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Reference guide OTS / Settlement
My bank offered an OTS at 40% of the outstanding — is this a good deal?
Anonymous
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Expert answer
A One-Time Settlement (OTS) at 40% can be a good deal, but it depends on:
- How long the account has been an NPA — older NPAs usually leave more room to negotiate.
- What the 40% is of — principal only, or principal + interest + penalties? Compare the same numbers.
- Whether you can pay — OTS is usually a lump sum. If you can't raise it, a structured plan may suit you better.
Negotiation tips: the first offer is rarely the final one — a counter-offer is normal. Always get the settlement terms in writing on the bank's letterhead before paying anything.
After paying, get a No Dues Certificate in writing, and check your credit report is updated. Note that a "settled" account affects your credit score differently from a "closed" one.
SA
SingleDebt Advisor
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