What a Bank Lender Does?
The borrower might find it hard to make the repayments as he might have lost his job, met with an illness or an accident. Lenders or bank professionals will sit down with the borrower and determine the seriousness of the situation, and whether it is genuine. They may decide to write-off the difference between the payment made and the one that is due.
This gives the borrower breathing space but he is unaware of the fact that he pays a heavy price for this solution.
Impact of Loan Settlements on a CIBIL Score
- When the loan is written-off by a bank or lender, it is reported to CIBIL.
- The relationship between the lender and borrower has ended. Instead of closing the transaction, it is marked as terminated.
- When the loan is viewed as settled, the credit score drops down by a few points and is considered to be negative.
- In future, if applying for a loan with the lender, they may hesitate in agreeing to a loan.
- If the lender finds the word settled in the credit report, a loan application will be rejected.
Borrowers Way Out
- If as a borrower you are facing issues repaying a loan due to medical reasons or unemployment, don’t always go for the one-time settlement option that your lender offers you.
- Consider liquidating a part of a portfolio or sell an asset to pay off your loan. Get help from family and friends. If they have a good CIBIL score, they can apply for a personal loan with the fund provider company to help you come out of the debt cycle.
- Ask your lender or bank to extend the repayment terms or waive the repayment interest for a certain period.
- Try to consider settlement as the last option as it might put you in great difficulty in the future.
- Check your credit score and improve it by repaying existing financial obligations on time. Doing this will help your credit score to surge in the following12 to 24months.
Going for a settlement should be considered a last choice. Be smart instead of blindly trusting the lender just because he has a solution. Get help from friends and relatives as they could provide you with a loan from the tfc funding company. Everyone has the right to lead a debt and stress-free life.Top Searches - Trending Searches - New Articles - Top Articles - Trending Articles - Featured Articles - Top Members
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