Personal Loan Settlement is a process where a borrower negotiates with the lender to pay a reduced amount as a one-time settlement for a loan that they are unable to repay in full. This typically happens when the borrower faces financial hardships, such as job loss or medical emergencies. While settlement helps avoid legal action and clears the debt, it negatively impacts the borrower’s credit score. It is usually considered a last resort when other repayment options are not feasible.
