How Does a One-Time Settlement Process Function?
A one-time loan settlement (OTS) is a process where a borrower and a lender agree to settle a loan for a lump sum payment, which is typically less than the full amount owed. Here is an overview of how a one-time settlement typically works: It is important to note that the terms of an OTS agreement can vary based on the specific circumstances of each case, and the settlement may have an impact on a person’s credit score and financial situation. Additionally, there may be tax implications associated with a one-time loan settlement, depending on the type of loan and the settlement amount. Does One-time settlement affect cibil score? Yes, a one-time settlement negatively impacts your CIBIL score. When you settle your loan, the bank marks it as “settled” in the report instead of “closed.” This indicates that you were unable to fully repay the loan, which is seen as a sign of financial distress. As a result, your CIBIL score remains negatively affected for up to 7 years.
Facts and circumstances of Supreme Court’s judgments about OTS
The Supreme Court of India has made several judgments regarding the one-time settlement (OTS) of loans, and the specific facts and circumstances of each case have influenced the outcome of the judgment. Click Here to finance for your One Time Settlement In some cases, the Supreme Court has upheld the rights of banks and financial institutions to recover their loans through legal means, including the OTS finance. The court has emphasized the importance of proper documentation and transparency in the loan settlement process. In other cases, the Supreme Court has ruled in favor of borrowers, emphasizing the need for fair and reasonable loan settlement terms. The court has also considered the overall financial situation of the borrower and the potential impact of loan settlements on their ability to repay other debts. It is important to note that the Supreme Court’s judgments in this matter can vary based on the specific facts and circumstances of each case, and it is advisable to consult with a legal expert for a more accurate understanding of the impact of these judgments on a particular loan settlement situation. What was held by the court in these OTS judgments? The Supreme Court of India has made several judgments regarding one-time settlement (OTS) of loans, and the specific holdings of each judgment have varied based on the facts and circumstances of each case. In general, the Supreme Court has held that: It is important to note that these holdings are not applicable in every case and may vary depending on the specific facts and circumstances of each case. Therefore, it is advisable to consult with a legal expert for a more accurate understanding of the impact of the Supreme Court’s judgments on a particular OTS situation. Click Here to finance for your One Time Settlement
OTS (Case Study)
Life is full of challenges; one of them is NPA situation. This comes when someone defaults in bank or nbfc loan. This is very critical as it kills few years from progress of professional life and financial progress. It also kills the huge amount of money in terms of heavy interest & charges levied by bank/nbfc. Also, takes away your sleep, due to legal actions taken by bank through DRT & NCLT proceedings or through their sale process of collateral. Click Here to finance for your One Time Settlement So how to get out of this Situation or Status. One of the best ways is to approach the bank for OTS or One Time Settlement of your Loan. Here is one case study: One of our clients was NPA from some nationalize bank with outstanding of Rs.22.58 cr. Clients asks for finance arrangement of Rs.17.00 cr as they have arrangement of Rs.5 cr with them. We studied the whole case found that: out of total outstanding of Rs.22.58 cr, principal amount was Rs.17.02 cr and collateral valuation was somewhere around Rs.40 cr. As per our industry rule, we can only fund up to 50% of market valuation of collateral and we know from our experience the final distress valuation must be come around Rs.34-35 cr. We suggested client to apply for a One Time Settlement (OTS) in bank. We suggested applying for OTS of Rs.17 cr and also giving a 10% cheque as token amount of OTS. As per suggestion, client applied for OTS of Rs.17 cr and also simultaneously applied a proposal for funding with us. But bank gave an OTS of Rs.17.58 cr & given time of three months. Client accepted the OTS and now, trying for funding with us for amount of Rs.12 cr as Rs.5cr was already with client. After ups & down of loan process, we finally managed to get loan sanction for Rs.12 cr. We paid Rs.12 cr directly to bank & Rs.5.5 cr was deposited by client. In this way, total OTS amount was given to bank and all the securities come to us. Let’s see how client benefited out of this OTS & funding: • Client saves Rs.5 cr by going through One Time Settlement (OTS)• Client not only saves Rs.5 cr, but also saves interest on 5 cr( if takes a loan of Rs.17cr)• Client gets moratorium period for six months• Client gets a total tenor of Five years for repayment• NPA status will be wiped from day one• New track record of loan started with us• Client gets immediate relief from DRT proceeding• Not only, successfully saves his valuable assets of factory but also nest of family, his House property Click Here to finance for your One Time Settlement
