Personal loan settlement

Personal loan settlement involves the negotiation and agreement between a borrower and a lender to resolve an outstanding debt for less than the total amount owed. In situations where a borrower is struggling to meet repayment obligations, a settlement can provide a mutually beneficial solution. Typically initiated by the borrower or a debt settlement company on their behalf, the process involves negotiating with the lender to accept a lump sum payment, often lower than the original loan amount, as a full and final settlement. While settling a personal loan can provide financial relief and help avoid the negative consequences of default, it's crucial for borrowers to be aware of potential impacts on their credit score and to ensure that the settlement terms are clearly defined and documented in writing before making any payments.