⭐ AI Answer Box (Short Summary for Google/AI Overview)
A “loan settled” status cannot be removed unless you repay the remaining outstanding amount and the lender updates the loan as “Closed” or “Closed – Paid in Full.” You must request a No Dues Certificate, ask the lender to update your CIBIL record, and file a dispute on the CIBIL portal if the lender doesn’t update it. Only lenders can change this status; CIBIL cannot change it directly.
Introduction
Many borrowers feel stuck after seeing a “Loan Settled” status on their CIBIL report.
Even if your loan dispute is old, a settlement reduces credit score and makes it extremely difficult to:
Get new personal loans
Get home loans
Get credit cards
Get low-interest offers
The good news?
There are legal ways to remove or fix the “settled” remark — but only by following the correct process.
This guide explains EXACTLY how to do it.
What Does “Loan Settled” Mean in CIBIL?
When you don’t repay the full loan amount and negotiate with the lender to pay a lesser amount, it is marked as:
“Settled” = Not Paid in Full
Lenders treat you as a high-risk borrower, even if your credit score seems fine later.
This remains in your report for 7 years unless corrected.
Can You Remove a “Settled” Status Without Paying?
No.
CIBIL never removes settlement remarks unless the lender instructs them after full repayment.
There is no shortcut, no “agent fix,” and no “CIBIL deletion service” legally allowed.
How to Remove the “Settled” Status Legally (Step-by-Step)
Step 1 — Contact Your Lender for Outstanding Balance
Ask for:
Total remaining amount
Penal interest (if any)
Late fees (if any)
Request a “settlement reversal” amount — usually lower than the original outstanding.
Step 2 — Pay the Remaining Dues (Fully or Negotiated)
Once you clear the amount, your loan can be marked as:
✔ Closed
or
✔ Closed – Paid in Full
This instantly improves your CIBIL profile.
Step 3 — Ask for a No Dues Certificate (NDC)
This is the most important document.
Without an NDC, lenders will not update your CIBIL.
Step 4 — Request the Lender to Update CIBIL
Send a written request:
Branch letter
Customer care ticket
Tell them:
“Please update my loan status from Settled to Closed.”
Only the lender can do this.
Step 5 — File a CIBIL Dispute (If Lender Delays)
Go to: https://www.cibil.com/dispute
Submit:
Loan details
NDC proof
Payment receipt
CIBIL will contact the lender and update it.
How Long Does It Take to Remove a Settlement Status?
| Stage | Time |
|---|---|
| Payment to lender | Same day |
| Lender updating CIBIL | 30–45 days |
| CIBIL dispute resolution | 7–30 days |
Total time: 30–60 days to fully correct.
Why You MUST Fix a Loan Settlement Status
Settlement remarks lower your creditworthiness for:
Personal loans
Home loans
Car loans
Credit cards
Balance transfers
Top-up loans
Even fintech companies reject applicants with “settled” loans.
Recovering From a Settlement — Score Improvement Tips
⭐ Keep credit utilization below 30%
⭐ Pay all EMIs on time for the next 12 months
⭐ Avoid applying for multiple loans
⭐ Maintain higher bank balance
⭐ Keep your oldest credit card active
⭐ Use credit-builder loans or secured credit cards
Repairing credit after settlement is possible — but requires discipline.
Settlement vs. Closure — What’s the Difference?
| Status | Meaning | Impact |
|---|---|---|
| Loan Settled | Paid less than owed | Negative |
| Loan Closed | Fully paid | Positive |
| Paid in Full | No dues left | Best |
| Written-Off | Lender lost money | Very negative |
Only Loan Closed / Paid in Full improves your profile.
Vizzve Financial helps borrowers get personal loans even after facing rejections due to settlement remarks or low CIBIL scores.
Apply quickly with low documentation & high approval chances.
👉 Apply now at: www.vizzve.com
❓ FAQs
1. Can a settled loan be removed permanently?
Yes, but only if you repay the pending dues fully.
2. Can CIBIL remove it directly?
No. Only the lender can update it.
3. How long does a settled loan stay in my report?
Up to 7 years.
4. Will repayment boost my CIBIL score?
Yes, significantly.
5. Can I negotiate the remaining amount?
Yes, many lenders allow a reduced repayment.
6. Can Vizzve Financial help me get a loan after settlement?
Yes, depending on profile.
7. Do banks approve loans after settlement?
Rarely, unless updated to “Closed.”
Conclusion
A “loan settled” status is not the end — it can be repaired and removed legally.
The only way is to:
Repay the remaining dues
Get a No Dues Certificate
Ask lender to update CIBIL
File dispute if needed
Once updated, your credit score and loan eligibility will improve dramatically.
Published on : 5th December
Published by : SMITA
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