PETALING JAYA: A civil service union has urged the finance ministry and Bank Negara Malaysia to extend repayment periods of personal loans from 10 years to 20 years amid a spike in bankruptcy cases.
Cuepacs president Adnan Mat said there should also be an option to restructure loans to make repayments affordable.
He said in the past, people could take personal loans with tenures of up to 25 years, but this was shortened by Bank Negara to 10 years in 2013, with home loans also reduced to 25 years from 35.
“The move has reduced the disposable income of most people as their monthly repayments to service these loans are larger due to shorter tenure,” he said in a statement.
Adnan said with the insolvency department reporting 49,133 bankruptcy cases since 2018, the government could ease borrowers’ commitments by extending the tenure for repayment.
He said those who had seen their income reduced should be allowed to restructure their loan so their monthly payments could be more affordable.
“Loan restructuring can prevent bankruptcies. It will also stimulate the economy as there will be more disposable income,” he said.
The insolvency department said Selangor recorded the highest number of bankruptcies, followed by Kuala Lumpur.
