How Does Credit Card Loan Settlement Work?

Step 1: Assessing Your Financial Situation
First, get real with your numbers. What’s your total outstanding? Can you arrange a one-time payment (say 40-60%)? If yes, move forward.

Step 2: Contacting the Credit Card Issuer
Call the bank’s recovery or customer service team. Let them know you’re financially distressed and want to explore a settlement.

Tip: Don’t panic. Be honest and firm.

Step 3: Negotiating and Receiving the Offer
The bank might initially resist, but will usually offer a settlement amount after checking your payment history and delinquency status.

Example: For a ₹1,00,000 bill, they may offer settlement at ₹50,000.

Step 4: Getting a Settlement Letter
Never pay a rupee without a written settlement letter. This document is your protection against future claims.

Step 5: Finalizing the Settlement
Make the lump sum payment within the stipulated time, and your account will be marked as “Settled.”