Malaysians: Deferral helpful but comes with a cost

PETALING JAYA: The government’s decision to allow the deferment of loan repayments to cushion the economic fallout on account of the Covid-19 pandemic drew mixed reactions from Malaysians.

While some said it would give more breathing space for those with high financial commitments, others opined that it was merely a temporary solution as loan interest would be accrued from deferred monthly mortgage instalments.

It was announced yesterday that individuals as well as small and medium enterprises will be given a six-month reprieve on the repayment of their existing loans, including mortgages and hire purchases.

It also said that credit card holders could apply to convert the outstanding balances into term-loans.

Wee Chong Wei, a 27-year-old digital marketing executive, said he would not opt to defer his mortgage payments as the interest portion of his current mortgage instalment was already high.

“Three quarters of my monthly repayment is only for interest,” he said, pointing out that he paid nearly RM2,000 a month for his mortgage.

“But for those who are living on their salaries without any savings, then yes, it helps. But it comes with a cost,” he added.

Wee said those who opted to defer their instalment payments could consider channelling the money to other investment options that provided decent returns.

“As long as the return on investment is higher than the (mortgage) interest incurred,” he added.

Meanwhile, lawyer Syafika Izzati, 27, welcomed the government’s decision, saying it could reduce her monthly financial commitments and increase her savings.

“Without this moratorium, things could be a lot worse for most people and our economy could collapse, leading to chaos.

“At present, this is a great step to prevent further economic decline due to borrowers’ inability to pay their respective loans and being insolvent, as well as allowing them to have more cash in hand to buy daily essentials,” she said.

However, Syafika cautioned against deferment for mortgage repayments, saying it could cause the debts of an individual to increase.

At the same time, Syafika said the government must introduce better policies to protect vulnerable Malaysians from the expected economic downturn, given that many have lost their source of income due to the movement control order (MCO).

She also said any future policies announced by the government must also take into consideration accessibility, as some Malaysians did not have easy access to information and transportation.

“The government needs to introduce a policy that is not only accessible to everyone but also one that ensures no one gets left behind,” she added.

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