The Rules of Debt

As time progresses, human needs are increasing. Many expenses must be allocated to support the fulfillment of life's needs. Various expenses need to be managed appropriately so that there is no deficit, namely expenses that are greater than income. Deficit is one of the trigger factors for someone to go into debt.

Productive debt vs Consumer debt

Currently, the forms of debt are increasingly diverse. However, based on fund management, there are two types of debt, namely productive debt and consumer debt. Even though debt often has a negative connotation, in fact there is one type of debt called productive debt. Characterized by increasing asset values and being able to provide income in excess of the amount of debt installments.

What can be emphasized in productive debt is getting financial benefits, for example investment, business capital, working capital, or purchasing primary needs such as houses and vehicles to help with work activities. From this debt activity, consumers get more benefits such as increasing future income, energy efficiency, or time effectiveness financial control and consumer

1. Debt

To income ratio, to ensure whether the debt ratio is in accordance with the amount of income received.

2.Ratio of total debt to total assets

To measure the debt ratio by comparing total debt and total assets and seeing how much debt affects asset management.

3.The ratio of net income to debt payments

To measure the ability to pay debts smoothly These three rules can be applied and taken into consideration when you want to get debt into. However, you need to realize that if you do have to take on debt, it should be productive debt that is meant to support your needs and increase your income in the future.

M. Yasin Syaifullah Saya adalah seorang mahasiswa aktif di salah satu Perguruan Tinggi swasta. Dan saya senang menulis untuk berbagi | Iam a college student and I like writing to sharing.