Settlement (सेटलमेंट (समझौता चुकौती))
Settlement means the lender accepts less than the full amount due and closes the account, reporting it to bureaus as "settled" rather than "closed". It stops collection pressure but scars your credit report for years, making future loans harder and costlier.
Worked example
On a ₹50,000 defaulted loan the lender accepts ₹30,000 as full and final. You save ₹20,000 today, but the "settled" flag can block most formal credit until you rebuild — where possible, pay the remainder later and get the status updated to "closed".