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COVID-19 brought in its wake one of the gravest economic crises Indians have ever witnessed. And loan borrowers had to face the worst of it, as they had to manage their EMIs<\/a> alongside a cash shortage.<\/p>\n\n\n\n Many borrowers face such financial pressure due to different emergencies and situations in their lives. Fortunately, the RBI offers a loan restructuring scheme that helps borrowers sail through their EMI payments till they overcome their financial challenges.<\/p>\n\n\n\n If you\u2019re a long-time Tata Capital<\/a> customer with a loan that you\u2019d like to restructure, here is all the information you need.<\/p>\n\n\n\n What is loan restructuring?<\/p>\n\n\n\n Loan restructuring allows borrowers under financial distress to modify or renegotiate the loan terms, like an EMI moratorium<\/a> or rescheduling of repayments, with the lender to avoid EMI defaults<\/a>.<\/p>\n\n\n\n If you\u2019re finding it challenging to manage your loan repayments, restructuring your loan might be the way to go.<\/p>\n\n\n\n The various types of <\/a>loan<\/a> restructuring options in India are:<\/p>\n\n\n\n Lenders increase your loan repayment period, which lowers the monthly EMI. This is commonly used when there are temporary income issues, but a possibility to repay the loan over a longer tenure.<\/p>\n\n\n\n Lenders may reduce the interest rate to decrease the overall interest cost and monthly burden. This option is usually offered if you have a good repayment history.<\/p>\n\n\n\n In rare cases, lenders may waive a portion of the principal. This is more prominent during severe financial distress or settlement programs<\/a>, helping borrowers close the loan.<\/p>\n\n\n\n Banks may offer a moratorium, pausing EMIs for a fixed period. The interest may continue to accrue during this time.<\/p>\n\n\n\n We, at Tata Capital, offer a seamless restructuring experience for all our existing customers. So, if you have a loan with us, here\u2019s how you can get it restructured.<\/p>\n\n\n\n Step 1: Head over to our website and click the \u2018Login\u2019 option in the top-right corner.<\/p>\n\n\n\n Step 2: Select the \u201cRetail Customer Login\u201d option from the drop-down menu. Next, enter your registered phone number\/email address\/user ID, and enter the correct OTP to log in.<\/p>\n\n\n\n Step 3: Select the Customer service > Raise New SR tab.<\/p>\n\n\n\n Step 4: Once you\u2019re on the loan restructuring page, follow the instructions prompted on the screen.<\/p>\n\n\n\n Step 5: You may need to provide a fresh NACH mandate for EMI repayments on your existing bank account.<\/p>\n\n\n\n The documents you need to submit to initiate the <\/a>loan<\/a> restructuring process are:<\/p>\n\n\n\n Loan restructuring has both advantages and disadvantages. The benefits are:<\/p>\n\n\n\n Restructuring reduces EMIs or pauses payments. This makes repayment easier during income loss or financial difficulty.<\/p>\n\n\n\n It helps borrowers avoid missed payments. This also helps prevent legal action and recovery proceedings.<\/p>\n\n\n\n It is better to restructure payment on time than to default. Restructuring leaves a minor impact on your credit score.<\/p>\n\n\n\n The drawbacks of loan restructuring are:<\/p>\n\n\n\n The overall interest paid over the loan period increases when you extend the tenure or opt for a moratorium.<\/p>\n\n\n\n Restructured loans may be flagged in credit reports, affecting future loan eligibility.<\/p>\n\n\n\n Lenders do not approve loan restructuring applications for all borrowers. The approval depends on the lender\u2019s policy and the borrower\u2019s repayment history.<\/p>\n\n\n\nTypes of loan restructuring options in India<\/strong><\/h2>\n\n\n\n
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Key points and eligibility for loan restructuring<\/strong><\/h2>\n\n\n\n
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Loan restructuring process: Step-by-step guide<\/strong><\/h2>\n\n\n\n
Loan restructuring process for retail loan borrowers<\/strong><\/h2>\n\n\n\n
Documents required for the loan restructuring application<\/strong><\/h2>\n\n\n\n
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Benefits and drawbacks of loan restructuring<\/strong><\/h2>\n\n\n\n
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Impact of loan restructuring on credit score<\/strong><\/h2>\n\n\n\n