Bank Negara Malaysia has put a six months moratorium on the repayment of personal loans and financing. By now, you must have noticed that the period will be ended soon.
As you already need to continue paying your financial loans, there must be a few financial terms in your loan repayment conditions that you’re not familiar with. One of it is “rescheduling & restructuring (R&R)”
R&R is a form of aid given by banks for their customers. It helps avoid borrowers from defaulting on a loan. If you’re worried R&R will leave a mark on your credit health, BNM has stated that taking up the post-moratorium R&R aid will not be recorded on your CCRIS report.
Rescheduling & Restructuring (R&R) aid is for borrowers who have financial difficulties
R&R packages are a commonly provided service for consumers. It’s focusing more o consumers facing extreme financial difficulties as in losing their source of income and couldn’t afford to pay their loans.
Many banks offer R&R on their own, however, many consumers who are having financial difficulties also get them via agencies such as Agensi Kaunseling & Pengurusan Kredit (AKPK).
Rescheduling helps extending your loan tenure to give you more space
R&R consists of two parts and normally consumers only need one of the two options given – either rescheduling their loans or restructuring.
Rescheduling refers to the extending or lengthening of your loan tenure – resulting in a revision of the monthly installment amount. Meaning, you’ll get to pay a lesser sum each month.
This is a good option as it will give you more space as in lowering your installment commitment. But, keep in mind that it will result in you paying more interest as your loan will take more time to be settled.
Restructuring includes a significant change to the terms and conditions of your loan
Restructuring on the other hand, involves changing the type or structure of your loan in order to help you improve your current cash flow. For instance, the bank will convert your overdrafts to term loans.
Different than rescheduling, this option typically includes a more significant change to the terms and conditions of your existing loan. Moreover, you may also incur add it administrative and legal costs on top of the existing interest charge.
If you are still curious about the rescheduling & rescheduling aid, please refer to the BNM official website.