After the end of the COVID-19 moratorium on Axis Bank personal loan in September, all borrowers (including those who had opted for moratorium) were required to start making their scheduled EMI payments from October 2020 onwards. But many borrowers are currently unable to resume regular monthly payments due to job loss, closure of business, reduced income, etc.
In order to provide relief to such borrowers, Axis Bank has introduced the RBI approved one-time personal loan restructuring plan. Opting for this restructuring framework is optional and it is advisable that borrowers should continue making their regular EMI payments if possible. This will minimize the potential impact on credit score as well as reduce additional interest charges in the long term.
What is loan restructuring?
The Axis Bank COVID 19 Loan restructuring framework is approved by RBI and its main goal is to relieve the the loan repayment burden faced by borrowers that are adversely impacted by the pandemic. The relief offered through the one-time loan restructuring option provided by Axis Bank may include either of the following:
- Additional moratorium on loan repayment for up to 24 months
- Rescheduling EMIs/loan tenure extension by up to 24 months
This one-time loan resolution plan offered by Axis Bank will also involve recalculation of the monthly EMI payable in line with the relief provided to the borrower.
Not all personal loan borrowers of Axis Bank are eligible to opt for this one-time restructuring facility. Only COVID-19 impacted borrowers including those who opted for the COVID-19 loan moratorium and fulfil the following criteria are eligible:
- As of 1st March 2020, loan account was designated “standard” with a period of default of 30 days or less
The applicant needs to provide clear evidence of financial stress due to the COVID-19 pandemic. Such stress can include:
- Salary reduction/job loss or cash flow impact on business for self and/or family members
- Reduced repayment ability due to medical emergency/emergency expenses incurred by the applicant/family members
- Applicant is employed in a COVID-19 impacted sector/residing in a containment zone or impacted due to continued lockdown due to the pandemic
The applicant will be required to provide documentary evidence in support of the above before the loan restructuring application is approved. Additionally the bank will also take into account the ability of the applicant to repay the outstanding loan according to the revised schedule before making its final decision.
In order to provide documentary evidence of financial distress due to the pandemic and an inability to repay the outstanding personal loan according to the original schedule, Axis Bank requires the submission of various documents that differ based on the applicant’s profile.
For Salaried Applicant
Salaried applicants applying for the COVID-19 loan restructuring plan offered by Axis Bank need to submit the following documents:
- KYC documents (Aadhaar, Passport, etc.) of borrower and guarantor
- Previous 12 months’ bank statement of applicant(s)
- Salary slips for the past 6 months with banking details
- Income Tax returns for the previous 2 years
- Latest Form 16 or Form 26AS for FY 19-20 and FY 20-21 (till date)
- Employment termination/salary deferment/salary reduction letter from employer
For Self-Employed Applicant
Self-employed borrowers are also eligible to apply for the one-time loan restructuring plan offered by Axis Bank and need to submit the following documents at the time of application submission:
- KYC documents (Aadhaar, Driving License, etc.) of borrower(s) and guarantor(s)
- Business bank account statement of applicant/promoter(s)/business owner(s) for previous 12 months
- Form 26AS for FY 2019-20 and FY 2020-21 (till date)/ GST Returns for FY 19-20
- Audited financial along with income tax returns for FY 2019-20
- CA certified audited/provisional financials for FY 2019-20
- Projected financials for FY 2020-21 and FY 2021-22 along with applicable supporting documents
In addition to the above mentioned documents, Axis Bank may ask applicant(s) for additional supporting documentation on a case-by-case basis.
How to Apply
At present, Axis Bank is not offering an online method to apply for one-time loan restructuring. Therefore, you have to visit your nearby Axis Bank Loan Centre in-person along with the completely filled out restructuring application form and all applicable supporting documents. The form to apply for personal loan restructuring can be downloaded from the official Axis Bank website. The last date to submit the application is 20th December 2020.
Q1. Will my CIBIL score be affected if I opt for restructuring?
Ans. If you avail for loan resolution, the applicable loan will be marked as “restructured” in your credit report. Subsequently, the impact on CIBIL score/credit score will be in line with the applicable policies of the respective credit information company.
Q2. My Axis Bank personal loan was disbursed on 12th March 2020. Am I eligible for restructuring?
Ans. No. Only personal loans disbursed before 1st March 2020 are eligible for restructuring based on fulfilling all other applicable criteria.
Q3. I have multiple loans with Axis Bank. Can I choose which one I want to restructure?
Ans. Yes. The loan restructuring application form contains the option of choosing one or more loans you want to restructure.
Q4. I was not able to avail the moratorium earlier. Can I apply for restructuring now?
Ans. You may or may not be eligible depending on reason why you were unable to avail a moratorium earlier. The option of one-time loan restructuring from Axis Bank can be availed only if your loan was disbursed before 1st Match 2020 and your loan account was classified as “standard” with no more than 30 days default on that date. Additionally, Axis Bank at its discretion may accept or reject your application based on its internal criteria.
Q5. How soon will Axis Bank approve my loan restructuring request?
Ans. Axis Bank may take up to 15 working days from the submission of application along with applicable documents to notify you of its decision. However, do remember that approval of the restructuring decision is not guaranteed and may vary on a case by case basis.