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Business HDFC Bank loan or credit card EMI restructuring: Key things to know before applying


In order to mitigate the hardship faced by common man amid coronavirus pandemic, the central bank of India asked the lenders to offer a moratorium of up to two years. The loan-restructuring scheme will be applicable for home loans, auto loans, education loans and other retail loans. During the moratorium period, borrowers don’t have to pay EMIs on the loan. However, the interest will be applied during the moratorium period. The loan recast option will available for HDFC credit card dues and EMIs as well. If your financial condition have been affected by coronavirus pandemic, you will be eligible for loan recast option.

Here’s all you need to know about HDFC Bank loan-restructuring plan
How loan-restructuring plan works
The balance tenure of the loan can be extended by a further period of a maximum of 24 months to ease your monthly EMI repayment burden. The bank may levy a fee if you choose to restructure your loan.
Credit card EMIs and loans:
Customer will have an option to restructure the entire credit card balance including the loans within the credit limit. The amount will be converted into a separate loan account. One may also choose to restructure either the card balance or loan or both the facilities. Those who have opted for Jumbo Loan facility from HDFC Bank, will be allowed to restructure their loans.
A minimum outstanding balance required to convert the card or loan outstanding, the bank said. The limit is set at ₹25,000.
Who is eligible for restructuring?
a) Individuals and entities that are classified as standard, but not in default for more than 30 days with the bank as on March 1, 2020 and continue to remain as standard across all its loans or facilities till date are eligible for restructuring.
b) The customer has to be impacted financially by the COVID-19 pandemic in the form of reduction or loss of income or cash flows.
c) The reduction of income and its financial impact on the customer will be reviewed by the bank basis the documents or information provided which does show the drop in cash flow due to the COVID-19 impact. The bank will assess the viability of the customer to pay the restructured EMIs basis the documents provided, before granting the restructuring.
“Apart from the viability calculations, the repayment track record of the customer, and the responses given by the customer while availing moratorium earlier will also be factored in the restructuring decision,” the private lender said.
How to apply?
You may visit the bank’s website for the application link to fill the application form and submit the relevant details. Alternatively, you may contact your RM. The link for application will be updated shortly.
Documents needed:
The customer needs to submit submit documents giving details about the current status of your employment or business.
1) For salaried borrowers – salary slips and bank statement may be required.
2) For self-employed borrowers or entities – Bank statement, GST returns, Income tax returns, Udyam certificate, etc. may be required.
The borrower may visit the HDFC Bank’s website for the online restructuring application link which will be updated shortly.
Impact on credit score:
As per regulatory guidelines, your loan or credit facility will be reported to the credit bureau as “Restructured”.
Even if the borrower has taken restructuring for only one loan, the restructuring has to be reported at a borrower level to the credit bureaus. Hence all the facilities or loans of the borrower with the bank will be classified and reported as “Restructured”.
What type of loans are not eligible for restructuring?
-Loans to individuals/entities for agricultural purposes and classified as agricultural loans by the bank
-agricultural credit societies
-financial service providers
-Central, State and local government bodies
-HDFC Bank employees
-Exposures to housing finance companies which have already been rescheduled
-Loans given for commercial usage will be entitled to claim relief under the MSME guidelines as explained in point 12 above.
Key things to consider before applying for loan-restructuring
“Customer needs to consider the cost involved in the loan restructuring scheme before applying for it. “The borrower will have to pay a higher cost, including additional interest and fees,” said Gaurav Chopra, founder and chief executive officer of IndiaLends and president of Digital Lenders Association of India.
The tenure of the loan may also comparatively increase under loan recast scheme. The restructured loan will have a higher repayment period and/or a payment holiday, the overall interest paid during the duration of the loan will increase.
“It is thus a wise choice to not opt for a loan restructuring facility if the borrower has the ability to repay his or her EMI’s on time. And for those who are not facing any liquidity crunch and have enough money, it is rather advisable to rather repay all their loans as soon as possible,” Chopra added.

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