On June 28, prime minister Tan Sri Muhyiddin Yassin announced a six-month bank loan repayment moratorium for all Malaysians. It’s similar to what was offered in the first round of the movement control order last year, and applications are now open.
While financial institutions have continued to provide targeted loan assistance to individuals impacted by Covid-19 and movement control orders, under the latest Pemulih plan, the moratorium is for everyone – that’s right, from the B40 segment to even the country’s top 20% earners, and micro entrepreneurs.
CIMB’s Covid-19 relief measures and support page has now gone live, and here we take a look at what’s required, with a focus on car loans.
Basically, the bank offers deferment of instalments for three or six months, and customers can choose one. If you have more than one loan account, you’ll need tell the bank which one (or all) you want to enter the programme. CIMB can be contacted at 03-62047788 or [email protected] Depending on where you’re at, some branches may be open, but opening hours have been reduced – check before you head there. One can apply via this eForm.
So, the details. First, you will need to remember that the moratorium is not a loan waiver – you’re not getting three or six months “free rental”; instead, your payment has been deferred, and the loan tenure will be extended by six months as a result. Note that the total interest paid is higher as a result of the tenure extension.
CIMB’s example scenario above is a seven-year car loan at 3% interest rate. The remaining sum is RM37,081 and the borrower’s monthly payment is RM529 per month. Those who take the six-month moratorium will pay a total of RM12,972 in total interest over the loan tenure, as opposed to the original RM12,150 – that’s a difference of RM822. If you pay off your loan early, this additional interest due will be prorated.
This additional RM822 of interest will have to be paid at the final month of your loan tenure, which will total RM1,351 (529 + 822). This is opposed to spreading it out over monthly payments after the moratorium ends. For convenience, you’ll pay the same RM529 that you remember after the six-month pause ends. Pretty straightforward.
So, do opt-in if you need the assistance, but be fully aware that doing so incurs additional interest charges. Also note that this extra interest is from the loan extension and it’s not compounded. Of course, it will vary according to your loan amount, remaining tenure and the agreed interest rate.
Unlike targeted assistance, one does not have to furnish proof of a paycut or job loss – no documents are required. While it’s open to all individuals, and approval is automatic, borrowers still need to apply with the bank and sign the amended loan agreement form because things have to be on paper, in black and white.
Don’t be put off by the application process, because approval will be automatic for individual borrowers. Small and medium enterprises (SMEs) can also apply, but for companies, it’s subject to review by the banks and not automatic. Also, another important point is that accepting the loan pause will not affect an individual’s CCRIS status and rating, so proceed with peace of mind.
If you want to apply, contact CIMB and they will get back to you within five days to arrange for the signing of documents. By default, the loan pause starts the following month after your application, but if you wish for it to start in July, do let the bank know. Also, if you’re already on a payment assistance programme, you can switch to this, but you’ll need to talk to the bank about it.
CIMB also mentions that this programme applies to newly approved/newly disbursed car loans as well – you can apply the same way. Contact CIMB via phone or email (details above) if you need more info, and you can walk into a branch if you wish. You can apply via this eForm.
Source: Read Full Article