Cibil Score: Everyone wants to clear the loans within the stipulated time frame! Sometimes it can’t be done with incessant problems. Due to calamities like corona, loss of job, accident etc., there is no ability to repay the loan. One-time settlement is the option that many choose in such dire situations. But the ultimate loser is the consumer!!
What is the process?
For example, suppose Vishwa takes a loan of Rs.5 lakh with a five-year term! EMIs paid regularly for three years. Due to the sudden corona lockdown, there is no situation to go to work for six months. All the money saved during this time was sufficient for household expenses. There is no condition to pay EMIs. Not knowing what to do, she contacted the bank officials. The officials who understood the situation offered a one-time settlement (loan settlement). Vishwa is happy that the loan will be settled with less money. Days passed. As life returned to normal, they thought they would take a loan and buy a car. After going to the bank, she was shocked when the loan was refused.
A record of up to seven years
A lot of process takes place between one time settlement and another new loan. A bank that understands the customer’s situation and pays a lot of attention will remove the loan from the books. That means write off. After that, the bank officials will inform Cibil that it has been settled that the loan has not been closed. The company does not recognize it as a transaction. As a result, the customer’s Cibil Score drops by 75-100 points. Sybil keeps this record for seven years. CIBIL score and customer credit behavior are what financial institutions look at for lending. A negative remark will be taken on both these points at the time of settlement. That is why banks refuse loans.
In such situations, experts suggest that loan settlement should be used as a last resort. In case of default, it is better to sell some of the assets in your portfolio to make money. Or you can seek the help of friends or relatives. Experts say that if that is not possible, the bank officials should be asked to extend the loan period. It is okay to ask for an opportunity to repay the principal without interest. Analysts say that if none of this happens then one-time settlement should be taken. It is suggested to check the CIBIL score after the settlement is completed. It is said that if the score goes down then you have to work hard for 12-24 months to increase it.
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