Restructure when you face genuine cash flow stress and cannot make current EMIs. If you're simply looking to save interest, prepayment or refinancing at a lower rate is typically better than extending the tenure.
What is the difference between loan restructuring and refinancing?
Refinancing means moving your loan to a new lender at a better rate. Restructuring means renegotiating terms with your existing lender — usually extending tenure to lower EMI, often with a temporary interest rate concession.
Does loan restructuring affect CIBIL score?
Yes. Loans restructured due to financial distress are typically reported as 'Restructured' in your credit report, which can reduce your CIBIL score and affect future loan eligibility for 2–3 years.
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