One-time settlement: what is paid, what is waived, what is reported
A one-time settlement, which the RBI's rules call a compromise settlement, is an agreement under which a lender accepts less than the amount it claims and gives up the rest. Closing a loan in full is different: every rupee of principal, interest and charges is paid, and nothing is waived. The calculator above splits the lender's claim into principal, interest and charges because a settlement offer is often compared first with the principal alone: an offer below the principal means part of the money lent is being waived as well as all the interest and charges.
A lender does not settle at the discretion of one officer. The RBI's Directions on resolution of stressed assets, issued on 28 November 2025 and carrying forward the framework of 8 June 2023, require every bank and NBFC to settle under a Board-approved policy. A settlement whose payments run beyond three months is treated in the bank's books as a restructuring. After a settlement, the same lender may not take a fresh exposure to the borrower for a cooling period its policy sets: at least 12 months, other than for a bank's farm credit.
What “settled” means on a credit report
The RBI's Credit Information Reporting Directions for commercial banks require a lender to report cases where a compromise settlement has taken place, with the reason. They reserve the status “settled” for one situation: a borrower who could not repay on the original terms is given a waiver of principal, interest or both. Wrong debits and contested charges are to be reported as “disputed”, not as settled. The Directions do not say how long a status stays on a report or how it affects a score, and this page does not estimate either.
An account whose relationship with the lender has ended goes in the lender's next submission to the credit bureaus. From 1 July 2026 banks submit data as on the 9th, 16th, 23rd and last day of each month, within four calendar days for the first three dates and by the 5th of the next month for the month-end file. The Directions also say no repayment, including the last instalment, may be left unreported.
What should exist in writing before money moves
No RBI rule read for this page prescribes the form of a settlement letter. The rules that follow a settlement do, however, run from it. The 30 days for returning original property documents count from “full repayment / settlement”; the reporting rule turns on whether a waiver was given. The amount, the payment dates, the account being closed and the fact that the payment settles the claim are the facts those rules are applied to. For personal loans, the RBI's rule first issued on 13 September 2023 requires original documents to be returned, and charges on any registry removed, within 30 days, with Rs 5,000 a day payable where the delay is the lender's fault. The RBI also lists a no-dues certificate among the basic banking services a bank provides on loan accounts.
If the record is not updated
A complaint about credit information goes first to the lender or the bureau. The lender has 21 days to send corrected data to the bureau. If the complaint is not resolved within 30 calendar days of filing, the complainant is entitled to Rs 100 for each day of delay, shared between the lender and the bureau as the Directions set out.
If the lender does not reply within 30 days, or the reply does not resolve the complaint, the Reserve Bank – Integrated Ombudsman Scheme, 2026, in force from 1 July 2026, allows a complaint to the RBI Ombudsman within 90 days of the later of the end of that period and the lender's last reply. Complaints are filed online at cms.rbi.org.in. The 2021 scheme it replaced allowed one year; complaints filed before 1 July 2026 stay under it.
Every rule cited here, with the paragraph and a link to the RBI's own text, is in the rule sheet under the calculator.