One payment method that is currently in great demand by the public is PayLater, where users can buy the product they want but pay for it at a later date. This will be very helpful if the user needs the item when they have no money.
However, it often happens that PayLater users experience bad credit. Situations such as bad credit make users feel uncomfortable and the arrears become large. Usually bad credit happens to someone who uses a large amount of credit but has problems when paying it off.
What is Bad Credit?
What exactly is bad credit? Bad credit is a condition where the borrower cannot pay the installments or debts. Usually because the borrower does not have money that can be used to pay off before maturity.
If the debtor or borrower delays payment for a long time, the interest to be paid will accumulate and the money to be paid will also increase. This of course burdens the borrower. Usually bad credit status is for borrowers who do not pay their installments in more than six months.
If the bad credit condition is not immediately resolved, the borrower's history will get worse and of course affect the credit score of the debtor. A bad credit score makes it difficult for the debtor to apply for a loan elsewhere.
In addition to having a bad impact on debtors, bad credit also has a negative effect on banks or finance companies that experience it, especially for company performance. Companies that experience bad credit conditions will reduce the percentage of Non-Performing Loans (NPL), resulting in a decline in financing reputation.
How to Avoid Bad Credit PayLater
Of course you don't want to experience bad credit conditions, right? Well, to avoid it there are some tips that can be applied.
1. Borrow according to ability
If you are going to apply for credit, be it at a bank or when using PayLater services, you must always remember that the money lent must be paid with a predetermined amount of interest.
Some financial experts suggest if you intend to go into debt, then the installments should not exceed 30% of your monthly income. If it is more than that, then it is certain that it will be difficult to repay the debt. Then, immediately set it aside at the beginning of the month, after you receive a salary or income, which is 30% of what you get for debt payments.
2. Don't Use PayLater for Consumptive Needs
We recommend that you use PayLater or credit not for consumptive needs, use it for urgent matters and cannot be postponed, so that the loan you make will be useful. This method can also avoid being addicted to buying goods with PayLater.
3. Always Pay Installments On Time
The most important thing is that when you choose to use PayLater, you must pay the installments on time before maturity. If you pay more than the deadline, there will be a fine that can increase your expenses. The more you are in arrears to pay the installments, the more fines that will be imposed and accumulate.
4. Cut Daily Costs
If you already have PayLater installments with bills that exceed your financial capacity, the only way is to reduce your daily expenses. You have to restrain yourself wisely so as not to buy things you don't need in order to be able to pay off the installments and there will be no bad credit that can cause your credit score to be bad.
5. Use a Trusted and Licensed PayLater Service
Finally, so that you are safe in PayLater transactions and don't experience bad credit, only use a trusted and licensed PayLater service.