Do You Still Need To Apply For The Loan Moratorium? Here’s What You Should Know [2021 Update]

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From PRIHATIN, PERMAI, PENJANA to PEMERKASA and now PEMULIH, a series of financial assistance programmes have been rolled out to help the different industries and businesses affected by the ongoing pandemic restrictions, not forgetting all the individuals who have lost jobs and incomes.

The first six-month moratorium ended on September 30, 2020. After September 30, 2020, you were expected to resume repayment of your loans. For borrowers who were not ready to start repaying your loans, loan repayment assistance had been offered by banks since then.

Now we have the second loan moratorium which started on July 7, 2021. As part of the PEMULIH package provided by the government to help Malaysian cope with the lockdown extension, this new six-month loan moratorium is available to all individuals, microenterprises, and affected SMEs.

Who can apply

Individual borrowers only need to apply and sign to agree to the changes in the terms of their loan. Micro entrepreneurs are also eligible subject to the individual banks approval

Category	Repayment Assistance
All individuals (B40, M40 and T20)	Moratorium for 6 months. No supporting documentation needed.
All microenterprises*	Moratorium for 6 months. No supporting documentation needed.
*All SMEs adversely affected by the pandemic**	Moratorium for 6 months. No supporting documentation needed. Only self-declaration needed.

Source: Bank Negara Malaysia (BNM) As defined by SME Corporation Malaysia. Other customised payment assistance such as reduced instalments are also available under the individual banks.*

Even if you qualify to apply, first ask yourself why you should apply:

Source: BNM

What should you ask you bank

According to the Association of Banks in Malaysia (ABM), its member banks in Malaysia have started offering repayment assistance, including loan moratorium to affected borrowers.

“Under the scheme, borrowers/customers are only required to contact their banks to opt in to benefit from the moratorium and approval will be given automatically,” ABM said in a statement.

Ask the following questions and make sure you understand the impact of taking the loan moratorium or payment assistance.

Source: BNM

Similar to the last moratorium, this latest round of moratorium is applicable for loans/financing approved before 1 July 2021 and are not in arrears for more than 90 days on the date the request for moratorium is submitted to the bank.

What are the options offered by banks in Malaysia?

Banks may structure their payment assistance options in different ways. It is best to check with your bank on the options available to you for the loan moratorium in 2021.

Here’s what the main banks in Malaysia are offering in payment assistance. Follow the links below to the banks FAQs on payment assistance available for individuals and businesses.

Impact of opting-in for the loan moratorium

“Borrowers are advised that opting for repayment assistance will increase the overall cost of borrowing, as interest/profit will continue to accrue on deferred payments,” BNM noted in a statement earlier in July.

“Where a borrower requests to maintain lower instalments (instead of original instalments) after the moratorium, this would result in the loan tenure being extended for a longer period.

“Banks will not charge interest on interest, or profit on profit (i.e. compounding interest/profit), or any penalty interest/profit during the period of assistance.” BNM reminded borrowers.

Like the previous loan moratorium, taking the repayment assistance under the current six-month moratorium will not affect borrowers’ Central Credit Reference Information System (CCRIS) records.

Important points to keep in mind:

This extension is not automatic like the previous moratorium. Borrowers who want to extend their loan moratorium or reduce their monthly instalment amounts must apply directly to the bank.
If you can afford the monthly repayment now, it’s better to start paying again as the longer you delay means the loan period would be extended even more in future. As for home loans, the longer you delay paying down the loan while adding on the unpaid monthly interest charges will mean paying more in borrowing cost in future.
As for home loans, the longer you delay paying down the loan while adding on the unpaid monthly interest charges will mean paying more in borrowing cost in future.

So, borrowers who can afford to continue their loan repayments should do so.

The latest PEMULIH aid package has also provided loan moratorium options without any conditions attached so anyone can apply. But do remember that the interest on the loan amount will continue to be charged by the bank even during the loan moratorium.

Borrowers who need help to renegotiate their loans can also approach AKPK (Agensi Kaunseling dan Pengurusan Kredit) while business owners and SMEs (including microenterprises) can request for assistance through AKPK’s dedicated SME Help Desk at akpk.org.my/smehelpdesk.

If you are having trouble repaying your loans, don’t just ignore the problem as there is a lot at risk. After the loan moratorium is over, you may get late payments charges imposed by the bank and even risk having your assets seized or being declared a bankrupt.

Sign up for your free iMoney CreditScore to keep track of your loan repayments and find out whether you are in good financial health after the moratorium ends.

This article was originally published on September 11, 2020 and has been updated with current information.