Your go-to resource for financial wellbeing

Loan Settlement

Rakesh missed his Union Bank EMI in March. Didn't think much of it. His company had just cut his team, and he figured he'd catch up once the severance came through. It never did. By August the account showed NPA on his CIBIL report, and a message popped up on his banking app: settle your loan online. He'd never heard of a bank letting you do that from a phone. Most people haven't.

By Mohit Juneja | 25 August 2026

Loan Settlement

To settle a personal loan, you negotiate with your bank or NBFC to accept a reduced lump sum as full and final payment instead of the full outstanding amount. When you have more than one personal loan, this same process repeats separately for each one, in an order that protects you the most.

By Mohit Juneja | 25 August 2026

Loan Settlement

Axis Bank may agree to settle your personal loan, generally where you're genuinely unable to repay in full. Not the full amount. Less. You stop paying EMIs, save a fixed amount each month into a separate account, and after several months or a year, present that accumulated amount as a settlement offer. Axis Bank isn't obligated to accept, but under RBI guidelines, banks must follow a board-approved settlement policy and can't reject an eligible case for reasons outside that policy. If accepted, the account gets marked "Settled" on your report once the agreed amount is paid and the lender confirms it in writing.

By Mohit Juneja | 25 August 2026