Back
The Restructured Tag: What You Need to Know
Loan restructuring is a relief measure introduced by the RBI during times of widespread economic distress (like the COVID-19 pandemic) to help borrowers who are unable to meet their EMI obligations. While it prevents you from being labeled an 'NPA' or a defaulter, it is not a 'free pass.' Restructuring is reported to CIBIL and carries a specific tag that impacts your credit profile.
The 'Restructured' Status
When you opt for restructuring—whether through tenure extension or an interest-only period—your credit report will reflect the status as 'Restructured'. To future lenders, this indicates that you faced a financial crisis and were unable to fulfill the original terms of your loan contract. While it is much better than a 'Default' or 'Settled' tag, it will likely prevent you from getting new credit for the next 12 to 24 months until you prove your financial stability again.
Score Recovery Post-Restructuring
The immediate impact of restructuring on your CIBIL score is usually a dip. However, once the new EMI schedule begins, every on-time payment helps in slowly rebuilding your score. The goal should be to finish the restructured tenure without a single delay. Once the loan is fully closed, the negative impact of the 'Restructured' tag will gradually fade away as you build a fresh history with newer, standard loans.
