Signs of Excessive Debt and How to Overcome Large Debt


Nowadays it feels easy to buy the things we want even though there is not enough money to buy them. All these conveniences are answered with a credit system, be it a credit card, Credit without Collateral, Home Ownership Credit, Apartment Ownership Credit, Motor Vehicle Loan, etc. Of course, the credit does answer your need to buy an item quickly, you just need to pay it in installments little by little until it is paid off. It's just that, you also have to remember that this installment system must also be accompanied by a clear ability to pay. Why? Because often many people start paying in installments without taking into account their ability to pay, so they end up getting into debt.

Your healthy financial condition can lead to problems if you don't monitor the debt you currently have. So, even though we often use credit cards or other credit to banks, how do we know that the amount of debt we have today is already excessive and not healthy anymore? Come on, let's just look at the signs below:

Total Bill per Month More than 40% of Salary

The midsection of a man calculating bills on mobile phone-7 The most obvious step to starting to see if the debt you currently have is excessive is to collect all the bills. Try to start accumulating all types of debt you currently have, from all credit card installments, KPR, KPA & KKB installments (if any), and installments (if any). If the total installments per month of the whole turn out to be more than 40% of the salary you get per month, it means you have the potential to get into debt problems in the next few months. This can still be overcome if you still have additional income, for example through a side job.

Starting to Stack Up Installment Payments because they feel heavy
Another sign to find out whether the debt is getting excessive is when you have started piling up monthly bill payments sent from the credit card issuing bank. Usually, one of the 'sickness' people who avoid problems is to try their best not to care and take care of it at all. When in fact you are piling up payments because you are no longer able to pay the accumulated installments that must be paid every month. If you come across this sign, be careful! Maybe you already have to find a way out to get rid of a lot of debt.

Start Paying Minimum Payment
Another sign that can be seen is when you start regularly paying credit card bills with the minimum payment method. Minimum credit card payment is a payment made by credit card owners by only paying (on average) 10% of the total arrears + bills that have not been paid off in the previous month (if any). This step is very popular because when you have accumulated debt, but you have insufficient money, you can remain free from the blacklist by paying a small amount.

Payment by making a minimum payment is just accumulating debt without completing it at all. You still can't avoid the interest that continues behind the payment of credit card bills with a minimum payment. Besides, if you persist in making payments using this method, all you have to do is slow down debt repayment, so that you will be freed from the shadow of heavy bills longer.

How to Overcome Multiple Debt Problems
Happy cheerful young Asian male in glasses smiling and using a laptop in the cafe After knowing the signs, the next step is to find a way out so you don't have to get into a lot of debt. One of the ways to deal with a lot of debt is by refinancing.

Refinancing or commonly referred to as debt consolidation is a step taken to make it easier for you to pay off a combination of several types of debt into just one debt to a non-bank financing institution (for example multi-finance and peer to peer lending companies).

Some of the Advantages of Refinancing

You no longer need to bother paying debts separately to several banks at once. So by consolidating debt, the entire payment process for various credit card debt or is only done through one door.
Easing installments per month: The main purpose of refinancing is usually to help debt owners to be able to pay installments until it is paid off, of course, this has an impact on lower installments so as not to complicate things.
It can be paid with an agreed installment tenor: Of course, this has to be agreed upon in advance with the borrower, normally the installment tenor can run up to 24 months (two years).
Types of Debt Consolidation Programs

There are two types of debt consolidation, namely using collateral and not using collateral. Both have their advantages and disadvantages and can be obtained following the terms and conditions provided by non-bank financing institutions.

There are two types of debt consolidation programs available:

Consolidation with Collateral

As the name implies, this type of debt consolidation is done using collateral. In most cases, usually, the type of asset that can be pledged is property, especially a residence. In other cases, you can also give the car as collateral.

To participate in a consolidation program with collateral, outstanding debts can be in arrears or smoothly. So, even though you are not in arrears, you can take this step as a preventive step to pay off debt with relief while still having funds. For those who are in arrears, a financial consultant will also help carry out the negotiation process before the debt is consolidated. So, you can pay off the debt even lighter.

financial consultants provide this type of program by working with several well-known multi-finance institutions in Indonesia such as BFI Finance and Smart Finance, to assist our clients in obtaining a debt consolidation program.

Unsecured Consolidation: Card Cutter and Card Cutter Plus

Of course, this type of debt consolidation is more suitable for those of you who don't have assets. financial consultants work with a well-known peer to peer lending company in Indonesia,  financial consultant, to provide this program to our clients. As one of the startup companies in the financial technology sector in Indonesia, of course, you already know financial consultants as a company that provides loans with low-interest rates. There are two types of consolidation programs without collateral:

Card Cutter

In this type of program, you can consolidate several credit card debts / with a minimum total of 10 million Rupiah. In the Card Cutter program, debt conditions are usually not in arrears. You don't need to use any collateral, just register in the Card Cutter program (assisted by a professional financial consultant), then several types of debt will be replaced by one new debt.

Card Cutter Plus

In this type of program, you can consolidate several credit card debts / with a minimum total of 10 million Rupiah. The difference is, the debt conditions are usually in arrears, then before they are consolidated into one, the debts will first go through a negotiation process to get a discount. Of course, this will make your debt even lighter, and easier to pay off. As with Card Cutter, you also don't need to use any collateral. Simply enroll in the Card Cutter Plus program (assisted by a professional financial consultant).

Refinancing Application Process
When applying for a refinancing program, of course, you cannot just choose a financial institution. This wrong step can lead to additional nightmares, which will make it difficult for you to pay off all outstanding arrears. To overcome this, you can rely on references from companies that provide debt management programs, because these companies usually have the best strategies that can help you get rid of debt, along with recommendations from trusted financial institutions, which can help you get the best refinancing program and help. free from debt.

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