Discipline to pay the debt is obligatory. Do not be late paying even for a day or two. It could become a habit. If it has become a habit, over time even in arrears in debt. In the end the credit collectibility turned ugly.
Credit collectability can be likened to a report card at school. If the report card is good, you can move up the class. Meanwhile, if it is ugly, you are asked to do repairs first so you can move up the class.
Well, in the eyes of a bad credit collectibility bank means that you are a debtor who likes to falter in paying debts. If you just want to apply for a loan such as a KTA or KPR, the bank will definitely reject it because of your credit collectibility.
Of course this is really uncomfortable. When you were planning on wanting to have a house, uh, the mortgage proposal was rejected. Plans failed, financial goals were not achieved.
Actually, how important is credit collectability? For the answer, let’s find out in the following review.
What is credit collectability?
The above has already been explained with what parable credit collectability is. From the definition as explained in Wikipedia, the collectibility of credit is the classification of installment or loan status along with interest.
With the credit collectibility, the bank can find out the quality of the debtor. Good Lender (BI) already regulates the quality of the credit itself listed in Good Lender (BI) Regulation No. 7/2 / PBI / 2005 concerning Asset Quality Rating for Commercial Banks.
In determining credit quality, BI refers to three assessment factors, namely:
- Business prospect
- Performance (performance) of the debtor
- Ability to pay
From the above factors the bank will review in more detail. Starting from business prospects, banks see the potential for business growth, market conditions, quality of management, support from groups or affiliates, to efforts made by debtors to protect the environment.
From the debtor’s performance, the bank will analyze earnings, capital structure, cash flow, and sensitivity to market risk.
Meanwhile, from the ability to pay, banks see the accuracy of the principal and interest payments, the availability and accuracy of debtor financial information, the completeness of credit documentation, compliance with credit agreements, the appropriateness of the use of funds, to the reasonableness of the source of payment obligations.
By considering the factors above, the bank then classifies the credit quality or credit collectability of the debtor as described in the list below.
These are 5 credit collectibilities that determine the passage of a loan application
As noted in Good Lender Regulation (BI) No. 7/2 / PBI / 2005, there are five credit collectibles that are the bank’s size to approve or reject your loan application.
For personal, the credit collectibility is seen from the ability to pay the debtor. What is the credit collectability meant?
- Quality 1 Current status, this means that debtors always pay debts on time, aka current loans.
- Quality 2 status in Special Mention (DPK), this means the debtor is in arrears or debt payments of 1-90 days.
- Quality 3 status of Substandard Loans, this means the debtor is in arrears in payments of installments or debts of 91-120 days.
- Quality of 4 Doubtful statuses, this means the debtor is in arrears in payments of installments or debts of 121-180 days.
- The quality of the status of 5 Loss, this means the debtor is in arrears in installments or debt more than 180 days.
From the list of credit collectibility above, there are credit qualities called performing loans and non-performing loans. Quality 1 is clearly called a performing loan, while quality 2, although somewhat problematic, is still a performing loan.
While quality 3 to 4 is called non-performing loan. Banks strongly avoid the existence of non-performing loans. Because the existence of non-performing loans can make banks unhealthy.
As a result, banks may lack capital to provide loans, which in turn will cause difficulties in fulfilling requests for credit or loan applications. The maximum non-performing loan (NPL) limit is 5 percent.
To see how high the credit collectability is, you can check on the Financial Information Services System (SLIK) of OJK. There you can check credit history or history in the banking language. Individual Debtor Information (IDI) Historical.
This is how to keep credit collectibility quality 1
So that credit quality is always quality 1, there are several ways you can do it. First, always be disciplined to pay installments prematurely. Second, pay off existing debt, not to not.
Third, always use a credit card that is less than the limit and avoid making minimum payments. Fourth, apply for a loan with a maximum installment value of 30 percent of income.
That was information about credit collectibility. By knowing the information above, you become more careful in debt. Hopefully the information above is useful!