to pay more upfront.
  • Although the settlement lowers your overall debt, it does not eliminate the full amount. This might lead to an adverse mark on your financial record.
  • Settlement of a loan can affect your reputation with the lender, hence lowering the possibility of them granting future financial requests.
  • If you had recompensed the loan completely, it would indicate a good history of repayment and you won’t be able to enhance your creditworthiness through this settlement.
  • Settling the amount may take time and may not be easy.

Conclusion

Equitas Small Finance Bank Personal Loans offer ease to individuals so they can raise money from this loan to meet their personal and emergency expenses conveniently. It is completely a flexible product, enabling customers to raise money without pledging collateral.

For borrowers who experience undue hardship in repaying their loans because of some unforeseen financial difficulty, the bank also avails loan restructuring or settlement options. Loan settlement though not the best is necessary for those who cannot pay all the outstanding amount.

Maintaining financial stability requires sound management of loans. Therefore, before availing of a personal loan, the borrower should evaluate his repayment ability and borrow only what he needs. Proper planning, timely payment, and clear communication with the bank will help you avoid financial stress and thus enjoy a smooth ride to repayment.

Frequently Asked Questions (FAQ’s) 

Que: Is there any other charge or interest rate?

Ans: Yes, Equitas Small Finance Bank charges a small amount of processing fee, and the interest rate charged varies from loan amount to repayment period; details on this shall be given at the time of loan approval.

Que: Can I repay the loan amount before the due date?

Ans: Yes, Equitas Small Finance Bank permits early loan repayment. Repaying early helps save on the interest charges paid.

Que: What if I default on loan repayment?

Ans: If you don’t repay the loan on time, Equitas Small Finance Bank may charge you a late payment fee. Moreover, it will reflect on your credit score, which might harm your chances of availing loans later on.

Que: What kind of documents are needed for the loan application?

Ans: Valid ID proof like an Aadhaar or PAN card proof of college enrollment of the student or proof of employment by a professional, and a bank account where the loan can be disbursed.

Que: How long does it take for me to get the amount sanctioned for my loan?

Ans: Once your application is approved, the loan amount is credited to your bank account in a matter of a few hours.

Leave a Comment

Your email address will not be published. Required fields are marked *

Schedule Appointment

Fill out the form below, and we will be in touch shortly.
Contact Information
Preferred Date and Time Selection