The ĠEMMA Team refers you to its Money Management and COVID-19 post – MORATORIUM ON LOANS AND OTHER CREDIT FACILITIES – click here. This post relates to the COVID-19 measure that established a moratoria on bank loans and other credit facilities.
On 24th April the Central Bank of Malta issued a clarification. The clarifications are as follows –
- During the course of the moratorium, interest is to be accrued but not capitalised. This means that no compound interest accrual is to occur during this period. This accrued interest will subsequently be recovered on basis where the loan is spread equally across the remaining modified maturity term of the loan after the end of the moratorium period.
- You can enter into a mutual agreement with your bank or financial institutions for different repayment plans – such as shorter terms and higher payments or vice versa – as long as no compounding on the deferred interest accrued during the moratorium occurs.
Should you wish to view more information please click on this url: https://www.centralbankmalta.org/en/news/79/2020/8805.