Debt relief options in India compared
Restructuring, settlement, consolidation and the legal routes, side by side.
The table compares the main ways a borrower in India can deal with debts that cannot be repaid as agreed. They differ in what you pay, how your credit report shows the outcome, and who decides. The table compares types of options, not specific lenders. Which options you have depends on your lender's board-approved policies, whether the debt is secured and how far overdue it is. Read across a row before choosing, and see the overview guide for detail.
Select a column header to sort.
| Option | How it works | Good for | Watch out for |
|---|---|---|---|
| Revised EMI date or short relief | Lender moves the EMI date or allows a short gap under its policy | Temporary cash-flow gaps, such as delayed salary | Interest keeps running; the gap may still be reported if dues fall overdue |
| Restructuring / rescheduling | Dues converted into a new schedule, usually longer tenure and lower EMI | Income has fallen but you can repay in full over time | Higher total interest; the account may be reported as restructured; lender is not obliged to agree |
| Debt consolidation loan | A new, cheaper loan pays off several costly debts | Several high-rate cards or app loans while your record is still clean | Fees, a longer tenure and new card spending can wipe out the saving; hard to get once overdue |
| One-time settlement (OTS) | You pay a negotiated amount below total dues; lender waives the rest | Debts you genuinely cannot repay in full, usually after long overdue | Credit report shows 'settled'; cooling period of at least 12 months before the same lender lends again; get it in writing |
| Lok Adalat settlement | Settlement recorded before a Lok Adalat, often at pre-litigation stage | Bank recovery cases where both sides want a quick, final settlement | The award is final and binding with no appeal; read the terms before signing |
| Defending recovery (DRT, civil court, arbitration) | You contest the amount, charges or procedure before the forum | Wrong calculation, illegal charges or procedural lapses | Costs and time; deadlines are strict; get legal advice |
| SARFAESI redemption | Pay secured dues before the auction notice is published to keep the asset | Home or property loans facing enforcement | 60-day demand notice; after possession, timelines are short; challenge goes to the DRT |
| IBC Part III (personal guarantors) | Insolvency resolution or bankruptcy for personal guarantors to companies before the NCLT | Promoters and directors who guaranteed company loans | Not open to ordinary salaried borrowers in 2026; since 26 May 2026 no interim moratorium for guarantors |
| Old insolvency Acts (individuals) | Insolvency petition under the Provincial Insolvency Act, 1920 or Presidency Towns Insolvency Act, 1909 | Rare cases of overwhelming debt with no other route | Slow court process with serious consequences; take legal advice first |
Rules for settlement, restructuring and recovery come from the Reserve Bank of India's directions for banks and NBFCs, including the compromise settlement framework of 8 June 2023, now part of the 2025 Master Directions. Check the current text on the RBI website. IBC notifications and regulations are on the IBBI website and the e-Gazette. For free legal advice, contact NALSA (helpline 15100) or your District Legal Services Authority. Figures in this site are illustrative.