The bank moratorium allows you to defer your loan payments from April, 2020 until September 2020 without affecting your credit history. However, for Malaysians who have lost their jobs due to Covid-19, it will be extended until December, 2020 and for those with a pay cut, they can apply to pay less monthly.
However, with only 1 month of the moratorium left, and no rumors of extension expected, what are some of important things you should be aware of?
What will happen next once the moratorium is over is, you’ll no longer be protected from the possible outcomes of not repaying your loans. Meaning, you have to continue repaying your loans regardless of what happens.
For hire purchase and personal loans, most of these loans that fall under this category have fixed interest rates. So, you’ll just have to continue the payments you were making before the moratorium implemented. On the other hand, for home and mortgage loans, these loans normally have floating balance loans. So, you will be paying off your loan for more than an additional 6 months given by the banks.
But, what if you can’t afford or ready to continue repaying your loans like before?
For this case, you can speak to your bank directly and ask for options. If you have multiple loans, you speak to Agensi Kaunseling & Pengurusan Kredit (AKPK). They will give you counseling on how to handle your loans or you could get into one of their debt management programmes.
Here’s some options repaying your loans:
- Reschedule: Rescheduling is basically extending the duration of your loan or revising your monthly payments without changing the terms and conditions of your loan agreement.
- Restructure: Restructuring is when you need to change the terms and conditions of your loan or the type of loan. For eg, from a bank overdraft to a term loan.
- Debt consolidation loan: You take a new loan that pays off all your existing loans. This may sound easy but, you’ll get to just pay off one loan with a single interest rate. You need to make sure you can afford the new loan.
What will happen if you don’t continue paying your loans after the moratorium end?
- Once you start missing payment, there will be interest and penalties charged so you’ll end up owing a lot in interest.
- When you miss payments, you’ll end up getting a bad credit score which would make it difficult to get loans in the future.
- If you have a car loan and you’re not paying, the banks/lenders will take away your car and same goes to your house, they will auction off your house if you miss payments.
- Worst case scenario, you may be filed for bankruptcy.