Okay, so you want to take that housing loan/car loan/personal loan or even a business loan for your own/partnership company. You complete all the formalities, submit all the papers and wait for it in anticipation.and there comes that whopper. Your credit history is not satisfactory.
This is a situation you are most likely to face if you have applied for a loan/credit facility with Standard Chartered Bank, and you have/had a PL/credit card with SCB.
This is how it works. People who have used a credit card will come across some sort of additional charges/interest that has been charged to their account at some point of time or the other. You contest this charge and refuse to pay it, which you are completely in the right to do.
The bank agrees to look into it, and drags its feet for months, even years. Meanwhile, the unpaid charges attract interest, and interest on interest and accumulate to a sizeable sum. Frustrated, you finally choose to close the card and tell the bank that you are not going to pay up the disputed charges and the interest thereof, and they need to waive it off. Numerous discussions and dilly dallying later, the bank offers a settlement to you, and you take it, glad to be out of the mess. You are so glad to be out, that you don’t even bother to take the settlement letter and the NOC.
Dear Sir, YOU HAVE BEEN CONNED!
The bank promptly reports you to CIBIL, which is the database of defaulters, though it contains the data of anyone and everyone that the banks care to report. The next time you apply for a loan, the bank checks your details with CIBIL, and out pops your name. "You have not paid the overdue interest charges and interest thereof and interest thereof. for an amount of Rs.15, 000!" You want the loan? Pay up!
This is not fiction. I’ve been on the lending side of business at StanC and have seen this happen to numerous customers who come to us for business loans. The Credit Card team refuses to clear the name of the customer till such time he pays up the complete amount, even though they would be the ones who did the waiver in the first place. The business teams cannot go ahead with the credit proposal till such time they receive the okay from the cards team. Caught in between is the hapless customer.
So, the next time you go for a settlement with the bank, here’s what you need to do.
*Ask for a provisional settlement letter in writing, which details out the amount that needs to be paid. The bank will specify a date by which this amount needs to be paid, failing which the settlement is invalid.
Obtain a proof of payment of this amount, either by way of receipt issued by the bank, or by way of your bank statement which shows the cheque being cleared from your account. Preferably both.
Keep them together in safe custody.
*The next time the bank says that you have defaulted and that you need to pay up additional amount, show them the letter and proof of payment. Most likely, they will relent. Else, you have enough proof to take them to court.