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Wednesday, June 29, 2022

Civil servant laments jump in loan repayments


A civil servant received a letter informing him of the adjusted base rate earlier this month.

PETALING JAYA: A civil servant expressed shock over his personal loan repayment which has jumped by more than RM600 a month after the bank adjusted its base rate (BR).

Requesting anonymity, he told FMT his current loan repayment was RM1,450 a month, but following the adjustment, he will have to pay RM2,072 from next month.

“After the bank declared that it will be raising its BR, I will have to pay more than RM2,000 every month. With the price of goods rising, what is left for me to bear the cost of taking care of my family?” he complained to FMT.

On June 8, he received an official letter from the bank, pointing out that its BR had increased from 2.60% to 2.85%, effective May 20.

He took a personal loan of RM100,000 four years ago and has about two years left to settle it.

He said he was shocked by the sharp increase and disappointed with the government, complaining that a thorough study was not done before the overnight policy rate (OPR) was raised.

The increase in the OPR by Bank Negara Malaysia by 25 basis points to 2% has seen local banks in the country raising their BR.

“In my opinion, the government needs a mechanism to study how a decision it makes can affect the people.

“If the price of goods goes up and, on top of that, the government increases loan repayment rates, how are people going to balance all of that? Study something before implementing it!” he stressed.

The civil servant, who is about to retire in two years, also said it saddened him thinking about the future of his family, especially his children who were still in school.

“I have children. Three of them are still in school, and two of them are studying at a university. They still depend on their parents, and now, the price of all goods has gone up,” he said. - FMT

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