Difference between write off and waiver

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Today, the majority of people make use of the terms ‘loan write off‘ or ‘loan waive off’ which are contradictory concepts of dealing with bad loans. Although these two sound similar, there are quite a few differences in the standard concepts.

What is meant by the term ‘Loan write-off’?

It is defined as the amount of loan that is written off by financial institutions. This is a usual practice implemented by banks to clean the balance sheet and obtain tax efficiency. Even though banks write off the unpaid amount, he/she is still bound to repay the dues. There are several instances during which banks write off the loan amount and retrieve the accounts after a long duration. 

Multiple industrialists have fled the country with a huge sum of money without repaying it. In such a situation, the concerned banks choose numerous ways to recover the loan amount like delivering a legal notice or approaching his/her relatives. If still not able to collect the amount, they expect to recover the loan amount once the defaulter returns to their country.


The purpose behind writing off the bad loan by the bank is to leverage funds allocated during the point at which money was granted to its borrowers to commence business.

What is meant by the term ‘Loan waive off’?

 There are circumstances during which an individual is unable to repay the amount owing to the financial crisis. For instance, cultivators procure a loan for harvesting crops but struggle to manage expenses especially due to extreme climatic conditions thereby not being able to repay the loan amount. In this case, the concerned Government might waive off the loans but such action is taken only after conducting an inquiry to avert fraudulent activities.


Apart from farmers, people belonging to various job categories could plead for a loan waiver unless there is a logical reason to support it. The government will go through the situation and consider waive off the loan if it complies with the terms and conditions. 

The primary difference between Write off and Waive off

A loan write-off is an action undertaken by the lender where chances of recovering the loan amount are remote while the bank prefers to preserve a clear record of the unrecovered loan amount in the balance sheets. In the case of loan write-off, any collateral security attached against the loan will be seized by the concerned bank if the loan amount is not repaid within a stipulated time.


On the contrary, a loan waive-off can be provided to the borrowers by the government wherein the borrower is not bound to repay the loan amount to the concerned lender due to logical reasons. But the fact is that the lender does have the right to recover the loan amount in the future since it is deemed a write-off instead of a waiver.


Loan waiver is defined as revoke of loan recovery Loan write-off is defined as a non-performing asset wherein chances of recovering a loan are remote. It does not imply complete cancellation of cash
Loan waiver is offered by Government to farmers in extreme circumstances like natural calamities It is performed by concerned banks to attain tax efficiency.
Loan waiver is an inability of an individual to repay the loan amount owing to the financial crisis. The government waives off loan amount availed by cultivators. Loan write-off does not involve any future value

Advantages of loan waiver

A loan waiver proves beneficial for the farmers since it narrows down the gap between has and have knots in an effective manner. For instance, many farmers are provided an agricultural gold loan at an attractive rate of interest. In addition, they are not required to submit supporting documents 

Disadvantages of farm loan waivers

  • As the farm loans have been waived off for the past few decades, farmers are constantly pressurizing the government to agree to their demands put forward.
  • One of the major issues about loan waivers is that they encourage irresponsible behavior. 
  • Most of the cultivators are utilizing farm loans for non-agricultural purposes.
  • When the farmers are unable to repay the loan amount, they seek the help of political leaders to get the loans waived.
  • If the farmers are not able to pay back the loan amount, the concerned government should come forward and execute the payments.
  • Another critical problem is that the government itself does not have adequate funds in the treasury. They are borrowing money from some of the prominent financiers. It would add to the national debt and must be repaid-with interest.


If you are struggling to deal with the financial crisis, then you may consider approaching Money View that would assist you in clearing debts and managing funds. They are currently one of the leading financial institutions that provide loan amounts at an attractive rate of interest and flexible repayment tenure.