A moratorium on loan repayments is to be extended for individuals, households and businesses affected by the pandemic.

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

Finance Minister Clyde Caruana confirmed to Times of Malta that it will be extended into 2021 but did not give any further details. 

In a previous extension, borrowers had until September to apply for the moratorium, which could last up to a year.

Credit facilities sanctioned prior to March 1, 2020 to either individuals, households or businesses who can prove that COVID-19 slowed down their revenue would be entitled to the freeze.

Caruana explained that the government is planning on announcing further extensions “soon”, without revealing too much detail.

“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.

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.