Regarding Education loan
6 months ago
Sir/Madam,
Me and my brother taken education loan from IOB bank before 10 years (2010-12) and due to family situation, we are unable to pay it back, now both the loans were transferred to Asset reconstruction company and they created separate account with my name so totally 3 education loan is displaying in my cibil report. My doubts are below. Please help me on this. Thanks!
Note: my father has two wife's so he's the guardian for both 2 education loans
1. If I settled my loan will lender update as "Post written off settlement" in credit report?
2. If I pay in full to ARC, still it will consider as settlement? (because already loan is transferred to ARC)
3. If I pay in full to ARC, my cibil score increase immediately?
4. if one loan (brother's one) is not paid out of two, will my cibil score damage due to this?
Settlement Status on Credit Report: When you settle a loan, it may typically be reported on your credit report as "Settled" or "Post written off settlement." A settled status indicates that you and the lender have reached an agreement to close the account for an amount less than the total outstanding debt. It can have a negative impact on your credit score, although it may be considered less negative than an unpaid, outstanding debt.
Payment to ARC: If you pay the loan in full to the Asset Reconstruction Company (ARC), it should ideally be reported as "Paid" or "Closed" rather than "Settled." However, the specific reporting can vary, and you should discuss this with the ARC to ensure that it is reported accurately.
Immediate Impact on CIBIL Score: Paying off or settling a loan does not necessarily lead to an immediate increase in your credit score. Credit scores are influenced by various factors, and while paying off debts is generally positive, it may take some time for your credit score to reflect the improvement.
Impact of Unpaid Loan: If one of the loans (your brother's) remains unpaid, it could potentially have an impact on your credit report, especially if you are listed as a co-borrower or if your finances are linked in any way. An unpaid loan can negatively affect your credit score and creditworthiness.
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