Interest on hire purchase loans will not be compounded or accrued during the six-month moratorium from banks, as part of mitigation measures to help people cope with the economic fallout of the Covid-19 pandemic, the Finance Ministry said today.
Finance Minister Tengku Zafrul Tengku Abdul Aziz said the ministry and financial institutions have managed to reach an agreement on the matter, for both conventional and Shariah hire purchase loans.
“An agreement was reached so that the instalment amount will not change for hire purchase loans, both conventional and Shariah.
“This means that there will be no extra charges imposed during the moratorium period,” he said in a statement today.
He said consumers should get more information from their banks and also remember that they must resume their loan repayments based on the terms of agreement.
“This includes an additional six months to the total repayment schedule if they opt for the moratorium.”
The minister’s statement follows confusion over the government’s initial announcement on the moratorium, which gave the impression that there would be no interest accrued or compounded during the moratorium.
However, press statements by Bank Negara and the Association of Banks Malaysia last week indicated otherwise.
The ministry has since admitted to poor communication and an inaccurate illustration at the time of the initial announcement. – TMI