Many must be considered when applying for a loan, whatever the form, including credit cards, KTA, KPR, KKB, and so on. Some things to consider include the amount of interest, the annual administration fee, and how much installments to be paid per month. See also the agreed agreement, if there is an impact that must be accounted for if you are unable to pay the installments on time. Usually this has a relationship with collateral / assets that you make as collateral. Do not miss, of course you have to consider the ratio of debt and income before applying for a loan.
Debt and Income Ratio (Debt to Income Ratio)
The definition of debt and income ratio is the ratio that can see whether the payment of debt installments per month is in accordance with the amount of debt income he gets. Usually this will affect the creditor (for example the bank) to see if you are worthy of a loan or not.
Applying for a loan, whether a credit card or KTA is usually only fulfilled if the prospective debtor has a pretty good debt to income ratio. This analysis is used as a basis by the bank, because the bank will assume you are quite responsible if it has a fairly good ratio.
Not only at the time of submission, the ratio of debt and income can also be taken into account when you have got a loan. Basically, it is fair to have a debt that is lower than income per month, especially if the debt is consumptive.
Here is the formula for debt and income ratios:
How to Read Debt and Income Ratio Scores
After knowing the debt ratio formula, the next step is to find out how to interpret it. Here is a guide to how to read it.
≤ 35% – Ideal / in accordance with income
The debt ratio in this number has a definition that your financial flow is quite ideal, and allows you to pay debts regularly, without the need to fear being in arrears. By always being consistent and maintaining debt and income ratios at this number, and paying installments regularly can also have an impact on your credit score at SLIK which is good and free from blacklists. Even with a good debt and income ratio, you also still have to keep your expenses under control and far from being wasteful, so you can still regularly pay installments.
36% to 49% – Less Ideal but Still Improved
For this number, actually the ratio you have is still quite good and can still be improved, it’s just not as ideal as the percentage below. You still have the opportunity to overcome uncontrolled expenses. As much as possible don’t let your debt to income ratio exceed 40%. Therefore, if you are unable to maintain a ratio to stay consistent or lower the debt-to-income ratio, it is likely that you can experience a crisis and no longer have the ability to repay debt in the future.
≥ 50% – Not ideal
Understanding the debt ratio in this number is an imbalance between monthly income and the installments you pay each month. Usually if you have arrived at this number, you no longer have the ability to pay installments, the ends of which can have an impact on the arrears in installments. If you have reached this number, it is better to ask for help from a more experienced consultant to help you in reducing installments, and increasing income.
Let’s try applying in a case example. For example, Budi’s monthly income is IDR 10,000,000, then Budi has installments of several credit cards of IDR 5,000,000, then Budi’s debt and income ratio is 50%.
Based on the guidelines for reading the debt and income ratios above, we can find out that the debt ratio is not healthy, because it hits 50%. Then how to overcome this? Check out the next subcategory.
How to Lower the Debt Ratio Percentage
In the example above, Budi has a debt ratio of 50%. Then what should be done if you have continued to experience the debt ratio in this number, and how do you lower the debt ratio percentage? There are a number of things you can do:
The key to minimizing the percentage of debt ratios is in both aspects of the calculation: monthly income and the amount of installments. Let’s start with monthly income, the step you can do is to increase monthly income. If you currently have limited income, there are several ways you can do it.
The first way, if you are an employee, try to ask for a raise . Try to focus on the achievements that you have contributed to the company, and make it capital to negotiate a new salary nominal. Remember to always sell yourself quality, and avoid begging to companies, especially with the reason that you have a lot of debt.
Second, you can also outsmart it by finding a side job. There are many opportunities that you can take advantage of, for example being an article writer, language translator, even being a driver for online taxis.
Third, try to see the opportunities that exist. If possible, try to start doing business from home. If it is difficult, you can ask for help from a partner or family You can also use assets such as the car that you own, or even make use of vacant land / rooms at home and be processed to become extra money producers.
Reducing Debt Nominal Before discussing whether or not to reduce the nominal debt, one thing to remember is not to add new debt, including shopping with a credit card. This will only burden you and make it more difficult for you to pay off debt and achieve a good debt ratio. Discussing further with reducing debt, the answer is able, depending on the type of debt you have. If you currently have a problem with credit card debt or KTA that is in arrears and starts to burden, it’s good to ask for help from consultants who are more professional in dealing with it. With this, you can be lighter in paying off debts, and your total monthly income will not continue to be burdened with the amount of debt that must be repaid. There is usually a debt management program provided to help your problem:
- One-time discount / discount: This type of lightening program allows customers to get a discount with a nominal value that is usually quite light, generally 20-50%, and must be paid in one payment. This type is suitable for those of you who do not have enough savings, which can be directly allocated to pay the remaining arrears.
- Extended Installments with Low Interest: Usually with this program customers can pay in installments at a much lower interest rate. If the current normal interest is in the range of 2.25%, then there is a possibility to get interest of only 0-2%, with a tenor of up to 60 months (in certain cases). The advantage of this program is that you can pay little by little without directly dredging savings.
- Installment Discounts: For installment discount programs, you can usually benefit from the two types of programs above. But because of its combined nature, of course you cannot pay in installments throughout the installment program, generally as much as 6x payments. Likewise for discounts, you don’t get a discount for a one-time discount program. This type of program is only available in some banks.
One of the debt management program providers that you can use to overcome the problem of bad credit cards is Gregor Samsa.
Gregor Samsa international is the first technology-based professional services company in Indonesia, which provides a debt management program. This program is designed so that consumers who are in debt, have the ability to control their finances again. Gregor Samsa indonesia helps clients through a debt management program, specifically designed according to the different needs of each client. This program is a combination of education on various opportunities to increase income and reduce expenditure, as well as conduct negotiation processes on existing bank debt requirements to reach the amount of payment that is in accordance with the ability. Samgor Indonesia’s Gregor headquarters was established in Jakarta in 2015 by a founding team that has collective experience in finance including debt settlement for more than two decades. Gregor Samsa has made Indonesia the center of operations as well as a blueprint for the company’s development plan to other ASEAN countries. Since July 2016, Gregor Samsa Indonesia has become the first company in Asia to be accredited by the International Association of Professional Debt Arbitrators ( IAPDA ).