What are the key benefits of SBI Credit Cards?

SBI Credit Cards offer a wide range of benefits, including rewards, cashback, lounge access, discounts, and insurance coverage.

How can I apply for an SBI Credit Card?

You can apply for an SBI Credit Card online through the Paisabazaar platform, where you can compare card options and check for pre-approved offers.

What factors should I consider when choosing an SBI Credit Card?

Consider your spending habits, lifestyle, and financial goals to select a card that best suits your needs, such as travel, shopping, or rewards.

How can I manage my SBI Credit Card efficiently?

SBI Card offers a user-friendly mobile app and online banking services to help you manage your card, check statements, make payments, and access additional features.

What precautions should I take to avoid accumulating credit card debt?

Responsible credit card usage includes paying bills on time, managing credit limits wisely, and avoiding unnecessary spending to prevent debt accumulation.

Loan Restructuring vs. Refinancing: Understanding the Key Differences

Understanding the Difference between Loan Restructuring and Refinancing

Loan restructuring and refinancing are two terms often used interchangeably in the financial world. In this article, we will delve into the meaning of loan restructuring and explain how it differs from loan refinancing.

Loan restructuring refers to the changes made to existing loan terms, allowing borrowers to manage their loan repayments more easily. This becomes especially important in challenging times, such as the ongoing pandemic, when borrowers may struggle to meet their repayment obligations.

Rather than letting borrowers default on their loans, financial institutions, with the assistance of the government, can modify the loan terms to make repayment more feasible. It is crucial to note that loan restructuring should not be confused with loan refinancing.

Loan restructuring is typically the preferred option for lenders as it helps prevent the loan from being classified as a non-performing asset (NPA), which negatively affects the banks' profits. Moreover, loan restructuring is a more cost-effective solution compared to a borrower declaring bankruptcy.

The loan restructuring process involves various methods, such as extending the repayment period, altering the amount repayable, changing the previously agreed installment schedule, adjusting the previously charged interest rate, and providing additional loans. In certain cases, borrowers may be allowed a settlement payment period exceeding three months.

In response to the COVID-19 pandemic's economic impact, the Reserve Bank of India (RBI) introduced loan restructuring rules and regulations. These guidelines enable lenders to restructure loans for borrowers who are facing difficulties in repayment due to the pandemic. Options for restructuring include payment rescheduling, lowering interest rates, and providing a limited loan repayment holiday or pause.

It's important to note that the availability of loan restructuring depends on the discretion of the lender and may vary based on factors such as repayment ability and loan amounts. To apply for loan restructuring, borrowers must contact their respective lenders.

While loan restructuring can bring relief to borrowers, it does have implications on credit scores and eligibility. The restructuring process negatively affects borrowers' credit scores, even if they only request to restructure one loan. Restructured loans are usually reported as "settled" or "written off," which may raise concerns of wilful defaulting for lenders.

Loan restructuring differs from loan refinancing, as the latter involves obtaining a separate loan to pay off an existing one. Borrowers opt for refinancing when the new loan offers better terms and interest rates. This helps borrowers improve their liquidity and manage their finances effectively.

However, loan refinancing can have its challenges and may lead to increased debt if not managed carefully. Borrowers need to consider all expenses, interest payments, and potential financial difficulties, such as job loss, before choosing this option.

In conclusion, loan restructuring is case-dependent and not always available. Due to the pandemic's impact, the RBI temporarily allowed for a one-time loan restructuring option. Borrowers should carefully assess their financial situation and consult with their lenders to determine the most suitable solution.

If you are considering a personal loan with minimal documentation and quick approval within 24 hours, you can visit the Money View website or download the app to apply today.