All You Need To Know About Malaysia's Loan Moratorium 2021!

PropertyGuru Editorial Team
All You Need To Know About Malaysia's Loan Moratorium 2021!
*Updated on 7th July to include information and clarification on the PEMULIH moratorium.
In light of the Government’s Movement Control Order to curb the spread of the novel coronavirus (Covid-19) pandemic, many have been left worried about their loan repayments and financing.
With the current restriction on movement, many individuals and businesses were affected by the pandemic, which is when Bank Negara Malaysia (BNM) stepped up efforts by introducing multiple measures.
One of them is financial relief in the form of an automatic moratorium or also known as a deferment package for all loan/financing repayments/payments, principal and interest (except for credit card balances) for individuals and small and medium-sized entrepreneurs (SMEs) borrowers/customers for a period of six months from 1st April 2020.

PropertyGuru Tip

A moratorium is the stopping or delay of something for an agreed period of time

To simplify it, according to BNM, during this period, borrowers/customers with loan/financing that meet the conditions do not need to make any repayment, and no late payment charges or penalties will be imposed.
While the first version ended in 2020, the Malaysian government came up with another version of it in July 2021, in order to continue assisting those in need. Let’s take a closer look!

PEMULIH Loan Moratorium In July 2021

On 28th June 2021, the Prime Minister announced a RM150 billion COVID-19 relief spending, and the reintroduction of the loan moratorium (beginning 7th July 2021) was one of the measures.
This time around, the six-month plan was slightly different as it allowed borrowers (no matter whether individuals, microenterprises or SMEs) to apply without providing supporting documentation.
In addition, there are no longer any terms and conditions like reduction/loss of income, and no prior background checks on whether you’ve lost your job.
However, it is important to note that borrowers who are approved can only choose between a three-month loan repayment moratorium or a 50% reduction in their loan repayments for six months.

What Else Do You Need To Know About The PEMULIH Loan Moratorium?

Apart from the fact that this plan is only applicable for car, personal, housing, and business loans, here are a few additional facts to take note of:
  1. This repayment assistance plan is only for loans that have been approved BEFORE 1st July 2021.
  2. When an application is made for the loan moratorium, you cannot have missed any instalment by more than 90 days, or be in the middle of a bankruptcy/winding up proceeding.
  3. Those who are already under a repayment assistance programme and are currently following that financial repayment scheme, will still be able to opt in for the PEMULIH loan moratorium.
  4. Individuals and SME borrowers who have missed their repayments by more than 90 days would be able to reach out to the Credit Counselling and Debt Management Agency (AKPK) for a customised repayment programme, and free financial advice.
  5. For those who are struggling with credit card debt (see more below), you aren’t allowed to apply for this plan, but you can opt to convert this debt to a term loan.

How To Apply For The PEMULIH Loan Moratorium?

The simplest way: Contact your bank to find out how to apply (online form, email, or phone call), read every single term and condition stated (so there are no hidden surprises), then wait for the bank to contact you (5 calendar days for individuals or 14 calendar days for microenterprises and SMEs)!

1) Here are the steps for the online form:

  • Go to your bank’s website
  • Click on the web form
  • Fill in your personal and financing details
  • Tick the boxes on the terms of the repayment assistance
  • Click ‘Send’, and your bank will acknowledge receipt

2) Here are the steps for the email:

  • Go to your bank’s website
  • Click on the email provided
  • Fill in your personal and financing details
  • Tick the boxes on the terms of the repayment assistance
  • Click ‘Send’, and your bank will acknowledge receipt

3) Here are the steps for the phone call:

  • Call your bank’s customer contact centre
  • Your call will be attended to, and the representative will guide you through the process

Who Is Eligible For The Moratorium/Deferment Package?

This relief is for SMEs and individuals (B40, M40, T20) who face temporary financial constraints arising from the COVID-19 pandemic.
Real estate concept. House on calculator. Mortgage.
Meanwhile, corporate borrowers/customers may request for a moratorium on loan/financing repayment from their respective banks as well.
There are a few points to take note of if you are one of those who are affected, as BNM has clarified some of the fundamentals about the moratorium or deferment package:



Which financial institutions offer this deferment package?
All licensed banks, licensed Islamic banks, licensed investment banks and prescribed development financial institutions (DFIs) regulated by BNM (financial institutions or FIs) will provide this deferment flexibility. Borrowers/customers that meet the eligibility criteria can avail themselves to this flexibility
Does this deferment package apply to newly approved/ disbursed loans?
It applies to all loans/financing that have been approved BEFORE 1st July 2021.
Would my loans with other non-bank credit providers qualify for this deferment package?
No. Other non-bank lenders or credit providers that are not regulated by BNM are not participating institutions in this package.
How is the deferment package different from the other loan/financing moratoriums announced by the banks?
Financial institutions (FIs) have been proactive in responding to the needs of their borrowers/customers with various rescheduling and restructuring packages offered to assist affected borrowers/customers. Such efforts are highly commended and encouraged to continue.
The deferment package is an extension of these measures across all FIs to widen access to short-term financial relief by households and businesses that need it the most in these challenging times.
Will I be charged additional interest on the repayment amount that is deferred by 6 months during the period?
For conventional loans, interest will continue to be charged on the outstanding balance during the deferment period.
For Islamic financing, profit will continue to accrue on the outstanding principal amount. Such profit, however, will not be compounded in line with Shariah principles.
In addition, FIs are not allowed to impose late penalty charges on the deferred amount. In other words, the loan/financing payment is just deferred by 6 months.
What would happen to my loan/financing repayments after the deferment package period? How does being in the deferment package affect my interest payments after the 6- month period? Is there an increase in monthly payments, or longer tenure?
Borrowers/customers are reminded to carefully consider the payment options proposed by their FI, in particular on how to resume payments after the deferment period.
This may include higher subsequent instalment amount while preserving the original loan/financing tenure, or an extension of the loan/financing tenure after the 6 month deferment period.
Borrowers/customers should make sure they understand the overall financial implications and their ability to meet these and should reach out to their FIs via calls/e-mails if more information is required.
If I opt for the deferment, will my CCRIS/CTOS records be adversely affected?
No. Your CCRIS/CTOS will not be affected during the deferment period. It will remain similar as per the status as at July 2021 throughout deferment period.
I want to continue with my loan/financing repayments. How do I opt-out of the automatic deferment package?
You should contact your bank if you wish to opt-out of the automatic deferment package, or continue to make timely and full repayment of your loan/financing.
My loan/financing is in default, can I qualify? Can loans under rescheduling and restructuring (R&R) program be eligible for the deferment package?
Loans/financing accounts that are already more than 90 days in arrears, will not qualify for the deferment. Borrower/customers are advised to approach their banks to seek assistance. Loans/financing under R&R program will be eligible for the deferment, subject to meeting the criteria.
I have a loan/financing which is automatically deducted from my salary. Do I qualify for the deferment?
Yes. However, if you wish to opt-out of the deferment and continue paying your loans/financing via your existing autodebit arrangement, please inform your FI accordingly.
What would my housing loan/financing monthly payment look like after the 6 months deferment period?

Monthly instalment before deferment

Monthly instalment after deferment

(RM33 increase)

The above illustration of a conventional housing loan is based on these assumptions:
  • No extension of tenure after deferment period
  • Loan amount – RM300,000
  • Interest rate – 4.6% p.a. (interest not compounded during deferment period)
  • Original tenure – 35 years, and borrower has repaid for 5 years
  • Principal and interest payments suspended during deferment period
  • Outstanding principal before deferment period – RM280,585
  • Outstanding amount post-deferment to be repaid within original tenure timeline (30 years) = RM287,038

Monthly instalment before deferment

Monthly instalment after deferment

(RM33 increase)

Monthly instalment before deferment

Monthly instalment after deferment

(RM33 increase)

My loan/financing is under AKPK’s Debt Management Programme (DMP). Do I qualify for the deferment?

Yes. Similar to other loans/financing with FIs, interest/profit will continue to accrue on loan/financing payments that are deferred. Borrowers/customers are advised to contact AKPK to discuss options available to borrowers/customers under the DMP.

What Banks Offer The PEMULIH Loan Moratorium?

Man is hate and sad with the white mail message or the bill.
*We highly suggest you refer to your bank for the latest details and accurate instructions.
For corporate borrowers/customers, banking institutions are strongly encouraged to facilitate requests for a moratorium on loan/financing repayment/payment in a way that will enable viable corporations to preserve jobs and swiftly resume economic activities when conditions stabilise and improve.

What About Credit Card Debts?

For credit card bills, banks provide the option of converting outstanding credit card balances of cardholders, regardless of the income levels of the cardholders.
The Association of Banks in Malaysia (ABM) and Association of Islamic Banking and Financial Institutions Malaysia (AIBIM) has stated the following:
“For credit card facilities, banks will offer to convert the outstanding balances into a three-year term loan/financing with reduced interest/profit rates to help borrowers better manage their debt.”
In short, your card issuer will convert your outstanding balance into a term loan of up to 3 years (36 months), at an effective interest rate of not more than 13% per annum.
This is only applicable for cardholders who are unable to meet the minimum monthly repayment consecutively for the last 3 months.
If you are worried of not being able to use your credit card during this time, BNM clarifies that you can continue to use it 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.
In addition, the monthly term loan/financing instalments will then form part of the minimum monthly repayment amount on the credit card.
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