What will happen if I take the six months moratorium for my home loan?


These are the things that will or might happen if you take the six months moratorium for your Home Loan.

1. You are not required to pay monthly installments for six months.

It also means you are not paying interest and principal to your home loan.

2. Your bank will still charge a monthly interest to your home loan.

3. But, the bank will not charge any late interest on that.

4. Your CCRIS report will also not be affected because of non-payment.

5. Most banks agreed not to charged compounded interest during the six months moratorium. Meaning there is no interest on interest.

For example,

Outstanding balance RM500,000.

The monthly interest is RM2000.

The new outstanding balance is RM502,000.00.

In a normal situation, the bank will calculate based on RM502,000 (latest outstanding balance) and not RM500,000. If that the case, the interest will be higher than RM2000.

The bank will only calculate interest based on RM500,000 outstanding balance, which is RM2000. And the interest will be the same for six months.

For instance,

April interest charged RM2000.

May interest charged RM2000.

June interest charged RM2000.

July interest charged RM2000.

Aug interest charged RM2000.

September interest charged RM2000.

Total six months interest charged RM12,000.

And no additional interest charged for the RM12k.

6. According to the banks, after the six months moratorium period ends, they might increase the installment or extend the tenure of the borrower. And the borrowers are advised to check with the bank on the arrangement.

7. If you read our latest article about the six months moratorium, we would advise our readers to payback the six months installment if they’re capable of doing so. This is to avoid any compounded interest being charged for the balance tenure.

Read the article here:

We do still have our doubts and questions about the whole process.

For instance,

a. Will there be a compounding interest on the total interest (RM12k) after six months?


b. Will this RM12,000 interest compounding over the balance tenure of 20 or 30 years and become something MORE?

We do hope to get a clearer picture from the banks, but the bank’s hotlines are busy all the time. But, if you do have a chance to talk to your bank, don’t forget to ask these questions.

We hope this helps to answer some of your questions.





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