A written-off loan means the bank or lender has declared your loan a loss and removed it from their records. This usually happens if you don’t repay the loan for over 180 days. However, this doesn't mean you no longer have to repay. The lender can still take legal action, and your credit score will be seriously damaged. If you want to remove the written-off status and improve your financial reputation, there are steps you can take.
Before taking any action, ask your lender why your loan was marked as written off. It could be because of missed payments or financial problems. Going over your loan history will help you understand what went wrong and what you need to fix.
A written-off loan impacts your CIBIL score, which is important for getting loans in the future. Get a copy of your credit report from CIBIL or other credit agencies. Check if the loan is marked as "written off" and review the details. If there are mistakes, you can challenge them with the credit bureau.
Contact your bank or financial institution and let them know you want to pay off what you owe. Many lenders are ready to negotiate, especially if you're ready to make partial payments.
If you can't pay the full amount, talk to the lender about a settlement plan. A one-time settlement (OTS) allows you to pay a lower amount to clear your debt. Make sure you get written confirmation that the loan status will be updated in your credit report.
If possible, repay the full amount to completely remove the written-off status. A full repayment increases the chances of getting the loan status changed to "closed" or "settled" in your credit report.
Once you settle or repay the loan, request a No Dues Certificate from the lender. This document proves that you have cleared all dues and can be used to update your credit report.
After obtaining the NOC, inform the credit bureau and submit the necessary documents. It usually takes 30 to 45 days for the changes to reflect in your credit report.
Keep an eye on your credit report to ensure that the changes have been made. Regularly checking your credit score will help you stay informed about your financial health and avoid future issues.
Changing a written-off loan status is not easy, but it can be done if you follow the right steps. The important thing is to talk to your lender, pay what you owe, and make sure your credit report is updated. Improving your credit score will help you with future loan applications and financial stability.
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A written-off loan means the lender has declared the loan as a loss due to non-repayment, but the borrower is still liable to pay the amount.
It is difficult but not impossible. If you clear your dues and improve your credit score, lenders may consider your loan application.
A written-off loan can remain on your credit report for up to seven years, affecting your future borrowing ability.
Yes, but only partially. A "settled" status is better than "written off," but a "closed" status is ideal.
OTS is an agreement between the lender and the borrower where the borrower pays a reduced amount to clear the dues.
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