With the loan moratorium ending on 30 September 2020, we will need to start repaying our loans. But if you’ve been badly affected by COVID 19, you might need to extend the loan moratorium. Is that possible? 

Yes, in fact the government has asked banks to extend the moratorium to 31 December 2020 on a case-by-case basis. So, what would make a good case for banks to approve your request? We talked to banks and this is what we learned: 

1. You have lost your source of income
   If you’ve lost your source of income because you have lost your job or had to shut down your business during the MCO and still do not have an income by 30 September 2020, banks will extend your loan moratorium up to 31 December 2020.
2. If your income has decreased
   If your income has decreased (either because of a pay cut or your business isn’t doing as well), the banks will help you restructure your loans. When you restructure your loans, your monthly repayments will be reduced by the same rate as your pay cut. For example, if your income has reduced by 30%, your loan repayments will be reduced by 30%.
   BUT reducing your monthly repayments will mean that you need to repay your loan over a longer time. Depending on how your loans are structured, you may have to pay more in interest. (You can read more about how the loan moratorium affects your loan repayments here.) In both cases, you will need to prove that your income has been affected, You may have to provide the banks with your payslips and bank statements for the months before the MCO and after.
3. If your spouse has lost their source of income
   If your spouse has lost their source of income and you are finding it difficult to manage your household expenses, you can write in a letter to the banks to appeal for an extension. However this works on a case by case basis. So you will have to prove significant loss of income for your household. You may be required to send in your payslips and your bank statements too.

What do you do if you can’t pay off your loans?

1. Speak to your banks to reschedule or restructure your loans.
2. Speak to Agensi Kaunselling dan Pengurusan Kredit (AKPK) to get counseling or get into one of their debt management programmes.

If you do not fall in the categories above and you can afford it, make sure you continue paying off your loans as scheduled!