Additional Charges Waived for Hire Purchase Loans Moratorium
Gain insight on how Malaysia’s Ministry of Finance announced latest changes to hire purchase loan and Islamic Financing moratorium affects you.
Banks have now agreed to waive the additional interest or profit charges imposed on installments for hire-purchase loans for the six-month moratorium, as announced by the government.
According to Malaysia’s Finance Minister, Tengku Datuk Seri Zafrul Tengku Abdul Aziz in a statement:
The total amount for hire-purchase loans, both conventional and shariah will not change.
No compounding will be imposed.
Nor will the loan accrue interest during the six-month moratorium.
He added that the decision was made after discussions with the banking industry player.
“Borrowers must resume their loan repayments as usual based on the terms of agreement with their respective banks. This includes an additional six months to the total repayment schedule if they want to opt for the moratorium,” Tengku Zafrul added in his statement.
Banks will released further information regarding this matter and he hoped that this will help reduce Malaysians burden during these tough times.
The announcement is expected to put a stop to the heated debates that started over the weekend, on whether banks should impose additional charges for the six-month period from April to Sept 30.
Previously, Zafrul suggested that the financial institutions waive any accrued interest or profit imposed with respect to the moratorium period.
On Sunday (May 3), Agrobank, a development bank under the purview of the Minister of Finance Inc, announced it would do exactly that for all eligible individuals.
Make Good Financial Decisions Based on Your Needs
For individuals who don’t have any emergency savings, unstable source of income/salary, income affected by the Covid-19 pandemic, or have high interest debt e.g credit card debt, do opt for moratorium and use this opportunity to clear your debts and build up your emergency savings.
If you are still wondering what action needs to be taken for your financial planning, do consult a licensed professional for insights on actions you can take to improve your cashflow and finances.