Loan settlement with Bajaj Finance
A loan settlement is a mutually agreed compromise between the borrower and the lender, initiated at the borrower’s request due to financial hardship or specific circumstances. This revised arrangement replaces the original terms agreed upon at the time of loan approval or sanction, offering an alternative resolution to the outstanding debt. In the loan settlement, the borrower needs to raise a request with their lender to provide partial waivers on the outstanding loan.
This arrangement once approved by the lender is termed as loan settlement. The loan settlement offer would be given to the borrower only if the borrower is able to show genuine inability to repay the outstanding amount. Based on the borrower’s situation, the settlement offer will be approved and a decision on the waiver will be taken. To complete the process, the borrower needs to accept and fulfil the terms and conditions offered by the lender.
If there’s non-adherence, the borrower will be liable to pay the entire loan outstanding amount as per the agreed terms and conditions at the time of the sanctioned loan.
As per the guidelines, the details of the ‘settled’ loan account is essential to be reported to the credit bureau periodically. This might cause several negative implications on the borrower’s credit score such as:
- Drop in the CIBIL Score of the borrower.
- Long-term impact in the overall creditworthiness of the borrower.
- Difficulty for the borrowers to avail of any other loans in future.
Meaning of loan settlement
Loan settlement is a process where a borrower negotiates with the lender to pay a portion of the outstanding loan amount as a full and final settlement. This typically occurs when the borrower is unable to repay the full loan due to financial difficulties. Once accepted, the lender writes off the remaining balance, and the account is marked as ‘settled’ in the credit report. While it may offer immediate relief, a loan settlement can negatively impact the borrower’s credit score and future loan eligibility. It is generally considered a last resort when all other repayment options have been exhausted.
To initiate a loan settlement, the customer must get in touch with a representative from Bajaj Finance Limited. The borrower is required to submit relevant documents for the lender’s evaluation. Based on this assessment, the lender will take a discretionary decision regarding the settlement request. If the request is considered, a formal settlement letter will be issued to the customer.
The terms and conditions mentioned on the loan settlement agreement must be followed by the borrower. If there’s non-adherence, borrowers are liable to adhere to the original loan sanction terms and conditions.
What is Loan Settlement Process?
The loan settlement process involves the borrower negotiating with the lender to repay a reduced amount as full and final settlement of the outstanding loan. This typically occurs when the borrower is unable to repay the full amount due to financial hardship. The process begins with the borrower approaching the lender and proposing a lump-sum payment that is lower than the total outstanding. If the lender finds the offer reasonable, they may accept it as a practical solution to recover part of the dues. Once the agreed amount is paid, the lender usually marks the account as ‘settled’ with credit bureaus. While this provides some relief to the borrower, it can adversely affect their credit score.
Benefits of Loan Settlement
Loan settlement offers support to borrowers in financial distress by enabling them to negotiate a reduced repayment amount, usually paid as a lump sum. This arrangement can offer immediate relief, halting the accrual of interest and penalties while helping avoid legal complications and the stress of ongoing recovery efforts. For lenders, it allows partial recovery of dues that might otherwise be unrecoverable in the event of default. Although loan settlement can negatively affect a borrower’s credit score, it is often less harmful than ongoing defaults or bankruptcy, and it provides an opportunity for the borrower to gradually rebuild their credit profile.
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Impact of a loan settlement
Loan settlement can have a significant impact on the borrower’s CIBIL Score. While it provides relief from immediate financial strain, it may lead to a dip in the borrower’s credit score. The settlement status is typically reported on borrowers’ credit report, indicating that the debt wasn’t fully paid till all the dues are cleared.
Moreover, loan settlement can also impact the borrowers’ future creditworthiness and they might not get a loan in future from any leading financial lenders.
Therefore, borrowers are advised to understand the long-term impact on their credit score and future creditworthiness.
Alternatives to loan settlement
Before proceeding with a loan settlement, it’s critical to investigate other options for relieving financial stress without resorting to a settlement.
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Before the borrower choose to go ahead with a loan settlement, it’s critical to evaluate other options as well. Since loan settlement has a negative impact on creditworthiness, it is important to explore other options.
Channels to reach us
If a borrower has an ongoing loan with Bajaj Finance and there’s a need to settle the loan, borrowers can use either of these channels.
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Customer care number
Borrower can contact the Bajaj Finance customer service at +918698010101 for assistance with the settlement of the loan.
Borrower can call on this number to get assistance with the settlement of the Bajaj Finance loan. Once connected with a customer care representative, they’ll guide them through the loan settlement process and help with any queries. Borrowers should make sure to have their loan account number and other relevant details available so that the process can be explained with ease.
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Visit our branch
Visit our nearest branch and connect with our representative. Borrowers must keep their loan account details and other information handy when they visit our branch.
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Loan settlement might impact your creditworthiness for future loans. Click on the respective link at the top of this page.
Frequently asked questions
To avail of the loan settlement, the borrower must raise a request to the lender to provide partial waivers on the outstanding loan. This arrangement approved by the lender is termed as loan settlement.
If a borrower has an ongoing loan with Bajaj Finance and there’s a need to opt for loan settlement, borrowers can connect with our representative. Our representative will provide assistance on further steps. Borrowers will be asked to provide the necessary documents basis, which necessary decision will be made by the lender. Discretionary decision rights on settlement are reserved with the lender.
The terms and conditions mentioned in the settlement letter must be fulfilled by the borrower. In case of non-adherence, borrowers are liable to adhere to the original loan sanction terms and conditions.
The loan settlement process will have a huge impact on the borrower’s credit score as it indicates that the account has been settled with a waiver.
When the borrower settles a loan, the lender reports this to the credit bureaus resulting in lowering the credit score. It also impacts the borrower’s creditworthiness and the borrower may not get loans in future from any leading financial lenders.
Therefore, it’s advised to understand the long-term impact on the credit score and future creditworthiness.
After the borrower contacts the lender to discuss loan settlement options, the lender will evaluate the borrower’s financials before verification. The final outstanding amount is then decided.
A loan settlement letter is generated, and the borrower can then proceed with the payment. Only after the settlement payment is received, the no dues certificate is provided. The lender then updates the credit bureau that the loan has been settled.
If the borrower doesn’t pay the complete settlement amount within timeline mentioned in settlement letter (i.e., doesn’t fulfil the settlement terms and conditions) the case will be treated as void.
Once the loan settlement is completed, the no dues certificate (NDC) is provided. The NDC will have a mention of the account being settled.
