Businessmen, Before Proposing Unsecured Loans

Know Deeper

Unsecured Credit is a banking product in the form of individual credit without collateral as a condition for submission. Because of its ease and fast procedure, is often the solution for various needs.

A product that is much favored by debtors who need fast funds because the submission process tends to be fast and does not require troublesome procedures such as checking assets that are used as collateral.

The bank will consider the ability of the debtor to repay the debt from his credit history as a determinant of your credit to be approved or not.

Some of the advantages of products when compared to other credit products are:

  1. The submission process is fast and easy, and does not require a guarantee.
  2. The document is a small submission requirement.
  3. The amount of payment can be repaid in accordance with the agreement with the bank.
  4. The payment process is quite easy.
  5. Can be used for any purpose.
  6. Easily found in certain banks or financial institutions.
  7. Fixed interest rates during the credit contract period.

Besides its many interesting advantages, KTA also has several disadvantages, including:

  1. Limited borrowing limit.
  2. The tenor of a short loan depends on the amount of the loan.
  3. You must have a professional status with income every month.
  4. Generally, you will be asked to open an account at a related bank.
  5. Interest rates are quite high because there is no guarantee.
  6. There is a penalty fee if you pay off the loan before maturity.

Unlike other types of loans that require collateral, KTA allows borrowers to use funds for any needs.

But is it possible for KTA to be used for business capital? Given the high interest on KTA will affect the amount of the installments per month.

The answer is CAN, provided you consider several things before deciding to take KTA as venture capital.

3 Considerations Before Use of Unsecured Loans for Business Capital

3 Considerations Before Use of Unsecured Loans for Business Capital

As discussed earlier, KTA is legitimate to be used as business capital. However, some careful consideration is needed to guarantee the return. The 3 considerations are as follows:

# 1 Business Map and Business Trends

# 1 Business Map and Business Trends

Before deciding to take KTA as venture capital, you first need to map your business to estimate income and benefits that can be obtained.

The wider the business map, the wider the possibility of earning income. But clearly, the broad scope of business also requires more costs.

In addition to business maps, you should also know and understand business trends. The business trend in question is the tendency of businesses to be crowded or quiet at certain periods.

For example, is a date business that might run smoothly during Ramadan. Given the many that serve dates in Ramadan.

However, the sale of dates in other months may not be too crowded, it can even be very quiet.

Well, you should always pay attention to business maps and business trends so that you can estimate income every month. Do not let you fail to return the KTA due to non-current business.

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# 2 Business Ability to Pay Installments

Before you apply for Unsecured Loans for venture capital, you must ensure that business profits can cover capital.

This obviously has to be considered, because if you don’t, you could be drowned in high interest debt.

Ideally, the KTA profit and interest difference must be large. In other words, profits can pay KTA installments and still have a lot of left over as personal benefits.

For more details, try to take a look at the following 2 KTA interest benefit scenarios:

Scenario 1

Profit before paying interest and tax of 15% per month

KTA interest is 1% per month

  • So businesses like this can consider Unsecured Loans for venture capital.

Scenario 2

Profit before paying interest and tax of 2% per month

KTA interest is 1% per month

  • So businesses like this are advised to look for capital other than collateral loans, because the profit margins are very thin.

You should, carefully consider the benefits before paying interest and taxes before deciding to take KTA.

# 3 Percentage Levels Get Results As Planned

# 3 Percentage Levels Get Results As Planned

Besides estimating profits, you also need to look at the real conditions. What is the profit percentage? Is it according to plan or not?

Because your estimation can be deviated far from reality, so it is important to always see the real conditions.

For example, try to look at the following two scenarios:

Scenario 1

For example, you make a sales plan of Rp. 100,000,000 per month

Pay monthly installments of IDR 3,000,000,000

  • So businesses like this can consider Unsecured Loans for venture capital.

Scenario 2

For example, you make a sales plan of IDR 10,000,000 per month

Pay monthly installments of IDR 3,000,000,000

  • So businesses like this are advised to look for capital other than collateral loans, because the profit margins are very thin.

If you are not sure about the market and marketing techniques, then do not use unsecured loans for business capital.

8 Things Businessmen Must Know Like You about Unsecured Loans

In addition to these 3 considerations, you should also ask the following questions to the relevant bank employees before applying for KTA as venture capital.

The aim is to know clearly the various terms and conditions so that you don’t feel cheated later. You can also make a comparison of several banks to find out the advantages and disadvantages of each product before making a decision.

# 1 Interest Rate

Interest Rate

Although not the only factor that determines the decision to take KTA, the interest rate is very influential on the amount of your installments later.

Generally, interest rates will get smaller if the loan amount is getting bigger. The opposite applies.

But don’t let you borrow more than you need, consider carefully the amount and choose the most appropriate interest rate.

# 2 Tenor

Generally, the tenure of the KTA is shorter when compared to loans or loans with collateral (collateral). The maximum tenor that applies to KTA is usually 60 months or 5 years.

Well, you should always check the tenor before deciding to take KTA. Why?

Because the tenor affects the installments. You need to measure your ability to pay according to the applicable tenor.

# 3 Provision or Administrative Fees

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 KTA.

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.

# 4 Annual Fee

Not all banks impose annual fees on their KTA, 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).

# 5 Late Fee

Well, these costs need 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!

# 6 Accelerated Repayment Fees

# 6 Accelerated Repayment Fees

If your business runs smoothly, chances are that you want to pay off KTA immediately, reducing the burden right?

Unfortunately, this cannot be done carelessly, since 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 KTA before the deadline, do not let the penalty be greater than the remaining loan plus interest.

# 7 Period of Late Tolerance

Did you know, if you are late in paying installments in a certain amount of time, can you be dragged down by a debt collector at home? Yes, if you keep delinquent, then you will be chased by the bank.

Therefore, always ask for the tolerance period of delay for the bank so as not to be embarrassed because they are shouted at by debt collectors later.

# 8 Bank Transparency

# 8 Bank Transparency

The last thing customers often forget is asking about the bank’s transparency system. In other words, the extent to which the bank gives information to you.

For example, has the bank informed all the fees and penalties that apply to the KTA? Then will the bank remind you if you are late paying installments? Or will the bank inform if the amount paid is less?

Do not let the lack of transparency cause harm to you later.