The good financial manager,

I am a housewife with two children age 3 years old. We both work, I work at a bank and a husband works in an automotive corporation in Jakarta. I always join the financial review through this issue. It is really helps us to plan. The one thing I want to ask for, is it good to liquidate our debt? As an addition I still have home credit, card credit and car credit. I have just got an inherit in great deal of money.

Jessica, USA

Answer:

Yet at this moment it is very difficult not to deal with debt, at least you are out of the red. If you force to owe, it is better to liquidate it, the faster the better. But we have to be selective which debt must be liquidated first. And certainly, there is any other need to fulfill and not all debt can be liquidated faster. There is various kind of obligation to pay the interest loan. There is fixed debt sum yet to liquidate earlier, and even there give fine if it is liquidated earlier. But there is debt can be best liquidated earlier. And now let discuss it one by one.

Now KPR (credit for home), if you take from BTN used annuity effective interest system. With this one, you will get the benefit if you can liquidate faster due to the interest burden will get smaller. But for KPR using Flat, will be different. Please check the agreement, there must be mention the clausal of fasten liquidation. If there isn’t, you may contact its customer service. It differs to car installment. If you install with leasing from financing corporation, will be difficult to liquidate fast. But to make sure, ask to it whether it can be liquidated faster or not. If there is fine for it, compare it with the save interest. If you credit from bank, it uses flat rate, the treatment will be the same like flat KPR (home credit).