Bank Negara Malaysia announced an automatic six-month moratorium on all bank loans starting from April 1. Still not sure about it? Here are the answers you need!

This information is extracted from the digital magazine by EdgeProp.com.my

Q1: Who is eligible for the deferment package?

All individual loans or financing are eligible excluding credit cards and loans that have more than 90 days in arrears and foreign currency denominated loans.

Q2: Do I need to call the bank for the enrolment? Any documents needed?

The enrolment will be automatic for eligible borrowers, no documents or enrolment phone call needed.

Q3: Can I ask for more than six months deferment?

The deferment is only limited for six months. It’s better for individuals to contact their banks to make special arrangements if they require a deferment of more than six months.

Q4: Will my CCRIS records be affected if I accept the deferment package?

No. However, interest or profit will continue to accrue on loan or financing repayments that are deferred and borrowers will need to honour the deferred repayment in the future.

Q5: Which banks offer this deferment package?

All licensed banks, licensed Islamic banks and prescribed development financial institutions regulated by BNM will offer this deferment flexibility.

Q6: Can I choose to opt-out from the deferment package?

Yes. You need to contact your bank if you wish to opt-out of the automatic deferment package, or you could continue to make timely repayments of your loan.

Q7: My loan repayment is being automatically deducted from my salary, am I still eligible for the deferment package?

Yes. Please inform your company or bank to stop the salary deduction if you choose to opt-in for the loan deferment package.

Q8: If I opt-in for the deferment package, can I choose to stop the deferment anytime?

Yes, please inform your bank and continue to make timely repayment of your loan.

Q9: I have a few loans but I only want the repayment deferred for a certain loan, what should I do?

Please contact your bank and inform them about the account that you would like to be excluded from the automatic moratorium.

Q10. Does this deferment package include newly approved or disbursed loans?

Yes. It applies to all loans or financing outstanding as of April 1, 2020.

Q11. What happens to my loan/ financing payments after the deferment period? How does being in the deferment package affect my interest payments after the six-month period?

For conventional loans, interest will continue to be charged on the outstanding balance comprising both principal and interest portions (i.e. compounded) during the deferment period. However, some financial institutions may decide not to compound interest during the deferment period. For Islamic financing, profit will continue to accrue on the outstanding principal amount. Such profits, however, will not be compounded in line with Shariah principles.

Resuming payments after the deferment period may mean higher subsequent instalments while preserving the original loan/financing tenure, or an extension of the loan/ financing tenure after the six-month moratorium period. Please call your financial institutions to check.

Do you have more questions? Let us know on our Facebook!