When you’re struggling with loan repayments, you might hear about loan settlement and loan restructuring as possible solutions. While both help ease your financial burden, they are very different — and choosing the right one can make a big difference. Let’s understand both and see how Loanifyr can help.
What Is Loan Settlement?
Loan settlement is when you pay a one-time reduced amount to the lender to close the loan. The remaining unpaid amount is waived off, and your loan is marked as “settled.” It is usually used when the borrower genuinely cannot repay the full amount.
Loan settlement can lead to a short-term dip in your credit score, but it helps you stop bank harassment, close the loan legally, and get a fresh start.
What Is Loan Restructuring?
Loan restructuring means changing the terms of your existing loan. This could include reducing your EMI, extending the repayment period, or even a temporary break from payments. It does not involve waiving off any part of the loan. You still pay the full amount — just with modified terms.
It’s suitable when you still have a source of income but are finding it hard to pay current EMIs.
Key Differences
| Feature | Loan Settlement | Loan Restructuring |
|---|---|---|
| Payment | One-time reduced amount | Full amount over longer time |
| Credit Impact | Moderate (short-term) | Minimal |
| Use Case | Severe financial hardship | Temporary cash-flow issues |
| Loan Status | Marked as “Settled” | Remains “Standard” if paid |
How Loanifyr Can Help
At Loanifyr, we help you decide the right option based on your current situation. If you’re under agent harassment, unable to pay at all, or looking for credit card debt settlement, we handle the full loan settlement process for you.
If you’re still earning but need time, we guide you on loan restructuring and help you talk to the bank for a revised plan.
Confused between the two? Visit www.loanifyr.in and let our experts help you make the right financial move.