WHAT TO DO IF YOU’RE STRUGGLING TO REPAY YOUR LOAN

• Published on Mar 04, 2026
• Read Time 5 mins
• 

Environmentally conscious and curious Indian citizens have been empowered by a massive rollout of green finance options. Whether green loans for EV rickshaws and 3-wheelers or eco finance for MSMEs needing solar setups, the industry is making good money. However, loan defaulters and others with repayment stress are sinking into doubt about their decisions.

RBI Deputy Governor M. Rajeshwar Rao warned (in April 2025) that while green loans can support decarbonisation, there’s a greater risk of credit risks as technologies change and repayment cycles stretch. Small businesses are in an even trickier situation due to volatile income streams and a lack of collateral.

Talk to Your Lender Early

Silence will worsen your loan repayment stress. Borrowers must immediately approach lenders to restructure EMIs. Many banks and NBFCs often allow extending tenures to reduce the borrower’s monthly outgo without any penalisation. This means EV rickshaw drivers and solar adopters can formally request tenure extensions without fear of hidden charges.

Even better, some lenders grant short repayment holidays (temporary moratoriums). This works for borrowers who have seasonal income dips in the transport or logistics sectors.

Also, check whether your bank gives reducing balance interest rates so your EMIs continue shrinking.

Also Read: Understanding Interest Rates in India in 2026: Flat Rate vs Reducing Balance

Explore Green Loan-Specific Relief

Green loans often qualify for state subsidies or interest subsidies that can ease repayment. For example, Delhi EV Policy 2.0 (Draft) proposes additional incentives for women e‑rickshaw drivers. Similarly, the Goa Energy Development Agency (GEDA) gives up to ₹60,000 subsidy for locally manufactured EV three‑wheelers.

Thus, borrowers struggling with EMIs should re‑check eligibility for these and similar subsidies. Chances are, they can directly reduce outstanding amounts.

Consider Loan Consolidation

Investigative reports in Mint highlight how borrowers juggling multiple loans often pay higher interest overall. Consolidating into a single green MSME loan or refinancing through a regulated NBFC can:

• Lower interest rates
• Simplify repayment schedules
• Reduce harassment from multiple lenders

CTA: Apply for an SME Loan

Reduce Costs with Energy Savings

Green loans finance assets that save money over time. Borrowers can redirect these savings toward EMIs.

• EV rickshaw drivers: Switching from petrol/diesel saves ₹300-₹500 daily in fuel costs. Over a month, this sums to ₹9,000 to ₹15,000. That could be enough to cover a significant portion of EMIs.
• Solar borrowers: Rooftop panels reduce electricity bills by 30-40%. A household saving ₹2,000 monthly can redirect this toward loan repayment.

Also Read: Green Loans vs Traditional Loans: What’s Best for Your Wallet and The Planet?

Find Legal and Regulatory Protection

As a borrower, you should know your rights in situations of harassment or fraud. Here are some applicable routes:

• RBI’s Digital Lending Guidelines (2025): Mandate that only regulated entities can disburse loans.
• Consumer Protection Act: Allows borrowers to file complaints against illegal recovery practices.
• Helplines: RBI and state consumer forums provide direct grievance redressal.

RBI’s Ombudsman scheme (updated 2026) now includes a fast‑track grievance redressal for digital lending complaints. This helps borrowers resolve harassment cases within 30 days.

Restructure Debt and Stay Financially Protected

If you’re struggling with EMI, it’s a signal to have better financial conversations quickly. India’s green loan ecosystem gives borrowers unique levers that traditional debt won’t provide. We’re referring to subsidies that reduce outstanding amounts and energy savings that can be redirected into repayments. Moreover, RBI‑backed restructuring options protect your dignity while easing financial pressure.

The bottom line is that borrowers who communicate early with lenders and verify subsidy eligibility are far less likely to default. RBI’s 2026 MSME reforms and Digital Lending Guidelines provide a safety net, but the first step must come from the borrower

FAQs

1. Can EV rickshaw drivers restructure their loans?

Yes. NBFCs and banks often allow tenure extensions or EMI rescheduling, supported by RBI’s MSME lending directions.

2. Are loan subsidies available to reduce outstanding amounts?

Yes. PM E‑DRIVE and state policies like Goa’s GEDA subsidy directly reduce purchase costs.

3. Is loan consolidation safe?

Yes, if done through regulated NBFCs or banks. RBI reforms in 2026 encourage consolidation without collateral.

4. What legal protections exist against loan repayment harassment?

RBI’s Digital Lending Guidelines and the Consumer Protection Act safeguard borrowers.

5. How can solar borrowers ease repayment?

By redirecting electricity bill savings toward EMIs, accelerating debt clearance.