The Malaysian government recently announced the 3 months loan moratorium extension and targeted bank assistance update. This directly benefits SMEs, individuals who lost their jobs and those who have had their salary cut due to COVID-19 pandemic. Read more to find out how you can apply for this extended moratorium.
If you’ve been reading the news, chances are you’d have heard about the recent COVID-19 moratorium extension. But what is the extension about, and does it apply to you? In this article, we’ll dive into what was announced and guide you on how you can apply for the extension.
What is the Malaysia COVID-19 Moratorium on Loans?
A moratorium is a time period in which payback on loans can be suspended. To help ease the financial burdens of the people, the Malaysian government and Bank Negara Malaysia introduced the 6-month COVID-19 loan moratorium on 1 April 2020, originally scheduled to end in September 2020.
(Latest Update) On 29 July 2020, the government officially announced a 3 months loan moratorium extension (ends December 2020). Unlike the former, this will be a target bank assistance for a select group of borrowers.
3 Months Loan Moratorium Extension: Who is it for, and what reliefs will they get?
Individuals who lost their jobs in 2020 and are still unemployed:
- Loan moratorium extension of another 3 months
- Banks may further extend this at the end if they are still unemployed
Individuals who are employed, but salaries affected due to COVID-19:
- Loan instalment reduction, proportionate to their salary and depending on the type of loan
- At least 6 months
- Potential extension at the end, depending on their salary
Hire purchase (loan borrowers):
- Affected borrowers will be offered revised instalment schedules according to the Hire-Purchase Act 1967
Affected individuals and SME borrowers can receive flexibility depending on their specific circumstances. This includes:
- Paying interest-only for a period of time
- Lengthening overall period of the loan to reduce monthly instalments
- Providing other forms of flexibility until the borrower is in a more stable position
TIP: If you don’t fall under any of the above categories and have the means to pay off your debt, it would be best to start paying now. This will reduce your overall debt and borrowing cost.
Read also: 7 Strategies To Get Out Of Debt Fast During The COVID-19 Pandemic
How can you apply for the COVID-19 moratorium extension?
Speak directly to your bank from 7 August 2020.
What can you do if a suitable repayment plan cannot be agreed upon?
- Head over to Agensi Kaunseling dan Pengurusan Kredit (AKPK) for a chat with a counsellor. (Website: https://www.akpk.org.my/ | Phone: 03-2616 7766)
- Look for the Small Debt Resolution Scheme (SDRS) by Bank Negara.
- To get started, obtain the application form from your participating financial institution (PFI), SMEinfo.com.my, or BNMLINK / BNM Regional Offices.
- Then, complete and submit it to your PFIs or BNMLINK / Regional BNM Offices.
TIP: It’s also good to note that if you were to opt-in for this extension, it will not appear in your CCRIS report.