New Delhi, April 10 -- Sometimes, individuals come across situations that can drain their finances or lead to income stopping. For example, a major medical emergency, accident, etc., can lead to a huge hospital bill and drain personal finances. A situation like Covid led to many people losing their jobs, a pay cut, etc. During such situations, servicing personal loan EMIs can be difficult. Considering your borrower's deteriorated financial situation, the bank may make a loan settlement offer.

In this article, we will understand what is a personal loan settlement, its pros and cons, its impact on the credit score and report, and how to remove 'settled' status from the credit report.

A personal loan one-time settlement is a mutual agreeme...