Applying for a personal loan or using a credit card to shop is not uncommon, but you must make sure the personal loan is secure. This means you have to apply tips so that personal loan repayments are not bad, because bad loans mean spending more money. Plus, a bad personal loan will have a long-term impact. For example, if you are known as a bad borrower, your name will be recorded in the system at the bank making it difficult for you to apply for another loan or use a similar service in the future.
Bad credit usually occurs when the number of loan bills that you have to pay more piles up in each period because you do not pay the installments according to the provisions, for example because you are late or unable to pay. If that happens, there will be various impacts such as the confiscation of assets used as collateral, and the inclusion of your name as a “less than ideal customer.” If you borrow, you must make sure that the loan will not become bad credit.
Tips for Ensuring a Personal Loan is Secure
Loans such as mortgages, unsecured loans and so on are indeed very helpful, but can also be a huge burden if payments are not made regularly. There is no harm in applying for a loan or using a credit card, but you must make sure that the credit is not stuck in the middle of the road.
Here are some tips to avoid bad credit:
Make sure the loan does not exceed ability
This seems obvious, but what exactly is meant by “not exceeding ability?” This depends on your income, but in general, when applying for a loan or making a purchase with a credit card, make sure the amount of installments you must pay each month does not exceed 30 percent of your income for the month. Thus, installment payments will not be too heavy, and you will easily manage money.
Avoid loans / credit for consumer goods
Although credit cards and loan facilities at banks can be used for anything, it should not be used to buy consumer goods. Use a credit card only for transactions that are really urgent when you don’t have cash (for example, having to suddenly buy a plane ticket in the middle of the night). Before applying for a loan at a bank, make sure the loan is only for something useful, such as a dream home loan (which is also a form of property investment) or for business capital.
Make installment payments a priority
When you already have an obligation to pay installments, make sure to make that a priority in monthly financing. Installment is debt, and debt must be a priority, especially if it is a repayment of bank loan payments whose numbers will continue to rise. Don’t be lazy or procrastinate on installment payments and do it as soon as you have money. If you receive income or income a little more than usual, add a little amount of installments that you must pay.
With these tips, you can be sure that the loan will be repaid on time and that it won’t be bad credit.
Solution If Bad Credit Occurs
What if the bad credit already occurs? Don’t avoid your obligations and contact the bank to show good faith. Even if you still have to pay, the bank will usually offer several credit restructuring solutions, to facilitate the installment payment process. There are 3 types of restructuring options, namely:
- Rescheduling. The bank gives the option to the borrower to increase the period of time of the installment payments, for example from one year to three years, to make it easier.
- Changes to loan terms. The bank provides compensation in the form of changes to loan conditions, for example the period of payment, the amount of installments, time of payment, and so on.
- Credit rearrangement. The bank changed the loan policy to make it easier for the borrower to repay, for example changing the percentage of interest charged on the loan.
Although the bank has several solutions for borrowers in good faith who experience bad credit, your name will still be included in the records of the Bank Indonesia Debtor Information System, so the bank will rethink to give you new loans in the future. If you have to borrow money, make sure the personal loan is secure so that the loan repayments are not bad and become a new financial burden.