Lately, the term Unsecured Credit (KTA) is very often heard. But do you know what KTA is? In general, KTA which is known as an unstable down payment is an unsecured individual loan from a bank to a prospective debtor. Customers do not need to provide guarantees or collateral, such as house certificates, BPKB, and so on just to get a loan.
Currently, almost all banks in Indonesia provide KTA facilities to their customers. However, the first bank to provide this facility was Standard Chartered Bank, which was eventually followed by other banks in Indonesia. Generally, customers who take advantage of this facility are those who need quick funds, for example to pay off a down payment on a house, business modular, college entrance fees, wedding fees and so on.
Although it is an unsecured loan, there are conditions that must be met by prospective applicants. For example, you must bring a passbook when registering because the bank can see your ability to pay the loan. So, for those of you who are messy in managing finances or even barely leaving enough funds in the account after payday, it is certain that your KTA application will be rejected.
Well, before knowing how to get a KTA, it’s good to know the advantages and disadvantages of this product.
Advantages of KTA
There are several advantages of KTA that make us want to use it, here they are:
- Exhibition to get KTA quickly and easily. The joke fund can be disbursed in less than a week. To be sure, there is no need for a guarantee to the bank.
- Few documents are required as no documents or information is required for the guarantee.
- Payment can be made in installments according to the agreement between the prospective applicant and the bank.
- Payment of credit installments is very easy because it can be done through an ATM machine. The reason is, a number of banks provide auto-debit schemes that require debtors to have accounts at credit-giving banks.
- The loan interest is fixed (rate) from the beginning to the end of loan repayment. While loans with collateral, interest rates fluctuate following the benchmark interest rate of Bank Indonesia (BI).
- KTA can be used according to your purposes, both productive and consumptive because you control its use.
- Not only banks that provide KTA, but financial institutions also offer this product so it’s easier to find it.
Disadvantages of KTA
In addition to the advantages, basically KTA also has a number of disadvantages:
- This credit does not provide an opportunity for you to get a real large loan. Usually the loan amount is limited to a maximum of five times the basic salary, although some are above that.
- The bank will immediately debit your savings balance as an installment.
- Loans are limited and relatively small, with short-term loan tenors ranging from three to five years, depending on the size of the loan.
- You must be an employee or employee or professional or self-employed with a steady income every month.
- Because this product is considered quite risky, you must create an account at the lending bank and require the debtor to channel his salary at the bank.
- Because without collateral, KTA interest rates are higher than other types of credit, depending on the lending bank.
- If you pay off the loan before maturity, you will be charged a penalty of around 5%.