Loan restructuring allows lenders to modify existing loan terms when borrowers face temporary financial hardship. Options include: extending tenure (lower EMI), reducing interest rate, providing a moratorium (payment holiday), converting interest to a term loan, or adjusting repayment schedules.
RBI has allowed restructuring schemes during economic disruptions (like COVID-19). Restructured loans may be flagged on credit reports but are treated more favorably than defaults or NPAs. Borrowers should approach lenders proactively at the first sign of difficulty rather than missing payments.
Loan restructuring provides a lifeline during financial difficulties, preventing NPA classification and credit score damage. Knowing this option exists helps borrowers navigate tough times.
Nihal Fintech helps clients facing financial difficulties explore restructuring options with their lenders, guiding them through the process to protect their credit standing.
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