Today, many banks offer credit card cash products. But actually what is a credit card cash?
Is it the same as KTA?
Before you are tempted, let’s understand carefully about credit card cash:
What are Credit Card Cash Funds?
Even though this feature has been rife, there are still many who don’t understand what credit card cash is.
Therefore, Allan Wend will discuss it clearly in this article. Credit card cash is a loan in cash using the remaining credit card limit. This facility allows credit card holders to take cash from the remaining credit card limit they have. The refund is then made in the form of a fixed installment printed on the credit card bill every month for a certain period of time.
Generally the bank will offer this facility to passive credit card users, to make a profit. Thus you need to be careful in making decisions. Don’t end up in debt that has piled up! Well, many people equate cash credit cards with Personal Loans (KTA).
Actually are they similar products? Let’s look at the discussion about the following KTA and its comparison with credit card cash!
What is Unsecured Credit?
Unsecured loans (KTA) or often referred to as unsecured loans are loan products from banks that do not require debtors to guarantee an asset. KTA is usually used for customers who are in need of fast funds. Different from some other types of credit, you can use a KTA loan for any need.
KTA is generally used for consumer needs that require fast funds, including:
- House renovation
- Business capital, etc.
Some of the advantages of KTA products when compared to other credit products are:
- The submission process is fast and easy, and does not require a guarantee
- The document is a small submission requirement
- The amount of payment can be repaid in accordance with the agreement with the bank
- The payment process is quite easy
- Can be used for any purpose
- Easily found in certain banks or financial institutions
- Fixed interest rates during the credit contract period
Besides its many interesting advantages, KTA also has several disadvantages, including:
- Limited loan limit
- The tenor of a short loan depends on the amount of the loan
- You must have a professional status with income every month
- Generally, you will be asked to open an account at a related bank
- Interest rates are quite high because there is no guarantee
- There is a penalty fee if you pay off the loan before maturity
How the Credit Card Cash Works works
So, that’s about how credit card cash works. Similar to other loan product submission procedures, with the following differences:
- Submission of credit card cash can be done directly at the bank, but it is generally done via telephone when there are offers from telemarketing. Therefore, credit card cash is often also called loan on phone .
- The tenor can be negotiated with the bank, as long as it still follows the provisions of the bank concerned.
- Installments are directly charged to credit card bills.
- The interest rates tend to be small compared to KTA and credit card cash withdrawals.
- Interest rates can be flat or effective, depending on the provisions of the bank concerned.
- There are costs of accelerated repayment fines and other fees that commonly appear on loan products.
Comparison of Credit Card and KTA Cash Funds
Because of its ease and fast process, many people equate credit card and KTA cash. In the community’s view, both are in the form of loans for those who need funds quickly and urgently.
Now, after getting to know the two briefly above, now let’s look at the differences and compare credit card and KTA cash funds.
|Characteristics||Credit Card Cash Fund||Unsecured Credit (KTA)|
|Average interest rate||0.5 – 0.8% per month||0.9 – 1.2% per month|
|Amount of funds lent||The calculation is obtained from an average of 6% to 90% of available credit card limits||Depending on income per month (usually seeing a debt ratio not exceeding 30%), generally the value is around 3 million to 150 million rupiah|
|Tenor period||1 – 1.5 years||13 years old|
|Fines or accelerated repayment expenses||Sanctions, around 5% of the remaining principal debt plus the remaining interest from cash.||Expenses, amounting to 5-6% of the remaining principal loan debt plus current interest.|
|Length of process until disbursement of funds||3-7 working days||7-14 working days|
|Requirements||Photocopy of identification such as identity card (KTP) and related bank account.||Salary slips, photocopies of credit cards, and photocopies of bank accounts within the last three months.|
Through offers from telemarketing banks or going to banks.
* Generally if you go to a bank, interest tends to be higher.
|Go directly to the bank in question|
Administration fees are generally 1%
|Administration fees are generally 2%|
|The process of taking funds||
Funds are transferred directly to the customer’s account
|Funds are taken directly by the customer|
Installments of credit card cash funds will be charged in the form of fees on credit card bills every month
|KTA payments are adjusted to the number of installments per month|
* Note: The information above can change at any time
Should you choose Credit Card Cash or KTA Funds?
Now you know some easy and practical fast loan products. But don’t be careless about making decisions without careful consideration. Remember that debt is still a pretty heavy commitment. You need to know your financial ability to pay it off before deciding to apply for a loan.
The 6 things you should consider when comparing KTA and credit card cash are as follows:
- Adjust to the loan ceiling requirements
- Adjust to the needs of the loan period
- Look for the smallest loan interest
- If you need fast funds, look for the fastest disbursement process
- Look for products with easy and simple loan terms
- Look for the cheapest product at the other cost
Do you have questions about other credit card cash? Leave your comment below . If you have questions, please submit your question in the column below. Our Financial Planner is ready to help you, thank you.