Can LAP be settled?

Answer

A:

Yes, a Loan Against Property (LAP) can be settled, but it depends on the terms of the lender and the borrower’s financial situation. Settlement usually happens when the borrower is unable to continue regular repayments and negotiates with the bank or NBFC for a one-time settlement (OTS).

In such cases, the lender may agree to accept a lump-sum amount that is less than the total outstanding, in order to close the loan and recover dues quickly. This is more common when the borrower proves genuine financial hardship, such as job loss, medical emergency, or business failure.

However, settlement is recorded as “settled” in your CIBIL report, which can negatively affect your credit score and future borrowing ability. Therefore, it should be considered only when restructuring or rescheduling the loan is not possible.

A Loan Against Property can be settled through a one-time settlement with the lender, but it may impact your credit history. It is always better to explore options like restructuring or rescheduling before choosing settlement.