Know in which circumstances it is right to do a Personal Loan Settlement and when it can prove to be harmful for you!
A personal loan Settlement means that the bank or the loan-giving institution gives you the option to repay the loan by paying a small amount at once, due to which your loan account is closed. But this can affect your CIBIL score.
- When there is no other possibility of repaying the loan. - When the source of income suddenly stops. - When the bank itself gives you the option of settlement. - When you want to avoid facing legal action.
- When there are other options to pay the EMI. - When it is important to maintain your CIBIL score. - When you want to take a loan from the bank again in the future. - When you can make a partial payment or restructure your loan.
- A huge drop in your CIBIL score. - Difficulty in getting a loan in the future. - The bank may consider you a ‘defaulter. ’ - Additional interest and charges may be levied.
- Ask the bank for loan restructuring. - Increase the tenure to reduce the EMI. - Try to repay the loan from another source of income.