To reply to your query, can a personal loan be written off? The answer is NO. A write-off refers to when a lender or bank decides a loan is unlikely to be recovered and removes it from their books as a bad debt. Usually, a personal loan cannot be written off by the borrower in the sense of being forgiven.
Is It Possible to Write Off a Personal Loan?
Crucially, writing off a loan does not cancel your liability to repay. The debt remains legally binding. The lender may still attempt recovery, seize collateral (if any), or pursue legal action.
In contrast, a “waive-off” (or loan forgiveness) means the lender formally gives up the right to recover the loan. Here, the borrower is free from repayment. That’s rare and usually happens only under special circumstances (e.g., government-backed relief and natural disaster aid).
To clean up the lender’s balance sheet, if a loan becomes a Non-Performing Asset (NPA), writing it off removes it from “live” asset listings.
To reduce their tax burden or meet accounting regulations, it helps reflect a more realistic financial position.
Only when the lender decides to forgive the debt (full or partial), often under special hardship-relief schemes, natural disasters, or government policies. This is not common for typical personal loans and requires exceptional circumstances. As a result, your credit score will suffer greatly, making it more difficult for you to get future credit cards or loans.
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Can a Personal Loan be Written Off?
priya
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2025-11-27T06:50:22+00:00 2025-11-27T06:50:25+00:00Comment
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