A moratorium on repayment of bank loans by borrowers affected by the COVID-19 slowdown will be extended for a further nine months, according to a legal notice published today. 

Under the scheme, borrowers are allowed to request from their lender a pause in repayments.

Borrowers have until March 31 to apply for the extension. 

It applies to credit facilities sanctioned prior to March 1, 2020 – to individuals, households or businesses which can show that they were negatively affected by the COVID-19 economic slowdown.

Finance Minister Clyde Caruana had confirmed last month that the moratorium would be extended. 

“We would like to make sure that people’s minds are at rest about this so they can focus on their businesses. People need liquidity and funding to make sure we keep the economy going and prevent businesses from shutting down,” Caruana said at the time.

In the previous moratorium period, creditors could not impose any extra administrative fees meant to penalize borrowers for failing to repay on time. 

They also have a right to refuse the moratorium from being granted as long as the refusal is not given when there is unequivocal evidence that suggests the borrower’s difficulties are COVID-related.

Borrowers can decide to temporarily forego all payment, or choose to pay off their interest only. 

The payments missed during the moratorium period are later repaid via a corresponding extension of the loan.