AU Small Finance Bank is a major player in the Indian banking sector, widely used by small business owners, transporters, and individuals for vehicle and personal loans. However, economic downturns, business losses, or personal emergencies can disrupt your repayment schedule.
Defaulting on an AU Bank loan can be particularly stressful because of their aggressive approach towards vehicle repossession and arbitration proceedings. Ignoring the problem often leads to the bank seizing your commercial vehicle (your livelihood) or obtaining a legal award against you.
At AMA Legal Solutions, we understand the stakes. We specialize in negotiating with AU Small Finance Bank to stop vehicle seizure, handle arbitration notices, and secure a One Time Settlement (OTS). We aim to protect your assets and help you close the debt legally and affordably.
Commercial (Trucks, Taxis) or personal cars. We intervene to prevent seizure or negotiate release if already seized, followed by a settlement.
Unsecured personal loans taken for medical, wedding, or other needs. We help reduce the burden of high interest and late fees.
MSME or working capital loans. If your business is down, we help you close the loan without losing your collateral (if any) through strategic negotiation.
OTS is a legal provision where the bank agrees to accept a lump sum payment lower than the total outstanding amount to close the loan account permanently. This is usually offered to borrowers who have genuinely defaulted and cannot pay the full amount.
The bank waives off the accumulated penal interest and late fees, significantly reducing the burden.
All legal proceedings, including cheque bounce cases and arbitration, are withdrawn upon settlement.
For secured loans, settlement prevents the bank from auctioning your property or vehicle.
Your loan account must be classified as a Non-Performing Asset (NPA), usually after 90 days of non-payment.
You must demonstrate a genuine inability to pay due to reasons like job loss, business failure, or health crisis.
Personal loans and credit card debts are easier to settle as they are unsecured.
For vehicle loans, if the vehicle value is less than the loan outstanding, settlement is a viable option.
We analyze your loan details, outstanding amount, and financial status.
We inform AU Bank that we are representing you, stopping direct harassment.
We draft and submit a formal settlement proposal highlighting your hardship.
Our experts negotiate with the bank's credit team for the maximum possible waiver.
Once approved, you receive a formal settlement letter. You pay, and the loan is closed.
As a borrower, you have specific rights protected by RBI guidelines.
Recovery agents cannot use abusive language, threaten you, or call at odd hours (before 7 AM or after 7 PM).
For vehicle repossession, the bank must follow a legal process and cannot simply snatch your vehicle by force.
AU Bank frequently uses arbitration clauses. This means a private judge (Arbitrator) is appointed to decide the case. Do not ignore this. An arbitration award is as powerful as a court decree.
If your EMI cheque or NACH bounces, they may file a criminal case under Section 138. This is a bailable offense but requires immediate legal attention to avoid an arrest warrant.
For vehicle loans, they may send agents to seize your vehicle. While they have rights, they must follow due process. We help you negotiate to stop the sale of your vehicle.
Settling a loan will reflect as "Settled" in your credit report, which does impact your score. However, it is far better than a "Written Off" or "Willful Default" status. A settled status stops the monthly negative reporting, allowing you to eventually rebuild your creditworthiness.
We have a specialized legal team to represent you in arbitration proceedings initiated by AU Bank, ensuring your side is heard.
We know the legal tactics to delay or prevent vehicle auctions, giving you time to arrange for a settlement.
We deal directly with the bank's regional and central settlement teams to get you the best possible waiver on interest and penalties.
"I had a commercial vehicle loan with AU Bank. Due to lack of business, I couldn't pay. They were about to seize my truck. AMA Legal Solutions helped me settle the loan and save my livelihood."
Ramesh Singh
Transporter, Delhi
"My personal loan EMI was bouncing, and the harassment was unbearable. AMA Legal Solutions took over the communication and settled the loan for 40% less."
Priya Sharma
Teacher, Jaipur
Common queries about settling loans with AU Small Finance Bank
Our loan settlement services are available across all states and union territories in India