2021 Moratorium of the Pemulih Public Bank on car loans – Postponement of 6 months or reduction of 50% of monthly payments
We continue to review how each bank handles the repayment of Pemulih’s six-month bank loan, which was announced last month and is eligible for all Malaysians. This time, we’re focusing on Public Bank, which has released details of its own offerings as apps open today.
As with other banks, the company offers either a full deferral of payments or a 50% reduction – both for a period of six months – as part of its Targeted Repayment Assistance (TRA+) diet. This offer is open to all AITAB Hire Purchase-i car loans and loans for individuals (B40, M40 and T20) and very small businesses, with automatic approvals for opt-ins. Small and medium-sized enterprises (SMEs) that have been financially affected by the coronavirus pandemic can also apply.
It’s important to remember that the moratorium is not a loan waiver, so you don’t get six months of “free payments”. On the contrary, if you choose the first option, your loan term will be extended by six months and come with higher interest rates, as interest will continue to accrue during the deferral period. However, no compound interest is applied.
As for the second option, the occupancy period will be extended by three months, the customer paying the usual deposit during this period. The bank did not specify when the additional interest is payable in either case, but it should be included in the last installment in a single lump sum, as is the case with other banks.
Like RHB and AmBank, Public Bank did not provide a bulk carry example, but the system should work identically to the Maybank example as shown above. Of course, the interest will vary depending on the amount of your loan, the remaining term and the agreed interest rate, so you should confirm the details with your bank before deciding to delay your payments.
The Public Bank also offers a personalized payment schedule that includes a six-month deferral of payments and reduced payments through an extension of the loan term of up to two years. This applies to all retail and business customers who have been financially affected by the pandemic, with approvals subject to the terms and conditions of the bank and in its sole discretion.
This third option essentially means that after you defer your payments, your monthly payments will be slightly lower, even though you will be paying longer. The catch is that your interest rate will also be higher, so you’ll pay more for your car in the long run.
The example given by Public Bank shows a nine-year loan in the amount of RM70,000, with an interest rate of 2.68% per annum and monthly payments of RM805. The borrower opts for the personalized three-year remaining plan; the RM 35,575.57 still owed to the bank is effectively refinanced into a five-year loan with an interest rate of 2.91% and monthly payments of RM 755, payable immediately after the deferral.
As the table shows, the borrower will pay an additional RM 2,070.50 due to the additional interest, which appears to be prorated so that they are not massively shocked by a huge final payment. Oddly enough, the company also provided examples of three- and four-year extensions, even though the plan is capped at two years.
Unlike previous targeted aid offered by banks, you will not need to provide any documents or proof of a drop in salary or job loss. All you will have to do is apply either in line or manually by e-mail (at [email protected]), the account-keeping agency or hire-purchase center where the loan was granted, using this form.
Besides Public Bank, banks that have announced their moratorium options on Pemulih include: