We all know that managing the debt is not an easy task, especially when things get worse. HDFC Bank credit card users can settle their outstanding debt. The settlement can be made under specific circumstances, and this guide will explain in detail how to do it and the whole process.
Credit card loan settlement entitles you to the settlement to pay off a lesser portion of your dues. This generally comes into the picture for financially troubled people who cannot make any regular payments.
Once you accept a settlement, the credit card company, which in this case is HDFC Bank, will accept a payment that is smaller than the whole amount due on your account so that it may close the account.
Before approaching HDFC Bank for settlement, it is very important to evaluate your current financial status. Calculate your monthly income, expenses, and total debt to understand what you can realistically offer for settlement. Knowing your financial capacity also helps you negotiate more effectively.
First, contact HDFC Bank credit card customer care. It’s best to address your request directly to the officials concerned for proper consideration. You may call their customer care helpline number at 1860 267 6161 or 1800 202 6161 to intimate them about your proposal to settle your dues.
Be honest and transparent with HDFC Bank regarding your situation. Financial hardship is the primary reason banks consider settlement requests. Explain why you cannot continue making payments and how settling the account can help you get back on your feet.
Once HDFC Bank understands your situation, they may present a settlement offer or ask you for your proposed amount. Banks are generally open to negotiation, especially if you offer a reasonable amount based on your financial capacity. Settlement offers can be anywhere from 20% to 40% of the total outstanding balance, depending on the circumstances.
Once a settlement amount is agreed upon, request HDFC Bank for a written agreement. A written agreement received from HDFC Bank stating the agreed amount, mode of payment, due date, and promised up-date of your credit report to “settled” status will help with legal reinforcement to bind both parties to fulfillment of the terms of settlement.
Once you receive the written agreement, pay as per terms. Pay in time to avoid complications and to be sure of not losing your integrity. And when you fail to pay in time, it could make your settlement agreement invalid; full amount payable again.
HDFC Bank usually updates the status in your credit report to “settled” after settlement. However, checking the status usually takes a few weeks in most cases and is left to the discretion of the credit reporting bureau.
While settling a credit card debt may help alleviate financial burden, it does negatively affect your credit score. The “settled” status tells lenders that you did not pay the debt in full, which may affect your ability to get credit in the future. Settled accounts generally stay on your credit report for up to seven years.
Before settling, think about other alternatives that can affect your credit less. There are some alternatives including balance transfer, debt consolidation, or consulting with a financial advisor for budgeting.
Paying off HDFC credit card debt can be very relieving if one cannot pay the monthly installments. However, the person should know both the advantages and disadvantages of the settlement process. The above steps will help you settle an HDFC bank credit card as per your convenience right from starting the conversation with HDFC Bank to ensuring that the status on your credit report reflects all terms correctly. It doesn’t affect your credit score while settling a debt, but taking proactive measures to rebuild credit does help you get financial stability over time.
Que: Can I negotiate my settlement amount with HDFC Bank?
Ans: Yes, HDFC Bank typically allows negotiation based on your financial hardship and payment capacity.
Que: Will my credit score improve immediately after settlement?
Ans: No, while settling the debt will stop interest accumulation, it won’t immediately improve your score. It may take time and positive repayment history on other accounts.
Que: Can I apply for another HDFC credit card after settling the debt?
Ans: While you can reapply, approval depends on your credit history and financial status. The “settled” status may impact the likelihood of approval.
Que: How long does the “settled” status remain on my credit report?
Ans: It typically stays on your report for up to seven years, which can impact creditworthiness.
Founded in 2015, Ahk Tips is a New Delhi-based financial advisor specializing in debt relief and loan management solutions.
