Struggling with Personal Loan Default? Know Your Legal Options

Personal loans are unsecured financial obligations that often come with high interest rates and steep penalties for late payments. If you find yourself unable to meet your monthly EMI obligations due to job loss, medical emergencies, or business downturns, you are not alone. Legal debt settlement is a valid and structured way to exit the debt trap.

What is a Personal Loan Settlement?

A personal loan settlement, also known as a One-Time Settlement (OTS), is an agreement where the bank or NBFC allows you to pay a lump sum amount—usually much lower than the total outstanding—to close the loan account forever. While this is often a last resort for banks, our legal experts help you negotiate the best possible terms by presenting your financial hardship effectively.

Why Banks Agree to Settlements

Banks prefer to recover a portion of the principal rather than letting the loan turn into a total Non-Performing Asset (NPA). Our legal team leverages this by using RBI's fair practices code to ensure they offer you a fair deal.

Our 4-Step Legal Settlement Strategy

1. Financial Hardship Assessment

We document your genuine reasons for default (medical reports, termination letters, bank statements) to build a strong legal case.

2. Cease & Desist Notices

If you are being harassed by third-party agents, we issue immediate legal notices to stop the harassment while the negotiation is ongoing.

3. Strategic Negotiation

Our advocates negotiate directly with the collection managers or nodal officers to waive off accumulated interest and penalties.

4. Verification of Settlement Letter

Many borrowers get scammed by fake settlement offers. we verify the authenticity of the OTS letter before you make any payment.

Your Rights as a Personal Loan Borrower

Even if you owe money, you have rights protected under the Indian Constitution and RBI guidelines:

  • Right to Privacy: Agents cannot disclose your debt to your neighbors or employer.
  • Right to be Heard: You have the right to explain your financial situation to the bank.
  • Right to Fair Treatment: No threats of physical force or criminal action for civil debt.