Knowing Your Loan Moratorium Inside Out
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According to The Association of Banks in Malaysia (ABM) and the Association of Islamic Banking and Financial Institutions Malaysia (AIBIM), banks will continue to extend repayment assistance, including an extension of the existing moratorium (where applicable) to individuals affected by the Movement Control Order (MCO).
On 25th March 2020, Bank Negara Malaysia (BNM) had announced several regulatory and supervisory measures to support banking institutions to assist individuals, small and medium-sized enterprises (SMEs) and corporations to manage the impact of the Covid-19 outbreak. An automatic deferment of all loan repayments for a period of 6 months, effective 1st April 2020 was then implemented throughout Malaysia.
However, the deferment targets only deserving borrowers who may be financially challenged in the short-term.
Thus, the blanket moratorium granted is not for those who have already defaulted before the Covid-19 impact and took advantage of the assistance.
While the extension of the loan moratorium is no longer automatic, individuals who are still in employment but have experienced a reduction in income due to the Covid-19 pandemic may apply to lower their instalment amount in line with their income reduction.
The Prime Minister announced a 3-month targeted moratorium extension from October 2020 to December 2020 and a further 3-month extension from January 2021 – March 2021 to help ease their burden and help with their cashflow. If you have opted for the moratorium up to March 2021, please take note that your payment assistance will expire by the end of the month. However, those who are still in need of assistance can seek advice from their respective banks.
Banks have been directed and given the authority to help restructure or reschedule customers’ loan repayment. So, fret not if you are struggling to service your loans.
The payment assistance is still available for those affected until 31st December 2021.
We believe that BNM’s deferment program is beneficial for all Malaysians currently servicing any form of loans or financing plans, it is advisable to check with your respective banks on the current status of your loans and seek any possible targeted payment assistance, if necessary. The banks are here to assist us with our cash flow during these difficult times. So, take advantage of this opportunity and head down to your bank to ask them what they can offer you, explore how the interest rate is calculated and understand how you can enjoy servicing your loans with the best interest rates.
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