Consequences of one-time settlement scheme has advantages and disadvantages as well.. Whoever doesn’t know about one time settlement (OTS) in banking term, here is the answer for you. When you take education or any other loan from banks and when you are not able to repay that amount with interest. Bank sends notice to remind you to repay the loan amount. Due to some reasons you will not able to pay the loan amount, then the bank will give you option to repay that amount that is called ots. You are going to pay only principal and some extra amount to the bank. After paying that amount you will get a no objection certificate from the branch.
If your branch manager gives you this option, please do not go for that. It is not beneficial for bank, though they desire to get at least principal amount from their customers than losing the (Principal) amount. When you repay the loan amount with interest, bank will trust you and will assist you for further personal needs. Losing trust is easier than gaining it, so be a trustworthy. There are many consequences of one-time settlement scheme that makes people to regret to opt for this scheme later.
There are some repercussions after paying loan amount through one time settlement.
Consequences of ots
1. You will never get any loan from that bank is one of the consequences of one-time settlement scheme:
Bank never trusts you again to give loan. It will affect for your future. People are taking loans from bank to develop their businesses.
2. Credit score affects because of one time settlement is also a consequence of one-time settlement scheme:
Nowadays credit score is significant for everything. When you do one time settlement, it will affect your credit score. It will be in your credit report forever and it impacts negatively to the borrowers. Financial institutions can see your report and decide not to provide any loan to you.
3. Impact for abroad studies:
If you wish to study abroad with the help of abroad education loan, you will not get a loan in any bank. Banks will deny to sanctioning a loan due to onetime settlement. Dream study abroad will be dream itself, if you do not clear the loan amount.
4. You will not get Gold loan from that bank:
In this contemporary era banks also using advanced technologies to develop their services to their customers. Life is unpredictable and arise many uncertainties in human life, so if you wish to take a loan in the same bank by pledging gold or ornaments, you will not get that loan as well, system itself not allow to make any entries of yours.
5. Hard to get Credit card:
Credit card companies provide better discounts and reward points. When you apply for credit card, it will get rejected. And credit card applications affects credit score. It depicts that how desperate you are to take loans. If you wish to have credit card, you have to deposit some amount after that you can get one.
Banks help students to build their Career and make them knowledgeable person in society. It is student’s responsibility to repay the loan amount with interest. It will helpful to others and bank also trusts them. If a student doesn’t repay the loan amount then will affect other bright students.
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