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4 Things You Need to Know About BNM’s Loan Repayment Moratorium

BY Nisya Aziz

Updated 07 Jul 2021


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We don’t know who pisses 2020 and 2021 off as things have been going a little haywire - financially speaking - especially during this COVID-19 pandemic. It’s just not cute.

So, to help soften the financial impact on the rakyat, the Malaysian government has decided in March 2020 to provide monthly financial aid of RM600 from SOCSO to employees on forced unpaid leave and allow withdrawal from EPF (formerly i-Lestari and i-Sinar, now it’s i-Citra!).


What's covered in this article?

At the same time, Bank Negara Malaysia (BNM) has ordered all banks to grant an automatic six-month moratorium (deferment) of all loan/financing repayments (including hire purchase) from April to September 2020. It is to provide some relief to individuals and businesses who face temporary financial constraints arising from the global pandemic.

In short, you don't need to make any repayment during this time.

Then, the government also decided to extend the moratorium period for a few targeted groups such as individuals that have lost a job and still looking for one and that have their salary deducted due to COVID-19 for 3 and 6 months respectively. They also provide a more flexible repayment - a case-to-case basis.

Starting from 7 July 2021, all individual borrowers can enjoy the moratorium for a 6 months period. This also includes borrowers who are from M40 and T20 income groups. You just need to apply and you’ll get automatic approval within 5 days for individual borrowers and 15 days for SMEs borrowers (only have to sign an agreement when needed!).

Besides that, all micro-entrepreneurs also can get the moratorium without any requirements which previously was loan amount is below RM150,000. As for SMEs, they can also apply but it’s up to the bank to do its checking before the approval.

P/s: In case you guys are unable to apply for the moratorium, can contact BNMTELELINK HERE.

Now, before you hippity hip hooray, please understand what BNM’s Loan Repayment Moratorium is about and the consequences that come with it.


1. It’s back to be automatic approval!

Before this, don’t have to pening one... all individual and SMEs with conventional loans or Islamic financing repayment obligations that meet the below criteria will automatically qualify for the loan deferment:

  • No defaulted loan repayment for more than 90 days as of 1 July 2021 (you’re advised to approach your banks to seek assistance if you have);
  • Denominated in Malaysian Ringgit.

Meanwhile, if you’re one of the corporate borrowers/customers, you may also request a moratorium on loan/financing repayment from your respective banks.

As for those who don’t want to partake in the automatic deferment package and want to continue to make timely and full repayment of your loan/financing, can just proceed with the payment.

HOWEVER, with this moratorium, you’ll need to apply to your respective bank beginning 7 July 2021. No worries for those that have loans with multiple banks, you can drop by to the relevant “one-stop" centre to work out what to do:

  • Individuals: Agensi Kaunseling dan Pengurusan Kredit (AKPK)
  • SMEs: Small Debt Resolution Scheme (SDRS)

2. You will pay more interest by deferring your loan.

Although the banks aren’t allowed to impose late penalty charges on the deferred amount, interest still jalan, you know. Because… banks still need to make money maaa. So, this is something you’ll need to think about because it only means that you’re going to fork out more money later. 

Here’s the breakdown:

  • Conventional loans: The interest will continue to be charged on the outstanding balance. It comprises both principal and interest portions (i.e. compounded) during the moratorium period.
  • Islamic financing: The profit will continue to accrue on the outstanding principal amount, but will not be compounded in line with Shariah principles. 

So, take note that the interest/profit will continue to accrue on loan/financing repayments that are deferred. This means accumulated repayment amount during the deferment of the repayment period will be added to the outstanding loan/financing amount.

Additionally, BNM suggested you guys discuss the suitable workout plans to repay the principal and interest accumulated during the said time because there’ll be an increase in monthly payments or longer tenure - probably extended by six months.


3. It doesn’t apply to credit card balance, but... 

… your card issuer will automatically convert it into a term loan of not more than 3 years at an effective interest of not more than/financing 13% per annum. However, this is only for those cardholders who are unable to meet the minimum monthly repayment consecutively for the last 3 months, regardless of the income levels of the cardholders.

Do know that you can continue to use the credit card up to the remaining credit limit after taking into account the balance converted into a term loan/financing. The outstanding balance converted into the term loan/financing is treated as part of the credit card limit. 

To add, the monthly term loan/financing instalments will then form part of the minimum monthly repayment amount on the credit card. 


4.  Your CCRIS records will not be affected.

No, it will not because BNM yang initiated this temporary deferment, not because you don’t want to pay. But, maybe after the deferment period, it can get affected. How come? Because the interest/profit will continue to accrue on loan/financing repayments that are deferred - remember?   

So, as a borrower, you’ll need to honour the deferred repayments in the future. If not, rosak lah your CCRIS. You better call your bank to discuss the options available to resume repayments after the deferment period without affecting your everyday finance. 

If you want to know more about credit scores, read 11 Things You Might Be Doing That May Hurt Your Credit Score.

SIDE NOTE: The information shared is based on BNM's FAQ. If you have any questions about this initiative, please contact your bank first or refer below banks' FAQs:

If that still doesn't answer your question, please visit BNM's website at or contact TELELINK by calling 1-300-88-5465. 




*The above article is intended for informational purposes only. Loanstreet accepts no responsibility for loss that may arise from reliance on information contained in the articles.

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About the Author

Nisya Aziz

A storyteller at Finology, who drinks coffee like its water, Nisya enjoy bringing valuable, educational and entertaining content to others. When not busy crafting content, you’ll find her in the boulder gym or on stage, performing theatre shows.


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