The coronavirus pandemic has disrupted the life of every individual. The covid-19 restrictions and lockdown are hurting the finances of every Indian. Many are finding it difficult to repay their loans and EMIs. Considering their pain, RBI recently offered financial support to these struggling borrowers.
RBI announced a resolution framework 2.0 for individual borrowers, small businesses, and MSMEs. Under this, the banks will have to provide a loan restructuring option to those struggling to repay the loan.
At Money9 Helpline we take the responsibility to help you in shedding away this financial burden covid-19 has amplified. The helpline hosted Satyam Kumar, CEO, Loan Tap to resolve our callers’ queries related to EMIs payment, loan payment in a financially tight situation.
Here are some queries:
Aditi Basu, Kolkata: I am paying an EMI of Rs 3,200 for an education loan due to an end in October 2022. Recently, my salary was reduced by 45 %. Should I approach the bank for loan restructuring or continue with the existing repayment cycle?
Satyam: It depends on your cash flow and the strain your can take. All loans qualify under the restructuring scheme. If you have a cash flow and are comfortable in paying EMI, then you should continue paying EMI because there is an interest cost to it. But if it is hitting your cash flow go for restructuring of 3 months or 6 months, based on your cash flow requirement.
Mukund Kulkarni, Pune: I had taken a home loan of Rs 34 lakh for a tenure of 25 years. During last years’ Covid-19 scenario, I had to sell gold worth Rs 16 lakh to pay the EMIs. My bank is offering to reduce the repayment but not the EMI, please advise the best option to cope with a debt burden
Satyam: In your condition, discuss with the banks on giving you remedial. There is an option of a step-up repayment facility that you can ask your government to provide to you. With the step-up repayment facility, you can continue paying with lower or zero possible installment now, and in later periods higher installment.
Kaushik Banerjee, Kolkata: I had taken a loan of Rs 15 lakh for my retail outlet. Due to the pandemic, I am unable to run my business. The current loan outstanding is Rs 10 lakh. Should I approach the bank for loan restructuring and what are the required documents for the process?
Satyam: Yes banks can restructure your loan, but you should first assess if you will be able to pay even after restructuring, if not then consider discussing your situation with the bank and talking about an over-the-counter settlement plan.
