5 Tips for Buying the Right Credit Car

Need a car but don't have the funds yet? Tech Education can buy it by applying for credit. Currently, many credit providers provide services for repaying motorized vehicles such as cars and motorbikes. But Tech Education still has to know tips on buying a credit car so you don't get caught in fraud or debt.

The fact is that to this day there are still many victims who have been scammed by irresponsible people. It is time for Tech Education to become part of a group of people who are smart and wise when they want to apply for credit. If so, without going into detail, let's look at the tips for buying a credit card below!

What are the Tips for Buying a Credit Car to Keep Your Finances Safe?

The improving condition of the Indonesian economy after the pandemic has provided fresh air for people who have planned to apply for a car or home loan.

The more people who apply for credit, the better it is because it can boost purchasing power while at the same time increasing economic growth.

But don't take one wrong step so that you don't get caught in fraud or debt. Here are some tips on buying a credit car that you need to understand.

1. Check the Amount of the Down Payment and Other Fees

Before the credit agreement is signed, you need to understand the amount of the down payment that must be paid. This is important because the amount of down payment you pay the first time will affect the remaining installments that need to be paid in the following months.

Take another look at all the detailed costs that you have to pay such as administration, fees, and so on. Don't forget to check the existing tenor. Usually, the tenor provided varies.

You can choose from a period of 1 year to 6 years. But this will return to the credit provider that you use. In essence, make sure you understand all the costs and tenors well.

2. Check Personal Finance and Credit Data

The selling price of a car that is not small makes you need to carefully consider whether the current personal financial situation is enough to pay the installments until it is finished. Don't force yourself to buy a car with an unstable financial situation or have other unfinished installments.

Also, check the credit score that you have. The credit score is one of the assessments that will determine whether the application will be accepted or rejected. Make sure that all credit data is correct because it is not uncommon for data problems to become a barrier to applying for credit.

3. Understand the 5C Principles

The 5C principle is one of the tools used by credit providers to determine whether you are creditworthy. The 5C principle consists of Character, Capacity, Capital, Condition, and Collateral. Here's an explanation of each:

Character is a principle that assesses the personality of a prospective debtor who has the commitment and good faith to complete the installments to the end.
Capacity refers to the ability of prospective debtors to manage their finances.
Capital is the value of the assets owned by the prospective debtor when applying for credit.
Condition refers to external factors that can influence prospective borrowers when making payments. Several factors such as age, the country's economic conditions, and so forth.
Collateral is an aspect of the assessment that determines whether the assets of the prospective debtor meet the credit application requirements or not.

4. Choose a Guaranteed Secure Credit Provider

Currently, there are many and varied parties that provide credit services. You can choose financial institutions such as banks or online credit from financial technology (fintech). Both of them provide credit services but have some differences regarding terms, guarantees, interest, and tenors.

That's why you need to choose a credit provider that suits your needs and financial circumstances. Do not let the installments paid per month are too large because the interest rates are also large.

Apart from that, you also need to make sure the credit provider you choose already has permission and legality from the OJK. Make sure the credit provider you choose doesn't just offer the convenience of "too good to be true" but also complies with applicable regulations. Pay Julo's online bills

5. Create a New Financial Plan

You must already have a financial plan that has been running until now. But with the addition of car loan installments, you have to change your financial plan according to expenses in the coming month.

You definitely can't keep spending the same expenses when you have a car installment. If this continues, your financial situation will certainly swell.

That's why you need to make a new financial plan that fits the circumstances next month. Rearrange the amount allocated for each need so that the income you receive per month is sufficient to meet all aspects of life.

Use these 5 tips for buying a safe credit car to maintain Tech Education's financial condition. Hopefully, the information above helps Tech Education to prepare themselves and their finances when they want to apply for a car loan.