What is Loan Closure?
Loan Closure (also called Loan Repayment Closure or Full Loan Repayment) means you’ve paid off your loan entirely as per the agreed terms either by completing all EMIs or pre-paying the outstanding balance. In simple terms, you’ve cleared your debt completely and ended the loan responsibly.
Types of Loan Closure
Regular Closure
Pre-Closure
Documents You Receive After Loan Closure
Once your loan is successfully closed, the lender provides:
No Dues Certificate (NDC) confirming zero outstanding balance.
Loan Closure Letter as official proof.
Release of Collateral (for secured loans such as car or home loans).
Update to Credit Bureau (CIBIL, Experian) marking the loan as “Closed.”
Why Loan Closure is Important
Improves your credit score.
Reflects responsible repayment behavior.
Helps you qualify easily for future loans.
Prevents your name from being marked as a defaulter.
In short, Loan Closure is a positive conclusion to your credit journey and improves your financial credibility.
At Capital Now , we take zero loan closure charges:
No hidden fees or penalties for loan closure.
No foreclosure or pre-closure charges at any stage.
100% transparent loan process with zero extra costs.
Close your loan anytime quickly and hassle-free.
Designed to help you achieve true financial freedom with confidence.
What is Loan Settlement?
Loan Settlement happens when a borrower cannot repay the full loan amount due to financial hardship and negotiates with the lender to pay a smaller one-time amount as “settlement.” The lender agrees to accept less than what’s due and marks the loan as Settled instead of Closed.
Example of Loan Settlement
If you owe ₹3 lakh but due to job loss or medical issues can only pay ₹1.5 lakh, and the lender accepts ₹1.5 lakh as full and final payment, your loan is marked as “Settled.”
Key Points About Loan Settlement
The lender writes off the unpaid balance as a loss.
Your credit report shows “Settled” instead of “Closed.”
The settled tag stays on your CIBIL report for up to 7 years.
Impact on Credit Score
Immediate drop in credit score (by 75–150 points).
Difficulty in getting future loans approved.
Higher interest rates even if your loan gets approved.
In short, Loan Settlement provides temporary relief but damages your long-term creditworthiness.
When Should You Consider Loan Settlement?
Only choose loan settlement as a last Option, when:
You face extreme financial hardship (job loss, illness, etc.).
You’ve exhausted all other repayment options.
You’ve tried loan restructuring or tenure extension but still can’t repay.
Tip: Always try to negotiate for restructuring instead of settlement it helps protect your credit record.
How to Close Your Loan Properly
Only choose loan settlement as a last Option, when:
Pay all remaining dues or the pre-closure amount.
Request a No Dues Certificate (NOC) from your lender.
Collect a Loan Closure Letter as proof.
Check your CIBIL report for “Closed” status.
Stop auto-debit instructions to avoid future deductions.
Proper loan closure ensures your financial reputation remains strong and your credit report stays clean.
Which One Should You Choose?
If you can afford repayment, always choose Loan Closure.Use Loan Settlement only if repayment is absolutely impossible.
Loan Closure = Financial discipline + Better credit future
Loan Settlement = Temporary relief + Long-term credit damage
How Capital Now Helps You
At Capital Now, we believe in empowering borrowers with smart financial decisions. Whether you’re planning to close your existing loan or exploring new personal loan options, our platform helps you:
Understand your repayment options clearly.
Compare loan offers based on your credit score and income.
Apply instantly for the best-suited personal loan.
Manage EMIs efficiently through an easy-to-use dashboard.
Download Capital Now Here: Here