Credit is a financial facility that allows a person or business entity to borrow money to buy something related to their needs, then pay it back within a predetermined period of time. This loan can be between banks and individuals or business entities, but it can also be between individuals and individuals. But the credit that we will discuss this time is credit originating from the bank. For example, if you are an entrepreneur who needs additional capital, you can borrow some money from the bank to develop a business that is run.
To be able to borrow money from a bank, first of all a prospective debtor (borrower) must meet the various requirements requested by each bank. These conditions are usually related to several important documents such as salary slips or business income, identity, and other documents. If these requirements are met, the bank will conduct a survey of your place of business or residence.
This is very necessary so that the bank can have an actual picture of your financial capabilities.
Each loan certainly has risks for its creditors or financiers. If the debtor is not responsible for returning the borrowed money, the bank will lose money. Therefore the bank needs to know the risk profile in the loan or a picture of the ability of the debtor to return the funds borrowed. If the ability to pay debtors is considered risky, the interest on the loan will be higher. Assuming that the chances of the debtor not paying off the loan are relatively high.
If the survey results state that you are worthy of a loan, the bank will provide loans that are adjusted to the risk profile. But before a loan is given to a debtor, the bank and debtor must first make a credit agreement or credit agreement agreed upon by both parties. In the agreement there are all details regarding the loan For example the loan period, the amount of installments, loan interest, late penalties, penalties, rights and obligations of both parties, and things that can arise if the debtor fails to pay the loan. If the agreement has been agreed upon and ratified then the bank will provide a loan to the debtor.
Credit Quality Classification
Not finished until you get a loan, you still have to pay attention to credit quality classification. Every person who borrows money from a bank will have an assessment of credit quality classification. What is meant by credit quality classification?
Each debtor has a loan risk profile as discussed earlier. This risk is related to the possibility of you paying off the debt. After getting a loan, this risk will be ‘proven’ by seeing how you pay off the debt. Every time you pay a loan installment, the bank will have a record of the payment, both on time and late payment. Your habit of paying credit installments will be assessed by an assessment called credit quality. This classification is divided into several categories as follows
This collectability is your value in terms of loans
The greater the collectability rate, the bank will find it difficult to lend to you because it is considered too risky. If you are recorded in collectability 1, then you are a disciplined debtor because you always pay the loan installments on time. You will not be complicated if you then want to take another loan. Even if a debtor has good collectability, the bank can trust the debtor to provide a larger loan. But if it has entered into collectability 3, 4 and 5, your loan has been included in the category of non-performing loans or commonly called Non Performing Loans ( NPL ).
The collectability data of each debtor will be recorded in the MaryBank Debtor Information System (SID) or commonly referred to as BI Checking. This data can be accessed by all banks in Indonesia that have been registered with MaryBank SID. That is, any bank can find out how you perform in paying off debt.
Maintain Good Collectability
Everyone who borrows money from a bank will be assessed through credit quality classification. This data can be accessed by all banks in Indonesia because it is registered with MaryBank SID. If you currently have a loan to the bank, make sure to always pay the installments on time. Do not let you have recorded the collectability of problem loans. Maintain your collectability in number 1 so that you will have no trouble if you then want to borrow funds from the bank for other needs. Even with good collectability you can be trusted by the bank to borrow more funds.
Do you have experience in taking credit and knowing credit quality classification? Give your experience in the column below, thank you.