People know there is something called credit card restructuring, but unfortunately, they don’t use this service offered by financial institutions due to their lack of knowledge. They don’t know what this service is all about, how it works, and others. And thus, they don’t get the benefits and suffer from many credit card problems.
To avoid any, we will answer some common restructuring questions in this post.
What Is Credit Card Restructuring?
The economic fallout due to the COVID-19 pandemic led to significant financial stress for customers. This is where it helped people and is helping them.
The literal meaning of the term “restructuring” is making changes in the existing structure to give it a better look or make things better for all. Similarly, it means making changes in the existing functioning of credit cards to make repayment easy.
In restructuring, the bank or the financial institution converts the credit card dues to a term loan with equated monthly installments (EMI) with a reduced rate of interest. When you opt for the restructuring service, the credit facility on the credit card withdraws.
Who Is Eligible For Credit Card Restructuring?
Everyone is not eligible for it. Generally, the customers whose card accounts and other loan accounts are in good condition with the bank are eligible for restructuring. This ensures the bank that the customer isn’t financially broken completely and there is a high chance of recovery. It’s just the condition that has prevented the customer to pay the credit card dues.
Other than this, the application for the restructuring is subject to internal assessment, based on the bank’s policies and procedures.
What Are The Terms And Conditions Of Credit Card Restructuring?
- If you fail to adhere to the stipulated payment plan, the restructuring plan may be revoked.
- After the acceptance of the restructuring plan, the credit card facility extended on the credit card will be withdrawn. The credit card could be re-issued with a suitable limit depending on the timely repayment of dues as outlined in the restructuring plan.
- You will be liable to pay a late payment fee, interest, etc if charged on your credit card account in the interim period between acceptance of the request and invocation of a restructuring plan.
- If you hold more than one card with the bank, all the cards will be reviewed for restructuring and blocked for usage on opting in for restructuring service.
How Does Credit Card Reporting Happen On Opting For Restructuring?
It’s very simple. In your credit card account, the “restructured” status will reflect where the resolution plan is implemented in this framework. Other than credit facility and its rules, the credit history will be governed by the respective policies of the credit information companies. They update the details as applicable to accounts that are restructured.
What Will Happen If You Cannot Pay As Per The Agreed EMI Schedule?
The restructuring plan will get revoked upon non-payment and you will not be eligible to reapply for any further restructuring plan.
Credit card restructuring is for your benefit. So, you should gain as much information as possible and use the service undoubtedly.