As discussed earlier, an unsecured loan is legitimate to be used as a solution for fast funding needs. However, some careful consideration is needed to guarantee the return.
For your consideration, let’s look at 10 facts about unsecured credit:
Doesn’t Need a Guarantee
It’s called unsecured credit, of course, the first fact is that this credit does not require collateral or collateral in its submission.
Therefore KTA is also called unsecured loan , because this product includes high risk credit products due to the absence of collateral or collateral for loans.
This is different from other credit products such as KPR or Multi-Purpose Loans (KMG), which certainly require collateral to be used so that funds can be disbursed.
This lack of obligation to include collateral makes unsecured loan an attractive choice for those who need cash loans in a short time.
Loan Amount (Loan Ceiling) Is Not Too Big
Because the risk of the bank in loans without collateral tends to be large considering that there is no guarantee or collateral that is the bank’s hand in providing credit, the loan ceiling provided is generally not too large.
This is done to minimize possible losses. For example, BNI provides the following loan ranges:
- Minimum loan amount: 5,000,000 rupiah
- Maximum loan amount:
50,000,000 rupiah (if payroll is not via BNI)
100,000,000 rupiah (if payroll via BNI)
Interest rates per year are quite high
Because there is no collateral that guarantees your loan or credit, the bank generally minimizes the risk by providing a high enough interest rate.
The amount of interest charged varies for each bank in the range of 10% to 23% per year. Types of interest rates charged on the unsecured loan is a fixed interest rate (fixed) so that its value will always remain in each period.
Interest costs will be calculated according to the amount of the loan agreed before deducting the provision fee.
Tenor tends to be shorter
Generally, the tenure of the unsecured loan is shorter when compared to loans or loans with collateral (collateral). The maximum tenor that applies to unsecured loan is usually 60 months or 5 years.
Well, you should always check the tenor before deciding to take unsecured loan. Why?
Because the tenor affects the installments. You need to measure your ability to pay according to the applicable tenor.
Terms of Submission are Easy
As mentioned earlier, Personal Loan (unsecured loan) is a loan product provided by financial institutions such as banks.
Because it involves the issue of lending and borrowing that is legal in the eyes of the law, of course there is an agreement that regulates all the terms and conditions that apply to both parties. When compared with other types of credit, the requirements for applying for unsecured loan are indeed easy. This is intended so that submissions can be processed more quickly so that loan funds are quickly liquid and can be used immediately.
In addition to the document requirements, there are usually other terms assessed from your person. For example:
- Your credit score must be good and the credit category is smooth.
- Have clear staffing or professional requirements.
- Has a minimum income that matches the requirements, and there are still many other conditions that vary in each bank.
Funds can be used as needed
Different from some other types of credit, you can use an unsecured loan for any need. An unsecured loan is generally used for consumer needs that require fast funds, including:
- House renovation
- Venture capital
This is certainly very different from investment credit or working capital loans from banks. Working capital loans, for example, must attach financial statements of businesses to be financed, business licenses, business taxation, and so on.
Lots of Additional Costs
Don’t be surprised when you receive a loan, because the amount is definitely less than the agreed amount. Why is that? This can occur because of additional costs that may arise when you apply for unsecured loan.
For example, fees or administrative fees will be deducted directly from your loan ceiling. These fees vary in size depending on the type of bank but generally range from 1% to 4% of the loan ceiling.
In addition to provision fees, there is an annual fee. Not all banks impose annual fees on their unsecured loan, depending on the policies implemented. But if there really is, this annual fee is charged to you every year and usually the value ranges from 1% to 2% or in a certain nominal value (for example 100,000 rupiah per year).
Can’t Be Late to Pay, But It Cannot Also Be Accelerated
Well, this needs to be considered if you often forget to pay installments. Late fees are fees charged to you if you make late monthly payments. The magnitude varies but usually changes depending on the time of delay. Thus, always mark your calendar to pay the exact amount and on time!
However, that does not mean you can also pay off unsecured loan faster than the agreement. This is because banks generally impose accelerated repayment fees.
In other words, you will be fined if you repay the loan faster than the agreed tenor of the loan. The amount varies again, but ranges from 5% to 6% of the remaining loans.
Then consider carefully before you choose to pay off the unsecured loan before the deadline, do not let the penalty be greater than the remaining loan plus interest.
Using Flat Interest Rates
All unsecured credit products or unsecured loan in the bank apply a flat interest calculation scheme. The type of interest rate that is considered the simplest and easiest calculation compared to the other 2 types of credit interest.
On flat rate loans, the calculation of the loan ceiling value and interest will be calculated proportionally according to the tenor or the length of the loan.
The calculation formula used in flat interest rates is as follows:
Interest per month = (P xixt): jb
- P = loan principal
- i = interest rate per year
- t = number of years of credit period
- jb = number of months in the credit period
This method of calculating interest does not take into account the amount of debt that you have paid. Interest is calculated always based on the total debt principal at the beginning of the loan.
The monthly installments are always fixed. Because of the calculation method like this, flat flowers appear as the most expensive interest count.