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No More Loan Moratorium, What Now?

Published 13 Aug 2020

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By Fi Life Team
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Are you concerned about your loans now that the blanket loan moratorium is coming to an end? We discuss how to prepare for this, the possible concerns, and next steps.

Guests:
Samantha Yeoh - Wealth Vantage Advisory
Nirmala Subramaniam - AKPK

Moderators:
Roshan Kanesan - BFM Radio Presenter, Ringgit & Sense
Malek Ali - Founder, Fi Life Sdn Bhd

Show Summary:
1. Reach out to your financiers:
- It is not automatic anymore
- Find out how much you need to pay

2. It is not free money, it is just a buffer to get through the economic downturn:
- You still need to pay eventually, there is a cost structure behind
- Don’t start a new debt
- Don’t wait until October to be surprised by the number

3. Reaction to the moratorium by the public
- Keeping the money to prepare for the economic downturn
- Took money to invest or spend it

4. What should we do after the end of the moratorium?
a. For those that have pay-cut:
- Inform and discuss with family members
- Manage your cash flow needs vs wants
- Control your expenses
- Create an emergency fund to prepare for the worse
- Restructure investment assets from equity to bond
- Restructure insurance plan
- Apply to cash-out EPF account 2 to pay home mortgage

b. For those that lose their job:
- Manage your cash flow
- Check the runway of the liquid cash
- Find out ways to reduce or defer premium or loan for mortgage or insurance
- Find a new job and manage expectation
- Accept a part-time job to make sure you increase cash flow

c. For those that expecting to lose their jobs:
- Focus on cash inflow, make sure less than 40% income for debt payment
- Prepare emergency fund
- Manage cash flow to cut spending and increase liquidity
- Upskill, MDEC is providing free online classes

5. What are your options if you’re in over your head financially?
- AKPK
- Don’t go to loan sharks
- Bankruptcy

6. To avoid going bankrupt:
- Seek a loan restructuring arrangement with the bank
- Alternatively, you may seek help from The AKPK before deciding for the stage of bankruptcy

7. Have you ever heard of the term sepuluh-tiga or ten-three?
- This term actually denotes the interest rate charged.
- Sepuluh-tiga here means the interest rate will be charged at 3 sen out of every 10 sen, which basically translates to 30% interest.

8. Moral of the story: Only borrow money from the trusted financial institutions