Settlement and write-off policy

When a settlement is considered

Where a borrower is in genuine, evidenced difficulty and full recovery is unlikely, a settlement may be agreed. It is a discretionary arrangement, assessed case by case, and never offered as an incentive to stop paying.

How it is recorded

Any settlement is documented in writing and states the amount payable, the deadline and the consequence. Credit bureaus are informed that the account was settled rather than paid in full, which affects your credit profile and future borrowing.

Write-off

A write-off is an internal accounting step taken when recovery is no longer expected. It does not extinguish the debt, and it does not remove the record from your credit report.

No-dues confirmation

On full repayment we issue a No Objection Certificate automatically. On a settlement we issue a letter stating precisely what was settled, so there is no ambiguity later.

What a settlement is

A settlement is an agreement to close a loan for less than the full amount outstanding, used where recovery in full is not realistically achievable and the alternative is prolonged default. It is offered at the lender’s discretion, never as a routine alternative to repaying, and always recorded in writing before any payment is made.

What a write-off is not

A write-off is an internal accounting step taken when recovery is no longer expected. It does not cancel the debt, does not release you from the obligation, and does not stop the lender from pursuing recovery later. Settlement and write-off are different things and are not interchangeable.

How this affects your credit record

A loan closed by settlement is reported to credit information companies as settled rather than closed, and that distinction is visible to other lenders for as long as the record persists. It generally makes future borrowing harder and more expensive. Repaying in full, including after a delay, reports better than settling.

Who approves a settlement?

Settlements are approved by the lender under a documented authority matrix, not by a collections agent or a sourcing partner. Anyone offering you a settlement outside a written communication from the lender is not authorised to do so.

Can I avoid a settlement once I am overdue?

Usually, yes. Overdue accounts accrue penal charges of 0.1% per day on the overdue principal only — these are not capitalised and no interest is charged on them. Clearing the outstanding amount closes the loan normally and is reported as fully repaid.

ಕಾಗದಪತ್ರವಿಲ್ಲದ ಸಾಲ

No documentation, disbursal to your own bank account, and every charge disclosed in your Key Fact Statement before you accept.