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Loan Settlement vs Loan Closure

Loan closure means you repaid the full amount as agreed. Loan settlement means the lender accepted less than the full balance. Closure helps your credit; settlement hurts it.

Loan closure means the borrower has repaid the entire loan amount as per the agreement.

Loan settlement means the lender has accepted a lower amount than the total outstanding balance.

  • Loan closure is positive for your credit profile.
  • Loan settlement may hurt your CIBIL score and stays visible on your credit report for years.