WITH less than two months to go before the current six-month automatic moratorium ends on Sept 30, it is timely for borrowers to consider their current and expected financial position come October so that Malaysians who are still affected by the Covid-19 pandemic can take proactive actions now.
Banks across the country have started to put in place financial relief and assistance plans in anticipation of the pandemic continuing to affect some businesses and individuals incomes after September.
After the recent announcement by the Government and Bank Negara Malaysia on the extended Covid-19 relief initiatives, Hong Leong Bank (HLB) and Hong Leong Islamic Bank (HLISB) quickly moved to announce that they have put in place additional targeted assistance for individual and SME customers who foresee some difficulties in restarting their regular payments come October under their Payment Relief Assistance Plans.
HLB group managing director and chief executive officer Domenic Fuda gives an in-depth understanding on the types of assistance customers can seek from HLB or HLISB Payment Relief Assistance Plans and how they can help based on their current circumstance.
Less than two months to go before the six-month automatic moratorium ends on Sept 30, what is the first thing Malaysians who are still affected from the pandemic should do?
We highly encourage Malaysians to assess their current financial standing to determine if their current financial position allows them to resume loan and financing repayment commitments come Oct 1.
Some things you can take into consideration during this assessment include how much income loss or pay cut you’ve experienced, are you still unemployed due to Covid-19, what level is your business operating at versus pre-movement control order, and the number and type of loan commitments you have.
For those who are married, it will be good to also consider how your total household income is affected and the existing financial obligations you have, such as, are you supporting elderlies or children, do you have children studying overseas or any exceptional medical expenses, rent commitments and others, before moving on to consider loan or financing payment commitments that will resume in October.
The key here is to be as thorough as you can. This will greatly help you when discussing options with the bank should you need further financial assistance.
Our goal is to help you on your road to recovery with solutions that cater best and are personalised to your needs, which is why we’re taking a targeted assistance approach rather than a blanket one-size-fits-all approach post moratorium.
Everybody’s recovery journey is different.
If one has no income due to job loss or one’s business has closed, how can the bank help with loan repayments after Sept 30?
For those who are still experiencing unemployment, we will assist you with a three-month extension to continue deferring all your loans and financing monthly repayments including term loans that have been converted from credit card balances.
This three-month extension will kick in on Oct 1. We will assess your situation to see if you need further assistance before the end of the three-month extension.
If your business has closed, the bank can consider your future plans to see how best we can assist you by either deferring the loan commitments for a further three months or reduce the monthly instalment for up to 75% for a period of time so that it helps you while you reopen a business or find employment.
What about those who have suffered a loss in income or pay cut and will continue to see reduced income for the rest of the year at least, will there be assistance?
Yes, definitely. For customers whose income or business cash flow has seen a reduction, we are able to assist in reducing their monthly repayments in tandem with their income reduction, for example by 25%, 50% or 75% for a period of time and your loan tenure will be adjusted accordingly.
We can also offer interest or profit only payments for a period of time if that is what is best for their particular circumstances. How much time given or the adjustment of loan tenure will be dependent on the individual circumstance. There is flexibility and the best is that customers approach us now to discuss so that the new arrangements can be in place well before Oct 1.
Mortgage, home financing and business cash loans – these types of loans are the largest in amount compared to other loan types. How will HLB help customers with them?
Considering the large monthly repayment amounts for these loans, there are options available. If you have suffered from reduced income or business cash flow, the bank will help with providing short-term relief before you restart full instalment payment by only paying for your interest or profit for six months.
Whereas, if you are on your way to recovery but expect to take more than 12 months to get back to pre-MCO levels, you have the option to do “step-up” instalments. What this means is that you start with a lowered monthly instalment in October and gradually build up to the full monthly amount, over a period of time which will also be adjusted based on your circumstance.
Another less talked about monthly repayment is credit card debt. Malaysians in this current economic climate would need help with managing this.
We have a dedicated assistance plan for credit cardholders under our Credit Card Relief Conversion Plan which we actually rolled out back in April.
For customers requiring assistance with managing credit card debt, under the plan, you have the option to convert your outstanding balance into a term loan of up to a 36-month instalment plan at an effective interest rate of 13% per annum. (flat interest rate of 7.1% per annum).
After converting to a term loan, you can apply for our Payment Relief Assistance Plan to reduce the monthly instalments to give you further relief, should your income recovery is still not at pre-MCO levels.
How will applying for additional financial relief or assistance affect a person’s CCRIS report?
Requesting for additional financial relief or assistance under the Payment Relief Plans will not impact your CCRIS report or credit score, provided that you have not missed your monthly repayments for more than 90 days up to March 31, 2020.
The relief programmes are done to ensure that borrowers can rebuild their financial well-being without having a lasting impact on their credit-rating or CCRIS history.
It is helpful to note, however, that borrowers are obliged to make the revised monthly repayments of your loans and financing after accepting the Payment Relief Assistance Plan, otherwise the CCRIS record will be impacted.
Advice for customers unsure of which Payment Relief Assistance Plan they qualify for or how to assess their financial standing.
We understand that assessing your financial situation might require some help from the bank. We have set up dedicated channels for you to discuss your particular circumstances with one of our staff. We are committed to help our customers recover, providing help in any way we can.
Please contact our hotline at 03-7959 1888 to find out more about our Payment Relief Assistance Plans.
Our customers can also speak to us at our Advisory and Assistance Day (Aug 15_ from 9.30am to 1pm at 150 selected branches nationwide on queries pertaining to the Payment Relief Assistance Plans, how the bank can help post loan deferment period as well as financial and investment advice.
Check out our website at www.hlb.com.my/relief where you can also write in to us with your queries. We have made the application process easy and intuitive with FAQs as well as a list of participating branches for the Advisory and Assistance Day, which you will find all in the same website. If in any doubt, it is best that you either visit one of our branches or call the direct hotline on the above-mentioned number.
Alternatively, if you require an independent assessment on your current situation, we encourage customers to reach out to the Credit Counselling and Debt Management (AKPK), established by Bank Negara Malaysia to provide free services on money management, credit counselling, financial education and debt restructuring for individuals. AKPK can be contacted at 03-26167766 or www.akpk.org.my.
SME and corporate customers can contact the following agencies for an independent assessment of your current situations.
> Khidmat Nasihat Pembiayaan (603-7880 0088 / www.myknp.com.my)
> Small Debt Resolution Committee (1300-88-5465 / email firstname.lastname@example.org)
> Corproate Debt Restructing Committee (603-2265 0878 / www.cdrc.my)
HLB strongly encourages customers to reach out to them or their respective banks now before the end of September to discuss and explore any assistance required in order to begin planning their recovery journey and have any financial relief and assistance plans finalised and in place well ahead of Oct 1.
Fuda shared that the bank has also started to actively reach out to customers that they think might need further assistance to better ascertain their circumstances, and thus provide targeted and individualised assistance that will ease their financial burden.
The bank has also further streamlined its policies and processes to ensure they are ready to provide the necessary assistance in a simple and seamless manner.
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