Prime Minister Tan Sri Muhyiddin Yassin today announced that the six-month bank loan moratorium, due to end on 30 September, will be given a three months extension specifically for individuals who have lost their jobs and have yet to find new employment due to the COVID-19 pandemic.
The Prime Minister added that banks will also be able to offer further extensions after the end of the additional three months, depending on the individual situation.
Meanwhile, individuals who has had their income reduced due to the ongoing health pandemic, their monthly repayments will be reduced in tandem of their salaries, depending on the type of loans.
“For example, for home or personal loans, monthly repayments will be reduced at the same rate as your salary cut. This assistance is for at least six months, and extensions can be given depending on the individual’s salary situation”, said Muhyiddin Yassin. However, no specific reduction ratios were provided for other forms of loans.
The reduction will be applicable for a period of at least six months, and can also be extended by the banks based on the status of the individual’s salary at the end of the extension period.
Specifically for hire-purchase loans, which is applicable for our car purchases, the government said that banks have given their commitment to offer individuals the ability to reschedule their monthly repayments in accordance to the Hire Purchase Act. For example, individuals will be able to lower their monthly repayment amount in exchange of a longer loan tenure period.
As for small medium enterprises (SME) and self-employed individuals facing difficulties with their finances due to the COVID-19 pandemic, banks are able to provide reliefs based on individual arrangements, including only paying the interest portion of the loan repayment for a certain time period, extending the overall loan tenure to reduce monthly repayments, and other reliefs until the borrower is financially stable to make repayments.
According to the Prime Minister, approximately three million individuals and SMEs are set to benefit from the extension of the bank loan moratoriums. Individuals eligible can contact their respective banks to apply for the extension starting 7th August 2020.