What is loan restructuring?

Answer

A:

Loan restructuring is a process where a lender modifies the original terms of an existing loan to make repayment easier for the borrower who is facing financial difficulties. The main goal is to help the borrower manage their debt more effectively and avoid default.

---

Key Features of Loan Restructuring:

1. Modification of Loan Terms:

   • The lender may change the loan tenure, interest rate, or repayment schedule.

   • EMIs (Equated Monthly Installments) can be reduced by extending the loan duration.

2. Temporary or Permanent:

   • Restructuring can be temporary (e.g., payment holidays, reduced EMIs for a few months) or permanent (changing loan tenure or interest rates).

3. Avoids Default:

   • Helps borrowers avoid defaulting on their loan by making repayments more affordable.

4. Types of Loans:

   • Restructuring can apply to home loans, personal loans, car loans, business loans, etc.

---

Benefits of Loan Restructuring:

• Provides immediate relief from financial stress.

• Prevents negative legal actions by the lender.

• Helps maintain a better credit record compared to defaults or settlements.

• Enables the borrower to continue repaying the loan on revised terms.

---

Things to Consider:

• Restructuring might increase the total interest paid due to longer tenure.

• Not all lenders offer restructuring; approval depends on your financial condition and lender’s policy.

• It can impact your credit score, but usually less negatively than default or settlement.

---

How Legal365 Can Help:

• Evaluate your financial situation and eligibility for restructuring.

• Negotiate with lenders for favorable restructuring terms.

• Ensure the restructuring agreement is legally sound and protects your interests.

---

Want to Learn More About Loan Restructuring?

    Visit: www.legals365.com
    Call: +91 9625961599

Advocate B.K. Singh and the Legal365 team are ready to support you through the restructuring process and beyond.

.