New Delhi, April 14 -- Personal loan indebtedness can prove to be difficult to manage, particularly when one is financially distressed. Borrowers tend to turn to two options: loan restructuring and loan settlement. Both seek to bring an end to agony, but making decisions that are in your best interest regarding your financial well-being is based on being aware of these distinctions.

Restructuring of the loan entails a change in its current terms to help the borrower repay. The process may involve changing the repayment schedule, lowering the rate of interest, or lengthening the period of the loan. The key aim is to make the repayment easier without the borrower defaulting on the loan.

If the lender and borrower decide to pay a lesser am...