SEARCH

FAQs on loan/financing deferment measure

25 Mar 2020 / 14:04 H.

1. What is deferment of loan or financing repayment?

It is a temporary deferment or suspension of loan/financing repayment obligation (principal and interest) for a limited period of time. 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.

Interest/profit will continue to accrue on loan/financing repayments that are deferred and borrowers will need to honour the deferred repayments in the future. Loan repayment resumes after the deferment period.

2. Do I need to apply?

No. All individual and SME loans (excluding credit cards) that meet the criteria will automatically qualify for the deferment.

3. My loan 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 is also eligible for the deferment subject to meeting the criteria.

4. Will I be charged additional interest on the repayment amount that is deferred by six months during the period?

For conventional loans, interest will continue to be charged on the outstanding balance comprising of both principal and interest portion (ie compounded) during the moratorium period.

For Islamic financing, profit will continue to accrue on the outstanding principal amount. Such profit however will not be compounded in line with syariah principles.

Banks are however not allowed to impose late penalty charges on the deferred amount. In other words, the loan repayment is just deferred by six months.

5. What would happen to my loan repayments after the deferment package period? How does being in the deferment package affect my interest payments after the six-month period? Is there an increase in monthly payments, or longer tenure?

Interest/profit will continue to accrue on loan/financing repayments that are deferred. This means accumulated repayment amount during the deferment of repayment period will be added to the outstanding loan amount.

Borrowers are advised to contact their banking institutions to discuss on the suitable workout plans to repay the principal and interest accrued during the deferment period. This may include higher subsequent instalment amount or an extension of the loan tenure.

6. How should I notify the bank that I wish to opt-out of the deferment offer?

Please respond to the notification sent by the bank and informed that you wish to opt-out of the automatic deferment package, or continue to make timely and full repayment of your loan/financing.

7. Can credit cardholders who have converted their card balances into a term loan immediately ask for six months deferment of loan or financing repayment package?

Yes, they can. Loan repayment resumes after the deferment period.

8. If my credit card outstanding balances is converted to a term loan, can I still use my credit card?

Yes, you can continue to use the credit card up to the remaining credit limit after taking into account the balance converted into a term loan. The outstanding balance converted into the term loan is treated as part of the credit card limit. In addition, the monthly term loan instalments forms part of the minimum monthly repayment amount.

email blast