Cuepacs president Adnan Mat said there should also be an option to restructure existing loans to make repayments more affordable over a longer period.

He said in the past, people could take personal loans with tenures of up to 25 years, but in 2013, BNM shortened it to 10 years, with the maximum term for housing loans also reduced from 35 years to 25 years.

“The move has reduced the disposable income of most people as their monthly repayments to service these loans are larger due to the shorter tenure,” he said in a statement.

Adnan said with the insolvency department reporting 49,133 bankruptcy cases since 2018, the government could ease borrowers’ commitments by extending the tenure for repayments.

He said those who had seen their income reduced should be allowed to restructure their loans so that their monthly payments were more affordable.

“Loan restructuring can prevent bankruptcies. It will also stimulate the economy as there will be more disposable income,” he said.