Write Off vs. Waive Off

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.

How To Apply?

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

1. Provide Some Initial Details

Enter primary information such as your mobile number, PAN, pincode, and type of employment (salaried or self-employed).

2. Confirm Your Mobile Number

Authenticate your contact number with the OTP sent to your device.

3. Share More Details

Provide information such as your email address, date of birth, gender, and annual income. Also, don’t miss out on verifying your email ID.

4. Submit Employment Information

Provide the specifics of employment for salaried roles.

5. Provide Your Bank Statement

Please upload your bank statement or provide it via Net Banking or an Account Aggregator. The submitted details will help us generate a loan offer (applicable for salaried individuals only).

6. Proceed With Identity Verification

Complete digital verification for identity and provide address information using the recognised methods of CKYC, Offline Aadhaar XML-based KYC, or DigiLocker. Don’t forget to take a selfie to complete identity verification.

7. Add Banking Account Details

Supply bank details for our verification.

8. Provide Additional Information

After bank account verification, you will be directed to add some more details like the loan purpose and marital status in the ‘Additional Details’ section.

9. Set Up Re-payment Preferences and E-NACH

Choose the re-payment approach you prefer (debit card or internet banking) and set up E-NACH.

10. Sign the Loan Agreement Digitally

Review the loan agreement, sign it digitally, and validate 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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