If you can’t repay your loan, contact your bank to discuss a settlement. The bank may agree to accept a lesser amount to clear your debt, and once you pay it, the loan is settled.
The main benefit of loan settlement is reducing your debt burden. It can provide relief from ongoing financial stress and allow you to regain control of your finances with a smaller amount due.
The downside of loan settlement is that it can hurt your credit score, making it harder to secure loans in the future. You might also face higher interest rates on any future borrowing.