What is a loan settlement

Know more about loan settlement and when you can opt for this option.

What is loan settlement

Loan settlement is a compromised arrangement made between the borrower and the lender. It supersedes the original agreement signed at the time of loan approval/ sanction. For loan settlement, the borrower must raise a request to the lender to provide partial waivers on the outstanding amount. This arrangement once approved by the lender is termed as settlement.

For loan settlement, the customer is required to connect with a Bajaj Finance Limited representative. The borrower will need to furnish the necessary documents on which the lender has the right to do an assessment basis, which the necessary decision will be made. Discretionary decision rights on settlement are reserved with the lender. A settlement letter will be offered to the customer in the situation of compromised settlement request consideration.

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.

  • If the borrower is unable to pay the entire outstanding loan amount, then in some cases a loan settlement may be offered to them. To initiate the process, the borrower must formally request the lender for partial waivers on the outstanding amount. Once the lender approves this arrangement, it is officially termed as a loan settlement.

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