How Debt Settlement Companies in India Work

by Osheen Kharbanda blogger

Debt settlement refers to a situation where the borrower is unable to pay the original loan amount and interest. In this situation, the lending bank offers a One-time Settlement solution to the borrower wherein he is required to pay an amount that is less than the outstanding payment.It is also known as as Debt Relief or Debt Adjustment or Loan Settlement.

How Does Debt Settlement Work?

The One-Time Settlement offer is made by the creditor bank when it is convinced that the borrower has a genuine reason for not repaying the loan amount in full. It is usually made after 6 months of non-payment of dues and the amount ranges from 10% to 50% of the payable amount. The percentage is decided based on various factors such as the paying capacity of the debtor, the reason for non-payment, the amount of outstanding loan, etc. 

Since the One-time settlement process entails negotiation and other crucial paperwork, experts advise people to take the help of debt settlement companies. Since these agencies have experience in the business and are skilled in this work, they can help in streamlining the entire process and make it less cumbersome. There are various debt settlement companies in India such as Freed that you can consider for smooth debt settlement. Let us understand how Debt Settlement companies in India work and the risk associated with it. 

How do Debt Settlement Companies In India Work?

In India, the option for debt settlement is limited to some debts. The settlement can’t be procured on secured loans like auto loans, house loans, etc. Another very important thing to keep in mind is that you can avail yourself of a One-time Settlement only if you have sufficient funds for payment through debt settlement. 

Once the settlement company is satisfied that the account has enough for a lump-sum offer, it negotiates on the borrower’s behalf with the creditor to accept a smaller amount.

Before settling your debt with creditors, it is imperative to choose the right debt settlement company. Only those companies that offer official legal prospectuses and are affiliated with a bank for settlement should be considered. Freed is India's first Consumer Debt Relief Company that is helping debt-burdened consumers get debt free and achieve their financial freedom.

How to Choose the Best Company for Debt Settlement

Debt Settlement involves a lot of risk and other complexities, however, in some cases it is the only option that borrowers are left with. In such a situation, it is very important to choose a reliable and competitive debt settlement company that can reduce financial debts smoothly with minimum repercussions. Keep the following points in mind while looking for a debt settlement company. 

1. First and foremost, it is very important to check the reviews of the company, both online and in-person. Since debt settlement involves a lot of risk, money, and paperwork, you must do ample research to check the company for its authenticity. 

2. Companies that ask for any sort of advance payments are obvious red flags that you must avoid at all costs.

3. Make sure fees are structured as a percentage of the debt eliminated rather than of debt balance at enrollment. 

You should only trust a reputed company like Freed for something as critical as debt settlement. In all of this, always remember that a One-time Settlement always has an adverse effect on your credit score. Hence, it should be your last resort. 

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About Osheen Kharbanda Innovator   blogger

17 connections, 1 recommendations, 92 honor points.
Joined APSense since, November 13th, 2019, From new delhi, India.

Created on Jun 15th 2022 04:28. Viewed 77 times.


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