Jakarta, CNBC Indonesia – There are a myriad of reasons why people borrow funds through online loans. It could be due to business, urgent needs, and so on.
But it’s not uncommon for someone to be in debt because they weren’t careful and took the wrong steps to pay off the loan. Life, which was calm before, has now turned into the opposite because of phone calls from debt collectors, and so on.
It is undeniable that the advantage of borrowing money is its practical process of submitting and disbursing it quickly. Not a few also think that instead of borrowing money at the bank, it’s better to borrow because bank debt is complicated.
So what happens if you currently have a loan portfolio that is out of control? Here’s the solution.
Check your reasonable debt limit
The way to find out the amount of our debt is to add up the total outstanding debt and divide it by the total value of the assets you have.
Let’s say you have a debt portfolio consisting of:
Loan debt of IDR 8,000,000
Credit card IDR 3,500,000
Motorcycle loan IDR 9,400,000
Total: IDR 20,900,000
Meanwhile the assets you have are:
Used motorbike (still credited): IDR 9,400,000
Gadgets: IDR 12,000,000
Shares: IDR 2,000,000
Gold: IDR 1,200,000
Savings: IDR 5,000,000
Total: IDR 29,600,000
Then your debt-to-asset ratio is:
20,900,000 x 100% = 70.6%
The safe limit of this ratio is 50%. If your ratio reaches 50% of assets, then this is very worrying because you will find it difficult to pay off your debts if you lose your income.
Pay off with existing emergency savings funds
Make repayments using the available emergency funds. If the emergency fund is used up, don’t forget to collect it again to the original amount.
In fact, an emergency fund is a savings that we have prepared to deal with urgent situations.
It’s not wrong to use an emergency fund to make your finances healthy. Because the more debt, the smaller the value of your net worth.
Paying off all loan debt is a good idea, but in order to anticipate the emergence of new problems, immediately review the amount of savings and assets you have.
If there are assets in use that are no longer in use, you can sell them to get fresh funds to pay off debts.
It should be remembered that do not rush to sell your investment assets except in urgent circumstances. Selling investment assets can potentially thwart your short and long term goals.
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