Moratorium – it’s a word that some still struggle to pronounce let alone understand what it fully means.
Yet, it has been bandied around after Prime Minister Tan Sri Muhyiddin Yassin announced in March a six-month moratorium (April 1 to Sept 30) as Malaysians suffer the wrath of Covid-19.
While it has been close to two months since the announcement was made (and some confusion that arose in between), borrowers continue to call banks to get a clearer picture of the status of their loans.
Many, however, often end up frustrated or are made to wait for hours as most call centres are working shorter hours with a skeletal crew throughout the Movement Control Order and cannot attend to every single call.
This has even led to several Twentytwo13 readers calling us up asking for clarification, mainly regarding hire-purchase.
Twentytwo13 has compiled a list of FAQs on hire purchase loans from various financial institutions, including Bank Negara Malaysia, to address the common questions.
What is a moratorium?
Let’s start by learning how to pronounce it properly – mo·ruh·taw·ree·uhm. In the current context, it basically means to ‘temporarily defer’ loans or financing repayments to a later date.
How long is the moratorium?
The moratorium automatically took effect on April 1, 2020 and is over a period of SIX months (till Sept 30, 2020).
My friend got an SMS from the bank saying he is eligible for the moratorium but I’m not eligible. Why?
Perhaps your friend has been paying his instalments on time and you have not paid yours for three months (90 days), regardless over a period of three consecutive months or otherwise. If you have been paying on time, it’s best to check with your bank.
But I really don’t have any money. I’ve just lost my job and I’m not eligible for the moratorium.
You need to quickly consult your bank.
My uncle wants to buy a car tomorrow. Will he enjoy the moratorium?
The moratorium will NOT be automatic for loans disbursed after April 1, 2020 but you may apply for it and is subject to the banking institution’s assessment and approval.
My sister has an existing car loan. Does this mean she does not need to pay her instalments for six months?
You DO NOT need to pay your monthly instalments from April 1 to Sept 30 if you are eligible for the moratorium. However, you can continue paying your loan if you want to. Just contact your bank and tell them you do not want the moratorium.
But my neighbour said that if I take the moratorium, I will end up paying more to the banks?
There was some confusion regarding this but the matter has been laid to rest by the Finance Ministry. In short, there will be NO additional charges. For example, you are servicing your loan of RM575 a month for a loan tenure that ends in December 2020 and you are eligible for the moratorium. You now DO NOT need to pay from April 1, 2020 to Sept 30, 2020. Your loan tenure, however, will now end in June 2021.
I have three loans with the bank. I’ve paid two on time, but I’ve been struggling to pay for the third which has now defaulted to three months. Will this be a problem?
The moratorium is applied on a per facility basis. Basically, each loan stands on its own. So you should automatically receive a moratorium for two loans.
I don’t want the moratorium. What should I do?
Different banks have different methods of cancelling the moratorium. It’s best you contact your bank for details.
Am I able to reinstate the moratorium later after choosing to opt out?
You need to contact the bank. Once again, different banks will have different ways of approaching this but generally, you may apply to reinstate the moratorium within the period but it will be subject to the bank’s approval.
If I still have difficulties paying my instalments after the moratorium, what should I do?
Reach out to your bank and inform it of your difficulties.