If you are facing problems in repaying outstanding loans, and you are having problems in your regular income , during the lockdown there was EMI moratorium or loan moratorium
Under the EMI moratorium or loan moratorium you didn't have to repay principal amount during the lockdown period
Low Reserve Bank of India (RBI) has announced a loan restructuring programme during early August who details are now being worked upon by a expert committee headed by veteran banker K.V.Kamath
The Committee will advise RBI on how loans can be restructured as one time process of re-working the loan conditions to provide relief to borrowers
The loan restructuring programmer or offer will be available to only those whose loan repayment has got affected by disruptions due to the outbreak of the COVID19 pandemic
So, those who had till March 31, 2020 not more than 30 days of loan repayment outstanding, the one-time loan restructuring programme is available for them
While the restructuring programme covers both corporate and retail loans, here will discuss only loan to individuals or what is being referred to as "Personal Loan"
Under Personal Loans, loan such as property loans, education loan, consumer loans
All banks including public sector banks, private banks, foreign banks and cooperative banks besides NBFCs will get covered
Under the one-time loan restructuring programme the term of the loan is likely to be extended. This can be extended upto 2 years
Due to the extending of the loan term, the EMI could be reduced
During the lockdown if you had availed of the moratorium, the interest not paid is likely to be taken out as a separate loan to be repaid in 2 years
Since you will be seeking an extension of the loan term, therefore the interest costs will go up and your interest rate could go up by 30 basis points or 30 percentage points
The impact of the increased interest cost will get spread over the remaining tenure of the loan
But the key here is that you are getting more time to repay the loan which is taking the pressure off to some extent
The one-time loan restructuring programme will be available till December 31, 2020
If you can afford not incur additional expenses then this one-time loan restructuring programme is not for you
If you are under immense pressure and have no option, this loan restructuring programme can be considered