2021 AmBank Moratorium for car loans – deferment or 50% reduction for six months, with added charges

Under the Pemulih plan announced by prime minister Tan Sri Muhyiddin Yassin on June 28, a six-month loan payment moratorium will be offered to all Malaysians. This is similar to what was offered in the first round of the movement control order last year, and those who require assistance can submit their applications from today.

Prior to this, financial institutions have continued to provide targeted repayment assistance to individuals impacted by Covid-19 and movement control orders. However, the latest moratorium is available to everyone from the B40 segment right up to the T20, along with micro entrepreneurs.

AmBank has updated its Covid-19 relief measures and support page, which includes a list of available relief options for customers to choose from via its Repayment Assistance programme. As with previous posts relating to the moratorium, we’ll be focusing on car loans in particular. New documents or agreements will need to be signed in accordance with the legal and Shariah requirements before the assistance can take effect, so do look up the operating hours of your preferred AmBank branch before heading over.

The bank is offering two plans, with the first being a deferment of instalments for six months, while the other is a 50% reduction of instalments for six months. Those interested can submit their applications to AmBank via an online form, or by contacting the bank at 03-2178 8888 or customercare@ambankgroup.com.

Keep in mind that the moratorium is not a loan waiver, meaning you’re not setting six months of “free instalments.” The reality is your payments are deferred but accompanied by an extension of the loan tenure by six months. This will result in the total interest paid being higher due to the tenure extension.

AmBank did not provide an example scenario of what will happen if payment deferment is chosen, but it is similar to CIMB’s example, which you can check out here. Essentially, you will not need to pay instalments for six months, but there will be an additional interest accrued during the deferment period that is payable at the final month of your loan tenure.

In another scenario where customers choose to lower their monthly instalment by 50% for six months, as there is no extension of the loan tenure and monthly instalment remains the same after the six months of 50% off, the outstanding balance is due at the end of the loan tenure, in one lump sum. Basically, the accumulated 50% that wasn’t paid for six months must be paid at the end of the loan.

Unlike targeted assistance, there is no need for proof of a pay cut or job loss, and no documents are required. All borrowers need to do is apply with the bank for the moratorium, and sign an amended loan agreement.

Approval is automatic for individual borrowers, and approvals should come within five days if you are qualified. Meanwhile, for companies, it is subject to review by the bank and not automatic. Also, accepting the loan pause will not affect an individual’s CCRIS status and rating, so there’s no need to worry.

Here is the list of other banks that have released details of their loan moratorium options:

• CIMB
• Hong Leong Bank
• Maybank
• RHB

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