As we continue to face the dual economic and health crisis, Malaysians must also start getting their finances in order and make sure that they will continue to meet their financial responsibilities. However, with many in a tight spot due to reduced salaries and retrenchments in the workforce, these financial commitments may be a challenge.
If you are in this situation, here are some strategies for handling your loans/financing and credit card commitments. But first, you need to calculate two things: first, your total monthly financial commitments – your car, home, or personal loans/financing that you may have.
If you have any credit card Easy Payment Plan (EPP) installments for large purchases you recently made, you need to include this into the total as well. Secondly, you should also identify how much you can repay each month during this period (let’s call this your repayment budget). Knowing these figures in mind will make it easier.
In this “new normal”, there has been a spike in on-demand services, such as food or parcel delivery and ride-hailing. More platforms are actively hiring short-term or part-time roles to meet this demand, making this an opportunity to create a temporary income stream to meet your financial commitments.
Whether you are on reduced salaries or still looking for a new job, “side hustles” can be a good way to increase your repayment budget and help you meet your monthly financial commitments. Just remember that this income is meant to meet your financial obligations, so try your best not to splurge.
In a low-OPR environment that we are currently experiencing, an existing home loan or financing may actually become “more affordable” due to the lower prevailing interest/profit rates.
However, spending wisely is necessary so that you do not rack up debts and lose track of your expenditures which you may not have the ability to repay. If you are currently in this situation, please be aware that there is the option to convert them into term loans with lower prevailing interest rates.
Home financing, personal loans and hire purchase loans are generally repayable based on a monthly repayment schedule. However, based on the current circumstances with the pandemic, it is pertinent to seek alternative repayment options if you are not able to resume repayment commitments obtained prior to the
Repayment assistance is available to eligible Malaysians who are affected by the Covid-19 pandemic, and it is a simple and straightforward process. 98% of all repayment assistance applications have been approved thus far – a testament to the industry’s commitment to lend a helping hand.
Of course, not everyone may be comfortable to try out the strategies shared above. It can be intimidating, and we might even make mistakes. If you feel this way, you should speak to your bank as soon as you can.
Written by Mohd Kauthar Rozmal, Editor-in-Chief of The Outlook Asia