New Delhi, April 10 -- To escape mounting debt it is important to settle pending loans. Still, it often carries long-term challenges for your overall credit health. Now, as credit management awareness rises across India in 2025, it is crucial to clearly understand how loan settlement can impact your credit score and future borrowing prospects. This write-up is dedicated towards discussing the same in detail.

A loan settlement is nothing but a mutual agreement between the borrower and the lender where the borrower pays a reduced amount of money along with other stipulations to close the debt.

This option of loan settlement is generally offered when the borrower is under immense financial stress and is unable to meet the repayment terms a...