The Consumers’ Association of Penang (CAP) raised a word of caution from Bank Negara Malaysia, that any appeal for an extension after the current six-month period will be based on the restructuring of the loan on a case-to-case basis by respective banks.
“We urge consumers who really need to restructure their loans to approach their respective banks soonest possible, to re-negotiate their loans before the moratorium deadline on September 30. Do not to wait until the last minute to appeal as immediately after the deadline, any non-payment of loans will be considered as default in payment and starts to accrue interest which can be exceedingly painful,” CAP said in a statement.
It also said that those with more than one loan and from various banks, can consult he Credit Counselling and Debt Management Agency (AKPK). The agency can counsel, or if required, restructure multiple loans of a borrower, to safeguard the person’s financial well-being, it added.
CAP also highlighted that Bank Negara Malaysia had lowered interest rates by 0.25 percentage points, from 2% to an annual rate of 1.75%.
“The lowering of interest rate for housing loans should benefit those in the Bottom 40 (B40) and M2 category of Middle 40 (M40) group. The government also recently raised the B40 category to a maximum family income of RM4,849 from RM4,360 and divided the M40 group into four categories, from M1 to M4. The M2 category of the M40 group comprise those earning between RM5,880 and RM7,099,” said CAP president Mohideen Abdul Kader in the statement.
However, he pointed out that the reduction in interest rate should not be used to push for house purchases, considering the current uncertain times. Instead, Mohideen said developers should seriously consider renting out unsold units or take the rent-to-own approach, to significantly reduce the overhang. “It will be much safer for all parties concerned: the developer, the bank, and the tenant.”
Meanwhile, he urged the government to introduce a Residential Tenancy Act, which can provide legal protection for both landlords and tenants. He also proposed the establishment of a Tribunal to handle tenancy disputes in every state after the introduction of the Residential Tenancy Act.
“The Tribunal will give tenants the confidence to rent out their premises as they can tun to the Tribunal should tenants violate their tenancy agreements. At the same time, the Tribunal can also protect tenants from unjust landlords,” he added.
