Write Off vs. Waive Off

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Most people tend to use the terms ‘loan write-off’ or ‘loan waive-off’ interchangeably. Even though both sound similar and deal with bad loans, there are some distinctive differences in the basic concepts.

What is a Loan Write-Off?

If you are not sure of the actual loan write off meaning, then it can be simply put as the amount of loan that is written off by the banks. However, the bank does not clear out the complete loan amount from its books nor does it in any way imply that the bank will limit its efforts to recover it in the future.

The primary objective behind the bank writing off a bad loan is to make use of the funds allocated originally at the time of lending the money to its borrowers to initiate more business. By writing off the loan from its books makes the balance sheet more presentable to its stakeholders. Generally, banks take the call to write off a bad loan when the window of recovering the loan has dramatically dropped and they have to start using the attached assets of the defaulter or arbitration to recover their dues.

What is a Loan Waiver-off?

Loan waive-offs are an offshoot of circumstances under which the borrower is unable to repay the loan amount as a result of financial setbacks. The government may decide to offer such borrowers a loan waive off vs write off only after having conducted a thorough investigation to establish that the borrower was genuinely unable to service the loan repayments due to a lack of earnings. For instance, when farmers are unable to repay loans after a bad year, the government may take a call to waive off their outstanding loans.

The borrower qualifies for financial support by only meeting specific terms and conditions under which the loan waive-off is granted. However, from the lender’s perspective, the unrecovered loan as a result of the waive-off amount cannot be left out of its records. Therefore, in order to balance its books, the banks denote such waive-offs as a loan write-off which leaves the door open to recover it at a future date.

Difference Between “Write-off” and “Waive Off” of Loans

The primary difference between write off and waive off of loans is that a loan write-off is an action taken by the lender when the chances of loan recovery are almost zero and the bank wishes to maintain a clear record of the unrecovered loan amount in their balance sheets.

On the other hand, a loan waive-off can only be offered to borrowers by the government where the borrower is no longer under the burden of paying back the loan amount to the lender as a result of a genuine change in their financial circumstances. Even though the government may provide this waive-off, the lender may still be able to recover the pending loan amount at a future date as it identifies the loan as a write-off and not a waiver.

If you too are in need of financial assistance, then a personal loan from SMFG India Credit can help to meet your immediate monetary obligations.

*Loan Write-Off*	*Loan Waive-Off*
Loan write-off refers to the situation when the lender has moved a particular loan’s pending dues out of the “Assets” column and has reported this amount as a loss. This happens after the borrower has defaulted on the loan repayment, and there is a low chance of recovery.	When a loan account is removed from the system upon cancellation, the process is called loan waive-off. The borrower is no longer under any debt.
Lending institutions carry out the practice on their own.	Lenders perform loan waive-off with the government’s support.
Lenders can use legal entities to recover the loan amount since the account isn’t permanently closed. Write-off is usually done after arbitration proceedings have been concluded.	In Loan-waive off, the lender performs no legal action against the borrower to recover the loan.
Loan write-off is a lawful process to minimize tax liabilities processed by lenders.	The government provides mainly to farmers who suffer from natural calamities.

How To Apply?

Follow these steps to apply for a personal loan from SMFG India Credit:

Initiate the loan application through this link.
Enter primary information such as your mobile number, PAN, pincode, and type of employment.
Confirm mobile number with OTP and ensure email ID verification.
Provide more details like email address, birth date, gender, income, and employment record.
Assess the loan conditions that will highlight the total amount, fees, and repayment plan. Upon satisfaction, confirm your acceptance. You will get an option to choose a greater loan amount.
Provide the specifics of employment for salaried roles.
Complete digital verification for identity and address using the recognised methods of CKYC, OKYC, or DigiLocker.
Supply bank details for our verification. After this, you will be directed to add some more details like the loan purpose in the ‘Additional Details’ section.
Choose the payment approach you prefer and set up eNACH.
Review the loan agreement, sign it digitally, and secure it with an OTP.

These simple steps will guide you closer to your financial goals.

If you have any questions, you can reach out to our friendly SMFG India Credit customer care department on the toll free number (1800 103 6001) or email us at .

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* Please note that this article is for your knowledge only. Loans are disbursed at the sole discretion of SMFG India Credit. Final approval, loan terms, disbursal process, foreclosure charges and foreclosure process will be subject to SMFG India Credit's policy at the time of loan application. If you wish to know more about our products and services, please contact us