Jakarta, CNBC Indonesia – The case of a civil lawsuit regarding debts filed by Wulan Guritno against his ex-girlfriend Sabda Ahessa, is still attracting public attention.
As reported by detik, Wulan filed a civil lawsuit with case number 5/Pdt.GS/2024/PN JKT.SEL. In the lawsuit, there is a fee of Rp. 396,150,000 which Wulan Guritno gave to Sabda Ahessa as a bailout fund for house renovations.
As a result of the bailout incident, Wulan also asked for compensation of IDR 100 million, and there was also a claim for interest of IDR 10 million per day if Sabda experienced delays in payment.
Borrowing funds to renovate a house is actually not wrong, but before borrowing funds someone must understand their financial health first. The following are things you can pay attention to before borrowing funds.
Do not borrow funds from individuals
You might think that borrowing funds from individuals, for example parents, in-laws, brothers, sisters, friends or girlfriends, is something that can be prioritized because there will be no interest charges.
But make no mistake, delays in paying can have other consequences that have the potential to damage our family or friendship relationships.
Rather than borrowing funds from those closest to you, it would be better to plan the renovation process wisely and save regularly. Or you could just use existing emergency fund savings.
But if renovation is something urgent to do and your own emergency funds are still lacking, choose a loan from an official financial institution and pay attention to the things below.
Get to know the ratio of debt installments to income
You may often hear financial advice that says that the maximum safe installment is 30% of your income. The 30% value is the ratio of debt to income.
When your installments exceed 30% of your income, you will have difficulty meeting your daily needs, saving and investing.
It is worth noting that the 30% value itself is the value of the “entire debt bill.”
For example, you have motor vehicle installments equivalent to 20% of your income, and you intend to take out credit for home renovations. You must ensure that new debt installments for home renovations do not exceed 10% of your income.
Get to know the debt to asset ratio
It's possible that your debt installments are still within reasonable limits, but not your total debt.
To find out whether our debt is too big or not, you can use the debt to assets ratio. This ratio value will measure the amount of unpaid debt, compared to the total assets we own.
The formula to find the value of this ratio is:
Total Debt x 100%
Total Assets
The maximum value of this ratio is 50%.
If your ratio value is above 50%, then you should be alert because the total value of your debt is more than half of your total assets.
Just imagine what would happen if you lost your income and you still had to pay off those debts? Your total assets will decrease drastically because you have to sell them to pay off these debts.
And if most of your debt is consumer debt, then this is also quite dangerous because consumer debt will only erode your wealth.
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