AS the end of the six-month loan moratorium looms, borrowers are gearing up to resume their payments.

Some will use savings to service their loans, some plan to tighten their belts even further but all felt it is time to bite the bullet after the reprieve.

On September 30, the automatic moratorium granted by banks to mitigate the impact of Covid-19 on individuals and businesses will end. 

Extensions are given on a targeted basis for a further three months to those who lost their jobs during the pandemic and remain jobless, while those with wage cuts will have lower monthly instalments.

Retrenched airline crew member Diana Mustafa was given the option by her bank to extend the moratorium on her car loan or to reschedule the payments.

The 27-year-old said she opted to reschedule payments as the terms are reasonable.

“I bought my car at the end of 2017. It has been less than three years and I pay RM1,400 monthly.

“When I lost my job, I did think about how I would manage the monthly payments. I told my landlord I would end my (rental) contract and I stay with my parents now,” she said.

Under the rescheduling option, her loan tenure is extended from six years to 12 at a lower instalment payment and at the same interest rate.

Another borrower who wanted to be known as Dev will also resume paying the monthly instalments on his car loan.

“Business is still pretty much slow but my aim is to do my responsibility as a borrower. I’ll just have to force myself.

“You have no choice, or else they’ll come knocking on your door,” said Dev whose company is involved in the cinema industry.

With less than two years left to complete repayments and with business doing badly, Dev said he will put aside cash to service the loan even if it means cutting down on other spending.

“You have to pay in the end, so might as well go ahead and settle it sooner.”

While the targeted moratorium extension allows reduced instalments for those with pay cuts, Michael Ong said he will resume repayments even though he took a 30% pay cut.

Ong, who works with an online auction and bidding firm, said he will dip into his savings until his business regains some stability.

Copy-editor Adrian Phung, meanwhile, is worried as resuming payments means further tightening of the belt.

The six-month moratorium helped him save some money and divert some cash to other purposes, he said.

“(I am) feeling slightly stressed as I need to think of ways to cut down on other expenses,” he said of the looming deadline at the end of this month.

Phung’s bank restructured his car and housing loans by extending the repayment by six months.

He said the amount payable will also be less given the recent cut in interest rate.

However, Phung also supported calls for the blanket moratorium to be extended until year-end in view of the unstable economy, high cost of living and unemployment rate.

Marketing manager Zechariah Ravin Kent said he doesn’t qualify for the targeted moratorium extension as he’s still receiving a full salary.

“Even though all our offline retail outlets were closed (during the movement-control order), the management continued working from home as we still had an e-commerce platform to run,” he said.

According to the latest Laksana report by the Finance Ministry, the value of the blanket moratorium is estimated at RM74.3 billion as at August 14. – September 1, 2020.