How borrowers can use the second loan restructuring program offered due to coronavirus: Should you opt for it?

How can you use the second loan restructuring program offered due to coronavirus?

The RBI had announced a Loan restructuring program in the year 2020 and later in the May of 2021, it announced a second resolution framework for individual borrowers. In this article, we would look at the second loan restructuring program and understand its working. 

Who all are eligible?How borrowers can use the second loan restructuring program offered due to coronavirus: Should you opt for it?

This Loan restructuring program was introduced with the main goal to provide relief to those borrowers who have never applied for any sort of reconstructing program in the past and have been repaying the bank on a regular basis. 

If a borrower is not able to repay the loan amount in time, then the account of the borrower is treated as a defaulting account after some time. It would be essential for you to know that after how many days your loan can lose the tag of a standard loan and becomes a defaulting accounting. Gaurav Chopra, Founder and CEO of IndiaLends, an online lending platform said:

What types of loans are eligible?

All popular credit products have been made to be eligible for reconstruction. Babu KA, senior VP, and Head, Loan Collection and Recovery Department said:

“Moratorium for payment of interest and/or principal with or without extension of the remaining term subject to the maximum stipulated in the scheme is offered in the case of term loans”

The application time for reconstructing the facility depends upon the time duration of the previous repayments made by the borrower. Credit score can be a very critical factor that can be affected due to this moratorium. These borrowers would be considered in the default category and the credit history would depict the use of reconstructing.

The adverse economic conditions have forced many borrowers to apply for these reconstruction offerings. The use of these reconstructions would have effects while applying for credit in the future. 

Reconstructing have its effects like higher interest payment and the damage of credit history to some extent. So, you should perform a thorough analysis and research before applying for reconstructing as it can have adverse implications for you in the future.


I have read the Privacy Policy & Agree to Terms & Conditions and authorize Dialabank & its partner institutions to Call or SMS me with reference to my application.