For personal loans and credit cards, no law sets the percentage. Here is what really decides it, and how to work out an offer you can keep.
Estimate Your SettlementUnder RBI's 2023 framework for compromise settlements, regulated lenders need a board-approved policy, including the limits on the sacrifice they may accept. A settlement is a negotiated agreement, so a borrower has no right to a set discount and the lender is free to refuse.
Percentages quoted online, including averages, describe past cases at best. They cannot tell you what your lender will accept on your account.
Take an account with ₹4,00,000 of principal and ₹6,00,000 of total outstanding after interest and penalties. The same percentage produces very different payments. This table is only arithmetic, not a prediction of what any lender will accept.
| You pay | If measured on principal | If measured on outstanding |
|---|---|---|
| 30% | ₹1,20,000 | ₹1,80,000 |
| 40% | ₹1,60,000 | ₹2,40,000 |
| 50% | ₹2,00,000 | ₹3,00,000 |
| 60% | ₹2,40,000 | ₹3,60,000 |
| 70% | ₹2,80,000 | ₹4,20,000 |
Older unpaid accounts generally leave more room to negotiate than recent ones.
Lenders have less to fall back on with personal loans and credit cards than with home or car loans.
Job loss, medical costs or business failure, shown in documents, carries more weight than a verbal request.
A lender may compare your offer with what it could realistically recover through other means.
Money paid quickly is generally more attractive to a lender than a long plan.
Each lender works within its board-approved policy and approval levels.
Pending arbitration, court action or a Lok Adalat listing can change how talks proceed.
For a starting estimate, use our settlement amount calculator. If you have received an offer, compare it using the table above, and read how to check a settlement letter before paying.
These guides cover how settlement talks work with specific lenders. Any range mentioned is a guide, not a promise.
Also understand what happens next. A settled account can lower your score, so read about the effect on your CIBIL score first.
There is no fixed percentage. RBI requires each lender to follow its own board-approved policy, so the figure depends on the lender, how old the default is, whether the loan is secured, and the hardship you can prove.
Credit cards have no standard percentage either. Check whether a quoted figure is measured against the principal or the total outstanding, because card dues often include large interest and late fees.
No. RBI's 2023 framework for compromise settlements requires lenders to have board-approved policies, including limits on the sacrifice they may accept. It does not give borrowers a set percentage.
Do not plan around it. Very low figures are rare and cannot be promised. Treat anyone guaranteeing a specific percentage before reviewing your account and lender with caution.
It can be either, and the difference is large. Always ask for a written breakup of principal, interest, penalties and other charges, and compare offers in rupees rather than percentages.
Secured loans are different, because the lender can look to the property or vehicle for recovery. Reductions are usually more limited than on unsecured personal loans and credit cards.
Lenders generally prefer a lump sum, and it can strengthen your offer. Instalments may be possible, but missing one can cancel the settlement, so agree only to dates you can meet.
When you pay less than the full amount, the account is commonly reported as settled, which can lower your score and affect future borrowing, whatever percentage you achieved.
This page is general information, not legal advice on your specific case. Last updated 10 November 2026.
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