SBI Offers 2 Yr Moratorium for Restructuring Personal Loans

28 Sep 2020 // 27 min read // #mmm news
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State Bank of India has shared details of 2 year loan restructuring for customers affected by COVID 19. The customers can either opt for a moratorium of up to 24 months or extend tenure up to 2 years for repayment relief.

After six months of Moratorium, the RBI had asked banks to issue loan recast guidelines for their customers amid ongoing financial disruptions for businesses and individuals. The last date to apply for SBI repayment relief for Personal Loans, Home Loans, Car Loans and Education Loans  is December 24, 20.

SBI has launched a website for borrowers where they can check their eligibility for the restructuring and upload documents. Followed by this, the customer will get a preliminary sanction of the application. The customer needs to get this document assessed and approved at the branch level.

Customers can use Personal Finance Restructuring Eligibility Calculator launched on SBI website. Here is the link: SBI Personal Finance Restructuring Calculator


The SBI has offered two types of relief under this framework for recasting loans:

1. Moratorium- for up to 2 years

2. Loan Restructuring- max tenure extension of 2 years.

The cost of a restructured loan will be 0.35% more than the current rate of loan. However it is important that the Moratorium will also accrue interest. Only customers who have faced loss of income due to COVID19 should apply for relief.

FAQs- SBI Resolution Framework for COVID-19-related Stress

✅ What is the purpose of restructuring Personal Loans?

The purpose of RBI’s Framework for restructuring Personal Loans is to offer a substantial repayment relief to borrowers who are significantly affected by the Covid19 pandemic. After the six months of Moratorium, the eligible borrowers are offered to reset their liability into a restructured loan for up to 2 years.

✅ What did SBI offer for repayment relief on Personal Loans?

SBI has offered 2 options for repayment relief. Customers can opt as per their financial situation.

i. Moratorium or EMI Holiday for up to 24 months.

ii. Rescheduling EMIs and extension of tenure. Maximum tenure extension of 2 years is allowed.

✅ Who is eligible for restructuring of loans after Moratorium?

Only those borrowers who are affected by Covid-19 pandemic are eligible. The lender will assess the eligibility if you have any of the following proofs:

i. Your salary or monthly income for Aug 2020 is less than salary or income of Feb 2020.

ii. If you faced salary cut during lockdown period.

iii. If you have lost your job or closed down business during pandemic.

iv. All self-employed/ professionals/ business owners will qualify if they had lost their business or faced closure during lockdown.

✅ What types of loans are eligible for restructuring?

All retail borrowers, including Personal Loans and Non Personal Loans are eligible. Personal Loans include:

i. Home Loans and other related loans.

ii. Education Loans

iii. Auto Loans for personal use

iv. Personal Loans

✅ What are eligibility criteria for restructuring?

To qualify for recasting benefit under COVID 19 framework the account should fulfil following:

  • The loan account should be “Standard.” It should not have defaulted for more than 30 days as on 01.03.2020.
  • Your monthly income should be impacted due to pandemic.

✅ Are loans availed after March 2020 eligible for restructuring?

No. Only accounts active in books before 01.03.2020 are eligible for restructuring benefit.

✅ I foresee loss of income in future. Can I avail of restructuring benefit?

No. Only those affected due to lockdown and pandemic are eligible for restructuring.

✅ How to apply for restructuring relief for SBI Loans?

You can apply online on The application is protected by an OTP that is directed via your Mobile Number. Alternatively, visit your bank branch and submit the application for restructuring of loan.

✅ What documents are needed for restructuring of loans?

You will need copies of the following documents:

i. Latest salary slip, along with Feb 2020 salary slip.

ii. A declaration of estimated income for ‘immediately after the end of the desired moratorium.’ Maximum of 24 months of relief will be granted.

iii. In case of job loss, letter of discharge will also be required.

iv. Salary Account Statement or Operating Account Statement for Feb 2020 till 15 days prior to making  application.

v. Declaration for impact on business due to Covid-19.

✅ What is the last date to apply for restructuring relief?

The last date to apply for restructuring relief from SBI is 24.12.2020.

✅ If I opt for 2 yr moratorium, will interest accrue?

Yes. Moratorium is EMI deferment and not the waiver. Interest will accrue during EMI holiday.

✅ Is this new moratorium over and above Covid-19 EMI holiday?

Yes, this will be in addition to the previous six month COVID 19 relief offered by bank.

✅ Can I repay during the Moratorium?

Yes, you can repay as your financial health eases. There will be no charge for prepayment. It will also help you reduce interest cost.

✅ Is there any age limit for applying for Personal Loan restructuring?

No. It is a product specific offer. The tenor extension will be according to your loan agreement.

✅ Will my EMI change if I opt for Moratorium?

Yes. The tenure will extend as per the moratorium granted. After adjusting the interest accrued and tenure extension, EMI schedule will be re-assessed and shared with you.

✅ How much will loan restructuring cost?

The additional interest of 0.35% p.a over and above your current pricing will be charged. This calculation will be made for the remaining tenure of the loan.

✅ Will I be eligible for other credit products under framework?


✅ Can I seek relief for more than one account?

Yes, you can get relief for multiple accounts, subject to eligibility.

✅ How long will SBI take to approve restructuring relief?

The bank will take 7-10 working days after submission of the application.

✅ Is there any processing fee applicable for loan restructuring?


✅ How do I execute the request after sanction of restructuring?

An Arrangement Letter (in duplicate) will be issued, stating details and terms and conditions. You need to get this document duly accepted and signed by all the signatories of the loan, including loan guarantors (if any) within 10 days to the bank.

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