{"id":3107,"date":"2021-06-14T22:07:16","date_gmt":"2021-06-14T14:07:16","guid":{"rendered":"https:\/\/yhalaw.com.my\/?p=3107"},"modified":"2024-09-09T09:11:39","modified_gmt":"2024-09-09T01:11:39","slug":"covid-19-loan-repayment-creditworthiness-targeted-repayment-assistance-tra-methods-debt-avalanche-debt-snowball","status":"publish","type":"post","link":"https:\/\/yhalaw.com.my\/zh\/covid-19-loan-repayment-creditworthiness-targeted-repayment-assistance-tra-methods-debt-avalanche-debt-snowball\/","title":{"rendered":"COVID-19 \u2013 LOAN REPAYMENT \u2013 CREDITWORTHINESS \u2013 TARGETED REPAYMENT ASSISTANCE (TRA) \u2013 METHODS \u2013 DEBT AVALANCHE \u2013 DEBT SNOWBALL"},"content":{"rendered":"<p><strong>The<\/strong> <strong>Malaysian government has announced a three-month extension to the loan repayment moratorium for individuals who have lost their jobs and yet to find new employment during the Covid-19 pandemic \u2013 the Targeted Repayment Assistance (\u201cTRA\u201d) Programme. This programme is to assist those who face difficulties in continuing their debts during the Covid-19 pandemic. But a loan is a loan. Sooner or later it needs to be paid. Otherwise the creditworthiness of the individual can be compromised.<\/strong><\/p>\n<p><strong>&nbsp;<\/strong><strong><em>What is Creditworthiness?<\/em><\/strong><\/p>\n<ul>\n<li>Creditworthiness is what the lender will determine whether an individual is eligible for acquiring a loan before the lender approve any new borrowings to the individual.<\/li>\n<li>Creditworthiness plays an important role in having the required loan applications approved.<\/li>\n<li>Creditworthiness is a measure of how well an individual manages their debts.<\/li>\n<\/ul>\n<p><strong><em>Two (2) Distinct Strategies to Settle Outstanding Balances <\/em><\/strong><\/p>\n<ul>\n<li>Debt Avalanche method<\/li>\n<li>Debt Snowball method<\/li>\n<\/ul>\n<p><em>&nbsp;<\/em><strong><em>Debt Avalanche method<\/em><\/strong><\/p>\n<ul>\n<li>Prioritizing debts with the highest interest rates.<\/li>\n<li>Paying off debt starting from highest rate to lowest interest rate, regardless of balance.<\/li>\n<li>Debt avalanche method involves making minimum payments on all debt, then using any extra funds to pay off the debt with the highest interest rate.<\/li>\n<\/ul>\n<p><em>&nbsp;<\/em><u>Pros<\/u><\/p>\n<ul>\n<li>For individuals with larger amounts of debt, the avalanche method can reduce the time it takes to pay off the debt.<\/li>\n<li>End up paying less money overall \u2013 provided the individual stick with the payment plan as the individual do not skip a month or two of strategic repayments.<\/li>\n<\/ul>\n<p><u>Cons<\/u><\/p>\n<ul>\n<li>This method requires discipline and commitment to pull off.<\/li>\n<li>Also, it requires constant amount of discretionary income.<\/li>\n<\/ul>\n<p><strong><em>&nbsp;<\/em><\/strong><strong><em>Debt Snowball method<\/em><\/strong><\/p>\n<ul>\n<li>Prioritizing smallest debt.<\/li>\n<li>Paying off debts from smallest balance to largest balance, regardless of interest rates.<\/li>\n<li>The debt snowball method involves making minimum payments in all debt, then paying off the smallest debts first before moving on to next smallest.<\/li>\n<\/ul>\n<p><u>Pros<\/u><\/p>\n<ul>\n<li>Builds motivation by settling debts fast.<\/li>\n<li>Forces the individual to stay intentional about paying one bill at a time until the individual is debt-free.<\/li>\n<\/ul>\n<p><u>Cons<\/u><\/p>\n<ul>\n<li>End up incur more interest.<\/li>\n<li>More expensive overall.<\/li>\n<li>Can take longer time to become completely debt-free.<\/li>\n<\/ul>\n<p><strong><em>Consequences for Late Loan Repayment<\/em><\/strong><\/p>\n<ul>\n<li>The credit score of the individual will be affected.<\/li>\n<li>The individual will be charged penalties.<\/li>\n<li>The individual may be filed for bankruptcy by failure to pay off a loan timely.<\/li>\n<\/ul>\n<p><strong><em>Advice<\/em><\/strong><\/p>\n<ul>\n<li>If you are unable to tackle your debts by yourself, do seek help from recognised agencies that can help you come up with a debt management plan.<\/li>\n<li>Make sure you go to a reputable organisation and not some unauthorised agent that claims to represent financial institutions.<\/li>\n<li>The Credit Counselling and Management Agency or AKPK offers free advice and guidance to borrowers including options for debt restructuring.<\/li>\n<li>There are other agencies, including Creador Foundation, which provides financial literacy education for low and middle income adults via Multiply.<\/li>\n<li>Whatever your financial situation may be, take time to review it and safeguard your creditworthiness.<\/li>\n<li>Prioritize your essentials and do not let your bill grow faster than you can pay them.<\/li>\n<\/ul>\n<p>If you need any assistance for loan, please do not hesitate to log on to our website at <a href=\"https:\/\/yhalaw.com.my\/zh\/secure-loan-application\/\">https:\/\/yhalaw.com.my\/secure-loan-application\/<\/a>.<\/p>\n<p>Send us your details and we will get our professional mortgage specialist to understand your needs and apply loan for you.<\/p>","protected":false},"excerpt":{"rendered":"<p>Loan repayment, creditworthiness and how to better manage your loans<\/p>","protected":false},"author":9,"featured_media":3113,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2036],"tags":[2042,2037,2038,2039,2040,2041],"class_list":["post-3107","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banking","tag-avalanche","tag-creditworthiness","tag-loan-repayment","tag-methods","tag-snowball","tag-tra"],"_links":{"self":[{"href":"https:\/\/yhalaw.com.my\/zh\/wp-json\/wp\/v2\/posts\/3107"}],"collection":[{"href":"https:\/\/yhalaw.com.my\/zh\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/yhalaw.com.my\/zh\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/yhalaw.com.my\/zh\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/yhalaw.com.my\/zh\/wp-json\/wp\/v2\/comments?post=3107"}],"version-history":[{"count":2,"href":"https:\/\/yhalaw.com.my\/zh\/wp-json\/wp\/v2\/posts\/3107\/revisions"}],"predecessor-version":[{"id":3114,"href":"https:\/\/yhalaw.com.my\/zh\/wp-json\/wp\/v2\/posts\/3107\/revisions\/3114"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/yhalaw.com.my\/zh\/wp-json\/wp\/v2\/media\/3113"}],"wp:attachment":[{"href":"https:\/\/yhalaw.com.my\/zh\/wp-json\/wp\/v2\/media?parent=3107"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/yhalaw.com.my\/zh\/wp-json\/wp\/v2\/categories?post=3107"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/yhalaw.com.my\/zh\/wp-json\/wp\/v2\/tags?post=3107"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}