Settlement closes a loan for a reduced amount; restructuring keeps it open but makes repayment manageable. Choosing the right one depends on whether you can realistically repay over time.
What restructuring changes
Restructuring reworks your repayment terms — extending the tenure, lowering instalments, or granting a moratorium — so the loan fits your income cycle. The debt remains, but on gentler terms.
It suits farmers whose difficulty is temporary and who expect income to recover.
When settlement makes more sense
If the debt is beyond realistic repayment even on revised terms, a One Time Settlement to close the account may be the healthier long-term choice.
The decision hinges on a candid look at future cash flow.
Frequently asked questions
Is restructuring better for my credit record than settlement?
Generally yes, because the loan continues on revised terms rather than being marked 'settled'. But it only helps if you can meet the new schedule.
Can I restructure more than once?
Sometimes, but repeated restructuring is at the bank's discretion and may not be offered if earlier revised terms were not met.