Loan-related problems, such as incorrect interest rates, EMI errors, misbehavior by recovery agents, or issues with loan closure, are becoming increasingly common in today's times. In such cases, the consumer needs to know that they are not alone; the Consumer Court is there to assist them.
If there is negligence, fraud, or unfair treatment in service by a bank or financial institution, justice can be obtained by filing a complaint in the consumer court. For this, you must first complain to the concerned bank. If there is no solution, a case can then be filed in the district, state, or national consumer forum.
The process of filing a complaint is easy, and it can be done both offline and online (edaakhil.nic.in). If you submit your complaint with the right documents, evidence, and details, the court can give a decision in your favor and also award you compensation.
Taking a loan has become a very common thing in today's time. Whether it is for building a house, buying a car, for education, or any other need, people easily take loans from banks or other financial institutions. But many times it happens that after taking a loan, some disputes arise. Such as - wrong calculation of EMI, high interest rates, penalty even after timely payment, or wrong information about the outstanding loan.
First of all, it is important to understand that the Consumer Court is a special judicial forum created to provide justice to any consumer, where the customer can register their complaint if he has faced any problem related to any service or product. Banking service also comes under this scope, and hence, if there is any dispute related to the loan, then a complaint can be made in the Consumer Court.
No, the question arises whether the matter related to the loan goes to the Consumer Court? So the answer is - yes. If the bank or financial institution has been negligent in providing service, has behaved inappropriately, or has intentionally caused mental or financial harm to the customer, then a case can be filed in the Consumer Court.
In today's article, we will learn in detail how loan-related disputes are resolved in the Consumer Court, in which situations you can complain, what the procedure is, what documents are required, and what benefits you can get from this. Apart from this, we will also understand that if the bank is not listening to you or is intentionally harassing you, then how can you protect your rights?
Consumer Court, which is called Upbhokta Adalat in Hindi, is a special court where common people, i.e,. Consumers (customers,s) can register their complaints if they have faced any problem related to any service or product. For example, if you have purchased a defective product, any service has not been received on time, or a bank, insurance company, mobile company, or any online platform has cheated you, then you can go to the Consumer Court with your complaint.
The purpose of this court is to provide quick and cheap justice to the customers. There is no long legal process here, and even a common man can put forward his point without a lawyer. If a company, shop, or institution misbehaves with the customer or provides poor service, then the Consumer Court can punish them and also award compensation to the customer.
You can go to the Consumer Court for a loan dispute in the following circumstances:
1. Wrong interest rate or hidden charges
If the bank had quoted an interest rate while giving the loan, but later changed it or added hidden charges without informing, then it is considered a deficiency in service. In such a situation, you can file a complaint in the Consumer Court.
2. Imposing a penalty even after paying EMI on time
If you have deposited the loan EMI on time, yet the bank has imposed a penalty or late fee and has not provided a solution to your complaint, then you can put your point in the Consumer Court.
3. Problem in loan closure or foreclosure
If you have repaid the entire loan, but the bank is not giving a No Due Certificate (NOC) or is unnecessarily obstructing making foreclosure (prepayment), then it is a violation of the rights of the customer. Consumer Court can also help in this case.
4. Giving wrong information in the credit report
If you have repaid the loan, but the bank has given wrong information in your CIBIL report, due to which your credit score has deteriorated, then you can complain about it in the Consumer Court.
5. Delay in loan processing
If you have completed all the necessary documents and eligibility, yet the bank is deliberately delaying the processing of the loan or rejecting it by giving wrong reasons, then this is also a violation of consumer rights.
Let us know in which situations the Consumer Court helps in land/property disputes:
1. Delay in the delivery of a flat or a plot
If you have made the payment on time but the builder is not giving you the property on time, then it will be considered as "Deficiency in Service". You can complain to the Consumer Court and ask for a delay payment penalty or compensation.
2. Not providing facilities as per the advertisement and promise
If the builder had promised some facilities like parking, club, gym, garden, etc. in the brochure or website, but you were not given them, then it is fraud, and a complaint can be made in the Consumer Court.
3. Construction without permission or changing the map
If the builder has done construction without approval or changed the map after your booking, then it is an unfair practice. You can seek justice by going to the Consumer Court.
4. Cancellation or levying additional charges by the builder after booking
If your booking was confirmed and later the builder arbitrarily cancels the booking or adds new charges, then it is illegal. You can complain to the Consumer Court.
5. Poor construction quality at the time of possession
If the construction quality of the flat or plot given to you is very poor or not as promised, then it will be considered a deficiency in service. The consumer court hears this and can award compensation.
Here we will tell you step-by-step how to file a complaint in the Consumer Court for a loan dispute:
First of all, you should file a written complaint in the Customer Care or Grievance Department (Grievance Cell) of that bank or institution.
Give full details in the complaint: loan number, date, your problem, documents, etc.
Keep a copy of the complaint with you.
Give them 30 days to resolve the problem.
If the bank does not take any concrete action on your complaint, or you are not satisfied with the solution, then you can file a complaint in the Consumer Court.
Consumer Court works at three levels, depending on the amount of your complaint, you have to decide where to go:
To file a complaint, you will need the following documents:
Complaint letter (clear and detailed)
Copy of communication/complaint with the bankLoan-relateded documents (loan agreement, EMI slip, bank statement)
Proof of your identity (Aadhaar, PAN, etc.)
Any kind of email, SMS, or other proof
How to file a complaint offline?
You can file a complaint by visiting the forum office.
You have to submit three copies (Original + 2 Copies).
A nominal court fee is also required to be deposited along with the complaint (e.g,
₹100 to ₹500, depending on the amount.
How to file a complaint online?
Go to the Government of India website https://edaakhil.nic..in.
Register on the “E-Daakhil” portal and file a complaint.
Upload all scanned documents.
Pay the fee online.
The court will hear your complaint and summon both parties.
If the complaint is found to be true, the bank can be fined, and you can also get compensation.
If the bank does not follow the court order, you can also file a contempt case against it.
Note: If you are trapped in the debt trap and are wondering how to get out of it, then you can take advantage of our loan settlement service and get free from your debt. If you want to know what loan settlement is, then you can read our loan settlement article below.
It is a financial process in which a bank or financial institution allows the loan taker to settle the loan by paying a lesser amount than the entire outstanding loan amount. This facility is for individuals who are unable to repay their loans on time and have a history of continuous default.
Under a settlement, the bank can agree on a lump sum amount, which closes the loan. However, it is essential to note that settling the loan can negatively impact your CIBIL score, potentially making it more challenging for you to obtain a loan in the future. Therefore, it should be adopted only as a last option.
When a person is unable to pay the EMI of his loan on time and the outstanding amount accumulates over a long period, the bank or financial institution offers the option of loan settlement. In this, the bank allows the customer to pay a discounted amount instead of the entire outstanding amount, thereby settling the loan matter.
The process of settlement comprises discussions between the bank and the customer, wherein the bank assures that the customer can't pay the entire loan amount. Thereafter, the bank issues a single-payment offer, which is typically lower than the outstanding loan balance. On the payment of this settled amount by the customer, the bank marks the loan as "Settled". Yet, this is not good for the CIBIL score since it is not treated as a "Complete Payment".
Hence, loan settlement should be opted for as a matter of last resort, and if at all possible, loan repayment schemes, loan restructuring, or alternative financial solutions must be opted for so that the credit rating is not impacted.
The following documents are required:
Aadhar Card, PAN Card, Passport, or Driving License, etc.
Salary slips, income tax returns, bank statements, etc.
Loan Settlement letter, loan details, payment receipts, etc.
Investment documents, property documents, insurance policies, etc.
If you want to apply it online, then follow the easy steps given below:
Visit the bank's website or app.
Open the official website or mobile app of your loan provider or bank.
Sign up if you already have an account, then log in. Otherwise, create a new account.
Check the customer support section.
Go to the 'Customer Support' or 'Contact Us' section on the website or app.
Here, you can find the option related to "Loan Settlement", such as:
Filing a loan-related complaint.
Request form for loan settlement.
Fill out the request form for the settlement.
Select the "Loan Settlement Request" option.
Fill in the required details, such as:
Your name
Loan account number
Email ID and mobile number
Reason (why you want to settle, such as financial problems or reduction in income).
Upload the required documents.
Upload documents that show your current financial situation, such as:
Income certificate or salary slip
Bank statement
Any other proof that explains your problem?
Upload all the documents by scanning them in the correct format (PDF or JPEG).
Submit and wait for the bank's response.
Once you have submitted the form, the bank will verify your request.
The bank will most likely contact you within 7-10 working days. They will notify you of the settlement through email, call, or message.
Read the bank's offer.
The bank will make an offer to waive some portion of your pending amount. Carefully read it.
If you accept the offer, go ahead. Otherwise, bargain further.
Make payment
Pay the decided settlement amount from the bank in online payment mode.
The bank will provide a payment confirmation and close your loan account.
Although both Loan Settlement and Credit Card Loan Settlement aim to provide relief to the borrower, there are some important differences between them.
|
Points of Difference |
Loan Settlement |
Credit Card Loan Settlement |
|
Type |
Settlement of any type of loan (personal, home, car, education, etc.) |
Settlement of Credit Card dues only |
|
Settlement Process |
The bank fixes a lump sum amount, on payment of which the loan gets settled. |
The credit card company settles the amount at a fixed rate. |
|
Impact on CIBIL score |
CIBIL score may drop by 50-100 points, and it may become difficult to get a loan in the future |
There is a huge impact on the CIBIL score, and it may be difficult to get a new credit card. |
|
Possibility of getting a loan in the future |
You may face problems in getting a home loan, a car loan, or any other loan. |
Credit card companies may refuse to issue the card. |
Loan Settlement has a direct and negative impact on your CIBIL score. When a person takes a loan from a bank or NBFC and is unable to repay the entire amount due to some reason, the bank gives him a chance to make a settlement, which is called a Loan Settlement.
However, there is a huge difference between a Loan Settlement and a Loan Closure. If you close your loan by repaying its full amount, it is recorded as "Closed" in your credit report, which improves your CIBIL score. But if you have some amount of the loan waived off under an agreement with the bank, it is reported as "Settled", which can harm your credit score.
When a bank or NBFC reports to CIBIL that your loan is "settled", your score drops immediately. The amount of drop depends on how good your score was earlier.
Banks and financial institutions put customers who have settled their loans in the "high-risk" category. This means that in the future, if you try to take any type of loan (personal, home, car, or education), your application may be rejected.
If you have settled a loan, it may be difficult to get a credit card from any bank in the future. Banks look at your credit history, and if they see a "settled" status, they may refuse to give you a credit card.
Even if a bank decides to give you a loan, you may get the loan at a very high interest rate. This is because banks consider you a risky customer and charge a higher interest rate to protect their money.
Loan settlement information remains in your CIBIL report for at least 7 years. This means that even if you improve your financial behavior later, your settlement record will continue to be visible to banks and may affect your creditworthiness.
If you have settled the loan and now want to improve your CIBIL score, then you can take the steps given below:
Pay all loan and credit card bills in full on time.
If possible, try to change the "Settled" status to "Closed" by contacting the bank.
Use credit cards limitedly and make full payments on time.
Take a small loan and repay it regularly to build a new good credit history.
Check the CIBIL report regularly and request that CIBIL rectify any mistakes.
Let's understand this in simple language:
1. First of all, read our Ahk Tips website or platform carefully
First of all, you should carefully look at our Ahk Tips website, blog, or YouTube channel. Try to know how reliable and useful the information given by us is.
2. Read user reviews and feedback
Nowadays, every good service has some reviews. You can go to Google, Facebook, or YouTube and see other experiences about Ahk Tips. If most people are satisfied and have shared positive experiences, then you can also choose that service.
3. Choose only if it matches your need
Every person's financial situation is different. Therefore, it is important that you see whether Ahk Tips meets your debt problem, EMI burden, credit card, dues or finan, or financial planning-related needs or not. If their suggestions match your situation, then this service may be right for you.
4. Try our suggestions
Some of the tips and plans on Ahk Tips are free for you to follow. You can try their free content first to see if it improves your financial situation. If yes, then you can go ahead and avail other services.
5. Check customer support and response
If Ahk Tips offers any paid service or custom guidance, contact us once and ask how we can help. If we respond on time and understand your problem, and provide a solution, it shows that we are providing a reliable service.
The time taken for the settlement process also depends on various factors, such as the policies of your bank or lender, the outstanding amount, and the communication between the two of you. Usually, this process can take from 1 to 3 months.
The first action in the process of settlement is to approach the bank, where you tell your problem and payment status to the bank. Then, the bank proposes a settlement offer according to your situation. In case you agree with that proposal, you need to pay the amount to the bank within the agreed time. The bank indicates the loan as settled, and this would take some time.
The longer this entire process continues, the more it can impact your CIBIL score, so it is preferable to resolve the issue sooner.
Here we will tell you how loan settlement can be done through Ahk Tips, that too in a very simple language and step-by-step manner.
First of all, Ahk Tips advises you to get complete information about your loan status:
How much loan did you take?
How much have you repaid so far?
What is the outstanding amount?
What is the interest rate?
What are the EMI, and for how long has it been pending?
After this, read the guides or articles related to loan settlement available on Ahk Tips. It is told there:
What is the right time to do a loan settlement?
How to contact a bank or financial institution?
What things do I keep in mind while negotiating?
What documents will be required?
Ahk Tips teaches you negotiation strategies:
Tell the bank that your financial condition is not capable of repaying the loan right now.
You can offer to pay a lump sum amount (settlement amount), which is less than the total outstanding.
You ask for a "Settlement Letter" so that there is no problem in the future.
Ahk Tips teaches you that:
Never give money without written consent.
Keep the settlement offer with you in the form of an email or letter.
Be calm and polite during the negotiation.
If you are also trapped in the debt trap and are facing a financial crisis, and want to adopt the path of loan settlement, then you can apply for our loan settlement service. We will help you settle your loan. Along with this, we provide you relief from the burden of the loan within 6 - 8 months. If you want to get more information about our service, then you can contact us.
Let us understand the difference between them in simple language:
1. Definition
Loan Settlement: It is a mutual agreement between a bank and a borrower. In this, the bank accepts that the borrower cannot repay the entire loan, so it takes a fixed amount and forgives the remaining amount.
Bankruptcy: It is a legal process. When a person or organization is unable to repay its total liabilities, it applies for bankruptcy in the court, and the court decides how its assets will be distributed.
2. Process
Loan Settlement: It is an illegal process that takes place directly between the bank and the customer. No court is involved in this.
Bankruptcy: It is a judicial process in which the court and insolvency professionals are involved.
3. Debt Relief
Loan Settlement: After paying some part of the loan, the rest of the loan can be waived off, but the CIBIL report has a tag of “Settled”.
Bankruptcy: The court decides which loans will be waived off and which will not. This can get rid of the debt completely, but the property can be confiscated.
4. Effect on CIBIL score
Loan Settlement: CIBIL score has a serious negative impact. The tag of “Settled” can become an obstacle in getting a loan in the future.
Bankruptcy: CIBIL score falls completely, and it has a long-term impact.
5. Cost & Time
Loan Settlement: This process is completed quickly, and there are no legal expenses.
Bankruptcy: This can be a long and expensive process, which requires lawyers and professionals.
It has the following advantages and disadvantages:
Advantages
Loan Settlement improves the financial condition of the borrower.
By doing a Loan Settlement, you can manage your income and costs better and avoid a financial crisis in the future.
The heavy burden of debt often causes mental stress. With Loan Settlement, the borrower gets relief from this stress, and he can find mental peace in his life.
Through Loan Settlement, the borrower gets a chance to get part of their debt waived off.
This helps to improve his financial condition and gives him relief from a heavy financial burden.
Although a Loan Settlement can affect the borrower's credit score, by following the agreement on time and properly, he can gradually improve his credit score.
Disadvantages
In the future, the borrower may face difficulties obtaining loans from these institutions.
Through Loan Settlement, the entire loan of the borrower is not waived off. He still has to pay some amount, which can affect his financial condition.
During a Loan Settlement, the agreement between the bank and the borrower has many conditions. The borrower is required to follow these conditions, which can limit their freedom.
After a Loan Settlement, the borrower's credit score may be affected.
Loan Settlements may create difficulties in taking new loans or obtaining credit cards in the future.
Due to a Loan Settlement, the borrower's relationship with the bank and other financial institutions may deteriorate.
Below, we will know in detail how this can be done.
1. First, contact the bank
When the loan is declared as NPA, the borrower should first contact their bank or financial institution directly.
Instead of getting scared, talk.
Tell the bank about your financial situation.
Tell them that you want to repay the loan but cannot make the full payment in the current situation.
2. Ask for an OTS (One-Time Settlement) proposal
Banks often bring the OTS scheme for NPA accounts, in which
Some amount is waived,
The remaining amount has to be paid in a lump sum or installments.
3. Take the settlement deal in writing (Settlement Letter/NOC)
If the bank accepts your settlement proposal, then:
Take a written settlement letter from them.
After completing the payment, do not forget to take the NOC (No Objection Certificate).
This will serve as proof for you in the future.
4. Understand the impact on CIBIL score
The settlement of an NPA loan affects your CIBIL score.
Your score may fall for some time.
But by paying other bills/credit cards/EMIs on time, you can improve the score again.
5. Avoid default again in the future
Do financial planning.
Take a loan only as per your need.
Pay installments on time.
Spend according to your budget.
Loan disputes can cause mental, financial, and social stress for any common man. But if you are an aware consumer, then you need to know that the Consumer Court is a powerful medium to protect your rights. When a bank or financial institution is negligent in its services, behaves unfairly, or harms you by giving wrong information, then you can get justice by filing a complaint in the Consumer Court.
The process of filing a complaint is easy –I Ifirstt contact the bank, then go to the consumer forum if there is no solution. Whether the complaint is small or big, if your point is right and you have evidence, then you can get proper compensation and a solution from the Consumer Court.
So, if you are troubled by a loan dispute, do not keep quiet. Raise your voice for your rights, and take the help of the law. Consumer Court is with you – to get fast, cheap, and effective justice.
Que: What is Ahk Tips?
Ans: Ahk Tips is a digital platform that provides information and guidance related to debt relief, loan settlement, financial planning, and credit score improvement.
Que: Is Ahk Tips a bank or financial company?
Ans: No, Ahk Tips is not a bank or loan company. It is just a guidance and educational platform that helps you make the right financial decisions and get rid of debt.
Que: Can loan settlement be done through Ahk Tips?
Ans: Yes, loan settlement can be done through Ahk Tip. Ahk Tips explains the entire process of loan settlement to you and tells you the strategy to negotiate with the bank so that you can also settle the loan yourself.
Que: Does loan settlement affect the CIBIL score?
Ans: Yes, Loan Settlement can affect your CIBIL score as the bank reports it in "Settled" status, which can cause problems in taking loans in the future.
Que: Is it free to use Ahk Tips?
Ans: Most of the information is available for free on Ahk Tips, like blog posts, guides, and YouTube videos. But some special services are paid for. Such as services of Loan Settlement, Credit Card Settlement, Business Loan Settlement, etc.
Founded in 2015, Ahk Tips is a New Delhi-based financial advisor specializing in debt relief and loan management solutions.
