You are to note that the government has issued instructions that loans / credit (capital) and interest payable is suspended for 6 months. This moratorium applied on credit facilities provided by credit and financial institutions is to support persons who have been materially effected by the COVID-19 outbreak.
The moritorum applies to:
- Non-financial corporations
- Micro, small and medium, and large enterprises
- Self-employed
- Persons in employment
- Persons who were employed before the start of the moratorium period but became unemployed during the period of the moratorium
- Households
To be eligible for this moritorium you must:
- Been regular in your repayment of the loan – that is you have no arrears – entered into before 1st March 2020.
- You are to demonstrate that the COVID-19 outbreak has impacted you in such a way that you cannot meet your loan payment obligations.
The moratorium does not apply automatically. You must submit an application which you are to obtain from your bank. You will be expected to provide the following information:
- Payslips for the previous three months
- FS3 forms
- Employment contract
- VAT returns (for businesses)
- Latest financial reporting statements and accounts (for businesses)
- Latest bank statements
- Dismissal letters where applicable
- Order of closure of business and/or operations
Your application may be refused by your Bank.
The moratorium applies to the following facilities:
- Mortgages
- Business and commercial loans
- Buy-to-let loans
- Personal loans
- Bullet loans
- Overdrafts
- Bills of exchange (including endorsed pour aval),
- Promissory notes
- Guarantees
- Indemnities
- Acceptances
Credit cards are excluded.
Of note:
- The moratorium does not cancel your obligations to pay the loan: it provides you a breathing space of 6 month to allow you to manage your cashflow better.
- The moratorium will not result in higher monthly repayments periods after it ends: however, in case of mortgages or other personal loans, whose term already extends up to retirement age, the deferred repayments due will be spread evenly throughout the remaining term of the loan.
- The are no penalties or charge fees.
The Central Bank of Malta issued a guide explaining how this moratorium works. Click here to download it.