Dairy Loan OTS — One Time Settlement Process

6 min read

One Time Settlement lets a dairy farmer close a stressed loan for a reduced, agreed lump sum. Here is how it works and how to prepare.

How dairy loan OTS works

In an OTS, the bank agrees to accept a reduced amount to fully close the account. The reduction typically covers part of the accrued interest and penalties rather than the core principal.

The offer, amount, and timeline are decided by the bank. A well-documented hardship case and a credible repayment source improve your position.

Documents and steps

Gather loan statements, notices received, proof of hardship (cattle loss, disease, price collapse), and identity documents. Submit a written settlement request and negotiate the terms in writing.

Frequently asked questions

How much reduction can I expect in a dairy loan OTS?

There is no fixed figure — it depends entirely on the bank's policy, your account status, and hardship. Reductions usually apply to interest and penalties.

Do I need to pay the OTS amount in one payment?

OTS is usually a lump sum, though some banks allow a short window or a few instalments. Confirm the terms in writing.

Any settlement, restructuring, or waiver outcome is decided solely by the respective bank or financial institution. This guide is educational and does not guarantee approval.

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