In these trying times, if you’re a home loan borrower and would like to know if a bank deferment is a good or bad idea for you, we’ve summarized the following information for your convenience.
What does it mean by a deferment of loan/ financing repayment?
In light of the COVID-19 pandemic, Bank Negara Malaysia (BNM) has come to a decision to grant an automatic loan deferment campaign for six months. This is to help Malaysian borrowers who may be facing issues with regards to paying their monthly installments in the months to come.
1. During this period, all loan & financing entitle for this moratorium (only those loan 90 days arrears not entitle) do not need to make any installments, and no late payment charges or penalties will be imposed.
2. The moratorium is an automatically applicable period from 1 April 2020 until 30 September 2020.
3. It won’t affect your credit score/ CCRIS records. It is only affected if you are late or have missed a payment once you’re back on the regular installments schedule.
4. Would the interest still continue to be charged on the outstanding balance? Yes.
Now let’s say you have a remaining balance amount of RM500,000 @ 3.75% per annum interest rate, the six months balance can be different up to about RM13,000.
Let’s take a look at the calculation comparison example:
If you have the capability to continue paying for your house, you should stick to the schedule as the loan deferment campaign is not a kind of waiver, your loan interest will continue to accrue for these six months of the moratorium and get added to your outstanding amount. Therefore this may increase your burden after the moratorium.
For the individuals or families facing problems with regards to cash flow or are in need of cash flow during this period, the loan deferment would help to lessen your financial burden on loans to be spent more on food or essentials.
The good news is, as of today (30 March 2020) there are certain banks that have decided to not accumulate interest, such would help those who are in need of cash to have additional funds for an emergency or necessities.
Remember that campaign is automatically applicable to everyone affected; contact your bank if you would like opt-out of this automatic deferment campaign.
Click here for FAQ by Bank Negara Malaysia (BNM)
Check with your bank for more details or chat with our sales advisor 012 5008018 for expert financial help to assist you to plan for the future. Stay safe and stay in touch!