Online Loan Funds without collateral these days are indeed rife among the people. How not, the Peer to Peer Lending platform is very helpful for the people of Indonesia, including those not yet reached by banks. Easy process, instant approval and plus online loans guarantee fast liquid funds. Very helpful for people who need emergency funds or for venture capital.
However, behind the convenience for convenience offered by this online loan, not a few are wrong steps when borrowing money through fintech, then regret that they have to be trapped in a pit-digging hole to close the hole. Without thinking about paying off their debts quickly, they decided to make another online loan to a different fintech lending.
This is not the right solution, it will make the debt unresolved. Then, how do we not dig a hole in the hole to use funds from online loans?
Place Debt Loans Online As Priority
When successfully getting capital from online loans, it means that there must be something to be paid back. In addition to having a monthly list of needs that must be met, debt is also part of a very important list. When we owe, there are funds we must return and it is our responsibility.
When we can put debt as a priority, then we can hold back other desires that we don’t really need. For example, reducing spending hanging out in expensive places, choosing cheaper shopping items, or reducing the budget for traveling.
Use loans for productive needs
Pay attention to the purpose of your loan application. Because, many people who abuse the convenience of borrowing money online to meet their consumer needs. Before borrowing money online, first categorize your debt needs. Is it included productive debt, or even consumptive?
Productive debt is debt that is used to meet needs, not wants. The value of assets purchased by debt will increase over time. Examples of productive debt for example for business capital, health costs, education, or additional wedding costs.
For productive needs like that, of course no problem borrowing money online. Meanwhile, if your loan is used to meet consumer needs such as to buy the latest gadget, then you should undo your intention. Because, people who have consumer debt tend to be more at risk of being entangled in debt.
Calculate your ability to repay the loan
Even if you owe it for something productive, it doesn’t mean you don’t take into account the ability to pay it back. A healthy installment ratio will not exceed 30% of the monthly salary earned. More than that, financial flow might actually go awry.
If the debt burden has exceeded this limit, try to reconsider the desire to take on new debt. Because if you don’t pay attention to it, you might even dig a hole to close the hole. Calculating the debt ratio is also very important so that we can prepare funds to pay our responsibilities. Do not let your daily needs be disrupted because the amount of debt exceeds your ability!
Choose an online loan institution with low interest rates and long tenures
Online loans usually charge higher interest than conventional credit institutions such as banks. The process of registering and disbursing funds that are fast paced is one of the reasons why the interest is higher. However, many online money-lending applications make use of their advantages to charge unreasonably high rates, even reaching 1% -3% per day.
In fact, secure online credit providers usually charge interest that is not far from the bank. Therefore, examine the amount of interest again. In addition, check again the additional fees charged by them. A secure online lending institution will certainly expose all interest rates and additional costs such as administrative fees, penalty fees, and other costs transparently, before the prospective customer approves the loan.