Bank Negara Malaysia (BNM) has ordered all banks to grant an automatic six-month moratorium (deferment) of all loan/financing repayments – including car loans (hire purchase agreements) – from April 1, 2020, with the exception of credit card balances. What this essentially means is that you do not have to pay your home loan and car loan monthly instalments for half a year starting April, and no action will be taken against you.
While BNM’s official announcement suggests borrowers will have to apply for the benefit, separate documents and a list of FAQs issued by BNM to banking and financial institutions stated that the moratorium would be applied automatically to individuals “likely to be most affected by Covid-19.”
This offer is applicable to performing loans, denominated in Malaysian ringgit, that have not been in arrears (owing) for more than 90 days as at April 1. Additionally, the interest/profit will continue to accrue on loan/financing repayments that are deferred, and borrowers will need to honour the deferred payments in the future. To make it clear, this isn’t a total waiver of payment, but a deferment.
As such, banking institutions must ensure that borrowers are sufficiently educated on the options available to them to resume their scheduled repayments once the deferment period ends. This includes coming up with suitable repayment plans that take into account the principal amount and interest accrued during the moratorium period (if applicable), as well as the repayment capacity of borrowers. Those that do not wish or need to avail of these flexibilities can choose to continue with their current repayment structures.
In the case of outstanding credit card balances, banking institutions have been instructed to offer customers the option to convert outstanding amounts into a term loan with a tenure of up to three years and an effective interest rate of not more than 13% per annum.
For individuals that have been unable to meet the minimum monthly repayment of their credit card balances for the last three consecutive months, banking institutions can automatically convert those balances into term loans – this will be observed from April 1 until December 31, 2020.
The move is meant to ease the cash flow of individuals and SMEs that are likely to be affected financially by the Covid-19 pandemic. According to the Malaysian central bank, “banking institutions are well-positioned to do so, given the large financial buffers that have been built up over the years.” As at end January 2020, excess capital buffers above the minimum regulatory requirement stand at RM119.7 billion.
Recently, several banks have offered its customers the chance to defer loan repayments in light of the health crisis (with their own terms and conditions), but the new ruling issued by BNM technically supersedes those initiatives. The full list of FAQs related to the matter is posted below:
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Thank you PN government for the proactive initiative.
Now for the rest of us, let’s stay at home and observe MCO diligently. We can do this.
Stay safe fellow Malaysian.
Gomen shud gip RM7k a month to all Grab ehailing driver, roadside hawker and kuli batak who lost their Income source. Pity them all..sigh
lol they didn’t do anything except give u a chance to break ur piggy bank (EPF)
You think PN has did a great deal? Think again…. They reduce the EPF contribution to 7%, allow RM500 a month redrawal from EPF for next 12 months and now allow the accrual of interest by deferring the loan repayment. the poor person will be slapped by lower EPF contribution, higher EPF redrawals, lost of EPF dividend and higher interest rates and monthly repayment. Don’t be short-term thinking. Use your maths and you know that this isn’t a good deal. In fact government should look into reducing taxes, abolishment of tolls and reduce prices of controlled items.
Syabass Bank Negara gabenor, Hidup PH !
Syukur x10000 for the banking institutions, that understand the dire situation in Malaysia…..
This six-month moratoriums for who getting affected of Covid-19, is not for all Rakyat Malaysia sit at home for MCO yah!
That mean, you are entitle this benefit, congratulation.
Question – car hire purchase loans are usually fixed interest. Is there a source on whether there will be any accrual of interest or is it just a deferment of car loan payments without additional interest?
Think carefully, the interest element in the loan will continue to accrue.
For those that really need this are those that has cashflow problem due to MCO in force. I really hope they are aware that they will pay more in the long run as interest are still accrued. As for people who can still pay their loans, do continue as usual and make sure you call your banks and tell them that you will pay as usual as they might assume that you will not pay for 6 months and automatically tack on extra 6 months interest.
Hi Gerard Lye, possible you can double check, i did check with some financial company, there are not applicable for auto deferment for 6 month, it only applicable for Local bank. appreciate you can look for more info as BNM give unclear message.
Yeap, the priority is to ensure ppl have food on the table during this time of crisis
how about those on auto debit.
confirm we can stop the auto debit without risk being car towed away later?
our HP finance co should send us some notification to confirm this!
How about aeon credit hire purchase…some said have to pay
Hi, want to ask the deferment payment on hire purchase loan, as the interest is calculated into the principal upfront and converted into monthly installment, in this case of 6 months deferment period, will there be any extra interest accrued? Thanks.
Hire Purchase loans are deferred and your interest won’t be accrued. You continue paying the SAME amount set by your bank after the moratorium has ended
Interests is only accrued for housing loans.
What a disappointment with BMW Credit, We must know the different between opt from BMW Credit vs. Bank. Now we can see the different how BMW Credit treating their customer during critical time, in Chinese we say “Boh Chap” !! Next time taking car loan, do remember this incident !
(Forwarded message in Whatsapp from BMW Sale Dealer)
Dear Team, customers need to continue paying instalments, however customers can opt for deferment plan as following:
1) Option 1 : Deferment up to 3 month instalments. Borrowers /customers pay nonthing in these 3 months. Repayment resumes after the deferment period and the orignal Hire Purchase tenure will be exteded for additional 3 months.
2) Option 2 : Reschedulement of contract to help reduce current monthly instalment amount.
3) Option 3: Prioritize early settlement cases (for customers who want to reduce their loan obligations).
For option 1 & 2, customer needs to provide:
a)Proof of showing loss of sales & revenue i.e. cancellation letter, contract cancellation, etc.,
b)Proof documents to show collections have been affected from the slow down i.e. bank statement
c)Cashflow forecast how business is impacted.
d)Proof of loss in income, etc.
*Subject to management approval
Email request to: [email protected]
Haha. Greedy Germans run by C here. You know la how it goes
good everning ,may i ask is that for any bank offering automatic 6 month loan repayment deferment for individuals and smes?
Those with Tan Chong Credit Resources, are they entitled for the moratorium?