What is a one-time settlement? Will the bank give me a loan again after settlement?
What is Loan Settlement?
This is the end process of taking a loan. That means you took a loan from the bank. You created EMIs for the loan. You paid the EMIs on time and it continued regularly. There are two types of loans that people take. One is an unsecured loan and the other is a secured loan. Unsecured loans are those where there is no guarantee from your side. Secured loans are those where some kind of collateral or guarantee is attached.
So, if you take a loan and do not pay the EMI on time, then the bank tries to recover its money by calling you through harassment calls or recovery calls. And when you are unable to make the payment, then after the account becomes NPA, the bank gives you a settlement offer. When you complete the settlement, then your loan gets closed through an NOC, meaning a No Objection Certificate is issued. After that, the bank will neither call you nor do any recovery.
Future you want to take a loan again
But after that, if in future you want to take a loan again, or a credit card, or any financial product on loan, then the bank will not give it to you again easily. If you want to take a loan again after settlement, then you need to do two things. You need to talk to the bank where you did the settlement and tell them that you had taken a loan, and due to unavoidable circumstances you settled it for a lower amount. They had given you an NOC. Now you want to pay back the remaining outstanding amount. Request them to tell you the pending amount. After taking that payment they should provide you with an NDC so that you can submit it in CIBIL and correct your CIBIL report.
Once you do this, if your CIBIL score was below 600. Then after this process it can gradually move towards 700 and even above 700 automatically. And just like earlier when you used to do loan transactions with banks. The banks will again become ready to provide you loans.
What is One Time Settlement?
One Time Settlement means settling the amount in one go and taking the NOC after making the payment. There are two types of settlements. One is EMI settlement. That means whatever settlement amount has been decided, you pay that amount in EMIs for 3 months or 6 months. Even they normally do not extend it beyond 6 months. The second method is One Time. That means whatever amount has to be paid, you pay it at once and finish it completely.
So, One Time OTS means that you discussed with the bank, your outstanding amount was ₹1 lakh, and after negotiation you brought it down to ₹30,000. Then they prepared a letter stating that your outstanding was ₹1 lakh. But by paying ₹30,000 you can settle the matter with the bank. That becomes the settlement amount, and you have to pay it in one time only. That is called OTS, and this is also the meaning of One Time Settlement.
What happens after loan settlement?
You might have heard about this. So friends, when you complete question number one, then if you want to take a loan again after loan settlement, then yes, you can definitely get it. Because when you take the NDC, and after taking the NDC you go to CIBIL dispute section and write there that this loan showing as One Time Settlement or Settlement or Written Off, I have already paid it, and attach the receipt, then within 30 days that matter can be removed from there. After that, you can take any small loan and increase your CIBIL score, or if you had settled any old credit card but still kept one active and continued transactions on it, then your CIBIL will increase through that, and the bank will again give you loans.
But if you think that without paying the bank, without breaking the OTS, without paying the settlement amount, if you apply for a loan, then friends, in that case you may still get a loan.
Loan Not Repaying Will I Go to Jail?
If you have taken an unsecured loan, credit card, or any other loan, then in this matter you will not go to jail. No legal action will happen against you, provided that you keep communicating with the bank, explain your financial problems, and request them for a settlement. But there are many people who take money from the bank and then behave aggressively with the bank as well. If recovery agents come to their house, they do not talk properly. They do not cooperate with bank employees. They fight, argue, or even get involved in physical violence. In such matters, friends, you may even go to jail, along with penalties, and you may also have to repay the bank’s money.
So the point here is that you should talk calmly with recovery agents or bank employees. You should not fight or argue. If you request for settlement politely, then nothing serious will happen. But if you fight or create trouble, then many things can happen.One question people regularly ask is: “Sir, my CIBIL has become defaulted. I have taken an NOC. Now how can I fix it? How can I improve my CIBIL score?”
Friends, before answering this question, you should again listen to the first and third questions carefully. For this, you need to raise a dispute and submit all the evidence while communicating with CIBIL. And if CIBIL does not understand your matter or does not resolve it within 30 days, then as per rules they may have to pay a penalty of ₹100 per day. You can also file a complaint against them with RBI.If you submit your NDC documents in CIBIL and they still do not resolve the dispute. Then once your issue gets corrected, your loan status will become clear and your CIBIL will start improving. Whether you are a defaulter, OTS case, or settlement case — everything can gradually become fine.
Our Team Support
If you want more information on this matter, then come on WhatsApp. We also provide CIBIL repairing services where, after checking your NOC, we apply for NDC. And once your NDC is cleared, we raise disputes on your behalf and help improve your CIBIL rating.
Whether you have taken a loan before or not, whether your CIBIL score is low and you do not know the reason, you can message or contact us on WhatsApp. For a small fee, if your valuable CIBIL score has gone down and is not improving, and you are repeatedly applying for loans without success. Then through our service you can repair your CIBIL and get loans while sitting at home. It may take some time, but one day you will definitely get loans again. Even if you have already done OTS, are a CIBIL defaulter, or your CIBIL score is extremely low.