How Loan Restructuring affect your Credit Score and Loan eligibility ?? After Moratorium What should Follow ?
The Reserve Bank of India allowed a one-time restructuring of loans after the six months’ moratorium facility got over in August. The Reserve Bank of India’s ( RBI ) move to allow lenders to restructure loans of borrowers who are facing financial difficulties may ease you up but be ready to deal with lower credit scores and loan eligibility. RBI allowed a one-time restructuring of loans after the six months’ moratorium facility got over in August. The regulator has allowed lenders to retain these loans as “standard" on their books, which will help lower their non-performing assets (NPAs), but report them as “restructured" to the credit bureaus. Loans reported as restructured have a negative impact on the credit scores of borrowers. “Credit scoring algorithms are statistical regression models that consider this variable (restructuring) while calculating the overall score along with other factors," said Manu Sehgal, business development leader, India, Middle East and Afr