Loan Restructuring

HDFC Bank Loan Restructuring Scheme

HDFC Bank Loan Restructuring Scheme

Last Updated : Sept. 23, 2020, 3:31 p.m.

In March 2020, the Reserve Bank of India (RBI) provided a Moratorium Period to the borrowers that continued until August 31, 2020. During this period, borrowers had the option to not pay their loan installments without any worry about credit scores. However, lenders kept charging interest on the balance loan amount. As of now, the Moratorium period is over, the RBI has announced a resolution plan under which banks can offer Loan Restructuring to their borrowers. Keeping in line with the central bank, HDFC Bank Loan Restructuring Scheme is available to borrowers with which they can extend their tenure by a maximum of 24 months.

With the HDFC Bank Loan Restructuring Scheme, customers can choose to extend their balance tenure to a further period of 24 months that will make their EMIs affordable. The primary aim of this scheme is to address the economic stress that customers have been facing amid the ongoing pandemic caused by COVID-19. This restructuring of loans by HDFC Bank will ensure that every customer, whose finance has been impacted due to the pandemic, can get some financial relief. Other than loans, customers can also restructure their credit card balances if they like to.

If you are looking to know about some of the important things related to the HDFC Bank Loan Restructuring Scheme, this could be a good post for you to read. We will talk about Benefits a customer can get, Eligibility, Application Process, Required Documents, etc. So, keep reading!

HDFC Bank Loan Restructuring Scheme Benefits

As we told HDFC Bank Loan Restructuring Scheme aims to help borrowers who are struggling to pay their loan repayments and want to opt for an additional tenure upto 24 months. The bank had already provided a 6-month Moratorium period before this; so this is an additional period. Apart from loans, customers can also enjoy the restructuring benefits on their credit cards. We are showing some of the benefits of the HDFC Bank Loan Restructuring Scheme below. Please have a look.

  • The maximum period that the borrower can opt for as an additional tenure on their loans is 24 months. So, the balance tenure of a customer’s loan can be extended by a further 24 months. So, if an individual has 3 years left on his personal loan, he can extend his tenure by a further 2 years.
  • Due to tenure extension, the EMI amount will automatically become lower and customers will be able to make the repayments on time in a hassle-free manner. You should remember that, when you choose to extend your loan tenure, you may end up paying a higher interest amount on your loan amount.
  • By opting for the HDFC Bank Loan Restructuring Scheme, there will be no impact on your credit score as a loan or credit facility will be reported to the credit bureaus as ‘Restructured’. This will be applied to all the facilities or loans of the customers taken from HDFC Bank even if a customer has only opted for a Restructuring Scheme for only one loan.
  • Apart from Loans, you can also restructure your credit card loans and their outstanding balance. You can get the entire credit card balance including the loan within the credit limit restructured and converted into a separate loan account.
  • If you have a Jumbo Loan on your card along with the outstanding balance, it is not mandatory to restructure the Jumbo Loan. You have the freedom to choose either the outstanding card balance or Jumbo Loan or both of them.
  • The minimum loan amount that can be restructured is fixed at INR 25,000. Any amount less than this cannot be restructured under this scheme of HDFC Bank. Similarly, the minimum outstanding balance on your card should be INR 25,000.

HDFC Bank Loan Restructuring Scheme Eligibility

What are those conditions that a customer needs to fulfill if he/she wants to opt for HDFC Bank Loan Restructuring Scheme? We are showing all those conditions below. Please check.

  • The first and foremost condition is that loans taken by individuals and Entities should be classified as ‘Standard’ and must be taken before March 1, 2020. There shouldn’t be any default of more than 30 days with the bank until March 1, 2020. Your application for restructuring may be rejected if there has been any kind of default.
  • The ‘Standard’ classification should continue to remain as ‘Standard’ across all the loans or any other facilities until the application for restructuring.
  • The borrower must have been affected financially by the pandemic. This effect can be in the form of Reduction (Salary Cuts) or Loss of Income or Cash Flows (Job Loss or Business Closure).
  • To get an idea about the reduction of income and the financial impact on the borrower, HDFC Bank will review the documents and other information provided by the customers. These documents should show a drop in the cash flow due to COVID-19.
  • The final decision about whether a borrower is eligible for HDFC Bank Loan Restructuring Scheme will be taken according to the documents he/she provides.
  • The bank will also consider the repayment track and response given by the customer in the earlier 6-months moratorium to make the final restructuring decision.
  • Borrowers whose present income is not affected but they might face an income loss in the future are also not eligible for loan restructuring.

HDFC Bank Loan Restructuring Scheme Pricing Change

There will be no change in the interest rates of your loan or any other facilities if you decide to opt for the HDFC Bank Loan Restructuring Scheme. The interest rates will be the same as before; you can only extend your loan tenure. So, your EMIs will be of a lower amount. However, you may have to pay an additional processing fee or charges if you choose to restructure your loan that will be conveyed by the bank at the time of approval.

Which Types of Loans Will Not be Covered Under the HDFC Bank Loan Restructuring Scheme?

Before applying for the HDFC Bank Loan Restructuring Scheme, it is important to know if your loan will be covered under it or not. In the released FAQ regarding the restructuring, HDFC Bank has clearly mentioned the list of loans that will not be covered under it. We are showing all of them below. Please have a look.

  • Loans given to Individuals or Entities for the Agricultural Purposes and Classified as the Agricultural Loans by the bank
  • Agricultural Credit Societies
  • Financial Service Providers
  • Loans given to Central, State and Local Government Bodies
  • Loans given to HDFC Bank Employees
  • Exposures to all the Housing Finance Companies (HFCs) which have already been rescheduled

Note: Loans excluding the ones mentioned above will qualify for the Loan Restructuring Scheme, subject to meeting other conditions as stipulated by HDFC Bank.

All the borrowers should keep this thing in mind that loans given for commercial usage will come under the Relief given to the MSMEs. All self-employed individuals or entities can register themselves through the Udyam Portal of the Government. This MSME Reconstructing scheme is exclusively launched by the government of India with which people can get relief.

How to Apply for HDFC Bank Loan Reconstructing Scheme?

You must be wondering about the process by which you can apply for the HDFC Bank Loan Reconstructing Scheme? Well, borrowers just need to visit the official website of the HDFC Bank where they can download the Restructuring Application Form. The best thing about this is that a customer can apply for one or all the loans by filling this single application form. Fill the form carefully and submit it to the branch along with the required documents.

Also, the loan restructuring scheme is open to all the customers irrespective of whether they had applied for a moratorium before. After receiving the application form, the bank will assess the eligibility regarding the impact of COVID-19 and then make a final decision.

Required Documents for HDFC Bank Loan Restructuring Scheme

As we said, you will need to submit the Restructuring Application Form with a few basic documents so that the bank can assess the economic impact. These documents will give details about the current status of your employment or business. We are showing all of them below. Have a look.

  • For Salaried Borrowers – Salary Slips and Bank Statements
  • For Self-employed Borrowers/ Entities – Bank Statements, GST Returns, Income Tax Returns, Udyam Certificate, etc.

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