So, who are these extensions for?
Unfortunately, the extension is not for everyone. It’s only for a few targeted groups which are for those that are still unemployed and gaji kena cut. These 2 groups are offered to extend the moratorium for another 3-month and adjust their loan repayment with their current salary for another 6-month respectively. If beyond the extension period, the banks will handle it on a case-to-case basis.
Besides that, the banks also offer some repayment flexibility for some individuals and SME borrowers. Kiranya, now they can (1) allow borrowers to pay only the interest portion of the loan over some time, (2) lengthening the overall period of the loan to reduce monthly instalments and (3) provide other forms of flexibility until a borrower is in a more stable position to resume repayments in full.
As the moratorium comes to its end, you guys might be wondering what’s next, right? What if you still need the moratorium assistance from the banks but you’re not in the targeted groups? Worry not guys, admin will help clarify the situation for you.
ALSO READ: How Bank Negara Malaysia Affects Your Loan Pricing
Here’s what your next step should be...
Case #1: You’re unemployed & suffering a pay cut
Great news, you’re included! With the loan moratorium extension kan, you’ll need to contact your banks respectively to discuss your situation. You can start calling the banks starting from 8 August until September 2020 which means you’ll still have a few weeks left.
Looking at it kan, it would be a smooth discussion for those that are unemployed if they decided to take up the extension. Why not you guys also discuss briefly on what’s next after the 3-month extension period ends. It’s like killing 2 birds with a stone.
As for those with a pay cut, you’ll also need to contact your banks to come up with the new repayment plan for the next 6 months. Once you have it, you’ll start to pay your loan way less than normal pre-Covid. You guys can also start discussing theoretically what would happen after 6-month in the meantime. Working ahead k guys!
Case #2: You’re not Case #1 people but are still struggling financially
Afraid not. With the extension announcement, our PM and gomen have assured us that the banks are open and flexible to discuss any repayment plan. Just like admin mentioned before, you could pay only the interest portion for a little time, change the loan period or other flexibilities that the banks could offer. It depends on the discussion that you have with your bank.
Therefore, pick up your phone and try to schedule an appointment with your respective banks k. Advice from admin? Better do it sooner than later.
Case #3: You have multiple loans with multiple banks.
With that said, the gomen urges you to drop by at the relevant stops centres to work out an appropriate assistance package. Having one loan to figure out at this time is already hard enough. Admin couldn’t even imagine how taxing and tiring it would be if you have multiple loans with multiple banks. Perhaps it would be better if you can talk it out with experts other than your bank officers?
For individual borrowers, you can go to Agensi Kaunseling dan Pengurusan Kredit (AKPK). Ya lah, perhaps these experts will look at the bigger picture as they would consider your situation that has several loans. Much more holistic and non-biased, they say. You’ll have to sign up for their Debt Management Programme as a way for you to come up with tangible solutions to repay your loans. As for SMEs, they’ll need to get in touch with the Small Debt Resolution Scheme (SDRS).
ALSO READ: How to Manage Your Debts for Free, the AKPK Way!
But, what happens if you can’t continue with the repayment plan? Are there any other alternatives?
Not to worry guys, there is still hope. Understandably, some of you might still have problems and difficulties financially especially in paying off your loans despite all of these options. There are other alternatives that you can opt to. You’ll just have to discuss it either with your financial advisors, banks or AKPK regarding the matter especially to see if your plan is workable or not (which is very important k!). Here are the other alternatives that you can choose:
1. Reschedule
It changes/modifies your repayment terms and conditions. Luckily, the modification is not that significant so it doesn’t change much. Usually kan, rescheduling means lengthening your loan tenure. It could also mean revising your monthly payment.
2. Restructure
You can restructure your loan by changing the terms and conditions or the type of loan. In a way, it’s like refinancing but on a much lesser scale.
EXTRA TIPS - If you need to reschedule/restructure your loan term
Our boss (Jared Lim) shared some tips on to BFM to those that have no choice but to reschedule/restructure their loan terms - we thought why not share them here. Below are what he said:
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If you have a property/assets, offer to charge it to the bank or refinance it to cover any debts that charge a higher interest.
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Don’t forget to ask for waivers for any late penalty fees and interests if you’re able to settle by liquidating/refinancing assets.
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If you are unable to do so, there are 3 things you can ask for as you’re negotiating:
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Pay interest only for a fixed period
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Extend the payback period to reduce monthly instalments
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Temporary stay on payments
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Negotiate for a stay of interests and late payment fees so that it doesn’t add up.
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Don’t borrow from “Ah Long” k (there is always another option which is bankruptcy). If you think you’re going to be bankrupt, READ THIS.
3. Debt consolidation loan
You’ll settle your loan by taking up another loan. It’s not exactly the best idea but you can settle it in just one payment with a single interest rate. One little thing though, you’ll have to make sure you can pay the new loan monthly. If not, what’s the point right?
On another note, what would happen if you decide not to pay your loans?
Well, nothing good ever comes from not following up at your ends. But for the sake to paint a picture, here are what could happen:
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You’ll end up in more debts than before (you’ll be charged with interest and penalties)
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Your credit score (CCRIS & CTOS) will be affected (read this to learn more)
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Your assets (vehicle/house) will be taken by the banks
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You may be filed for bankruptcy
Scary, right? So start getting in touch with your banks to sort your financial worries.
P/S: You can also check this information here that is provided at their respective websites. As their plans differ with one another, here’s admin make it easier for you guys:
