Published on Feb 1, 2023Updated on Jul 14, 2026
To help with loan repayments, there are options available to help individuals and businesses who are struggling with their current loans. Two of the most common loan modification options are loan restructuring and loan refinancing.
Though they both offer similar benefits, they do differ in terms of how they work and the time frame involved. In this blog post, we’ll explore loan restructuring v/s loan refinancing, these two types of loan modifications, how they work, and when you should consider each option.
It is the process of modifying the terms of a loan. This can involve extending the repayment schedule, reducing the interest rate, or changing the structure of the loan. Loan restructuring is often done to make a loan more affordable for the borrower.
This could involve extending the repayment period, lowering the interest rate, or changing the monthly payment amount. Restructuring is often done to make a loan more affordable for the borrower or to avoid default.
It is the process of taking out a new loan to pay off an existing loan. This can be done to get a lower interest rate, get a different repayment schedule, or tap into equity in the property. Loan refinancing is often done to save money on interest payments or to consolidate multiple loans into one payment.
This is also called personal loan balance transfer. The new loan may have different terms than the existing loan, such as a different interest rate, repayment period, or monthly payment amount. Refinancing can be used to lower the monthly payment on a loan, reduce the total amount of interest paid on the loan, or both.
Must Read: Reasons Why to Consolidate Your Unsecured Debt
So, when deciding whether to restructure or refinance your loan, it's important to consider all factors involved and choose the option that best suits your individual needs and circumstances.
There are a few key differences between loan restructuring and loan refinancing. Restructuring generally refers to negotiating new terms with your lender, while refinancing involves taking out a new loan to replace your existing one.
Each option has its own set of pros and cons that you should consider before making a decision when you apply for a personal loan.
Loan restructuring v/s loan refinancing are two most different terms related to debt. Restructuring is when a borrower renegotiates the terms of their existing loan, while refinancing involves replacing an old loan with a new one.
Depending on the circumstances, either option can be beneficial for borrowers who are struggling to pay off their loans. In case you're looking to transfer your personal loan or apply for a personal loan, you can get in touch with SMFG India Credit. In any case, it's important to fully understand both options before making any decisions as they could potentially have lasting impacts on your financial situation. SMFG India Credit also helps with personal loan balance transfers. Avail of personal loans, with interest rates starting at 12.5%* per annum and tenures that extend up to 60 months*. You can make the most of our external financial support to see your dreams come true.
Important Note: This article is for general informational purposes only and may be subject to change from time to time. As product features, eligibility criteria, interest rates, charges, fees, tenures and other terms may be revised as per SMFG India Credit's policies, readers are advised to refer to the latest details from the respective product pages (please select from the top menu). For the latest loan charges, please visit Charges & Fees Link and for the latest Interest rates, please visit Interest Rate Rationale. Please note that final loan terms, disbursement process and eligibility criteria will depend on SMFG India Credit's policies at the time of loan application.
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