UPDATE: No interest, additional charges for car loans – pay the same instalments after 6-month moratorium!
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Breaking news! Finance minister Tengku Datuk Seri Zafrul Abdul Aziz has just issued a statement, announcing that no additional charges will be applied during the entire six-month moratorium period. So those with hire purchase car loans or fixed-rate Islamic financing will not see any changes to their instalment payments after the moratorium period ends.
In short, it’s back to a clear-cut six-month relief as most of us understood it before. For an example, if you’re paying RM1,000 per month for your existing car loan, which is due to end by say, June 2021, you will continue to pay the same amount – RM1,000 per month – from October 2020 onwards until the end of your tenure, which is now December 2021 (extended by six months to match the moratorium period). As simple as that – no extra charges, no additional interest.
This is a reversal (or a re-reversal) of an earlier announcement made by Bank Negara Malaysia (BNM) on April 30, which mentioned that additional interest would be charged on the deferred instalment payments during the entire six-month moratorium period. An example was also given, indicating a 2% increase in monthly instalment from October 2020 onwards. Thankfully, this will not take place now.
Last week, Tengku Zafrul had urged the banks to consider abolishing the accrued interest (or profit for Islamic financing) for hire purchase loans and fixed-rate Islamic financing for the six months.
“Taking into account that there’s a possibility for it to be implemented, and after considering the rakyat’s request, I would like to suggest that all financial institutions, especially those involved in the moratorium, consider abolishing the accrued interest (for HP loans) or profit (for fixed-rate Islamic financing) for the six-month moratorium period,” he said on May 2.
The former banker turned finance minister said then that MoF was taking proactive steps to find a solution for the issue via discussions with BNM and the banks, to find the best solution for the people.
This development comes after the ministry reached an agreement with the banking industry on the matter. The government says it hopes the decision will help alleviate the burden of the rakyat during these trying times.
So everyone, after the uncomfortable roller-coaster ride on this interest on moratorium period issue, what do you think of this latest (and hopefully final) update? Discuss in the comments section below.