A credit contract is one of the terms commonly found in KPR (Public Housing Credit) discussions. The presence of a credit agreement is very helpful for both parties, in this case, namely the lender (the creditor) and the recipient of the loan (the debtor) to provide legal protection in the event of a dispute in the future.
Because of this very crucial function, there's nothing wrong with getting to know more about what a credit contract is, who are the parties involved, what the process is like, and other important things. Sobat BFI, let's look at the following materials regarding the credit agreement.
Definition of Credit Agreement
A credit contract is a series of processes that need to be carried out when applying for a mortgage (KPR) carried out by the debtor and creditor. You can generally find this process at banks or financial institutions that offer loan products in the form of mortgages.
Meanwhile, according to the Big Indonesian Dictionary (KBBI), what is meant by a credit agreement is a credit agreement or contract. In this case, the agreement in question is in the form of a house sale and purchase loan.
In the stages of the credit process, the credit contract is the last step that must be carried out by the debtor so that the mortgage application can be approved by the creditor. Some important things that exist in the credit agreement include the terms and conditions between the two parties, such as the amount of interest, the credit period or tenor, up to late payment sanctions.
Credit Agreement Elements
As with other types of credit, there are several elements in the credit contract that are important for you to know. The explanation of the elements of the credit agreement is as follows.
1. Creditors
The creditor is the lender. In a credit contract, the creditor in question is the lender such as a bank or finance company.
2. Debtor
The debtor is the recipient of the loan. In a credit contract, the debtor is the person applying for a mortgage from a bank or finance company.
3. Trust
Trust is a belief given by the creditor to the debtor in the form of money or services that have been mutually agreed upon.
4. Deal
The agreement is an agreement between two parties, concerning the debtor and the creditor. The agreement made includes several important matters that may not be violated.
5. Timeframe
In the credit process, generally, there is a predetermined period of time for the debtor to repay the loan that has been given by the lender (the creditor).
6. Risk
Risk is a loss that occurs as a result of the misappropriation of the agreement between the two parties by the debtor, either intentionally or unintentionally.
7. Loan Interest / Repayment
Loan interest is the profit obtained by the lender from lending to the debtor. Each bank or lending institution has a different interest rate, depending on the policies they have.
Parties Involved in the Credit Agreement
In the credit contract process, there are several parties involved in it. The parties involved in the credit agreement are as follows.
1. Debtor (if you are married, you must come with your partner, husband or wife. Meanwhile, if you are still alone, you can come with a guardian, which is usually done by your biological mother.
2. Representative from the Bank.
3. Developers or House Sellers.
4. Notary. In charge of legitimizing or validating credit contract agreements. In addition, the notary also has an obligation to inform the costs that must be paid, such as notary fees, transfer of name certificate from the seller to the buyer, income tax (PPh) for the seller, and BPHTB fees (Tales for Acquisition of Land and Building Rights) as expenses taxes for home buyers.
Credit Agreement Fee
The cost of a credit contract depends on the policies set by the lender (the creditor). However, generally, the cost of a credit contract is 7% -10% of the existing ceiling value.
Credit Agreement Process
A credit contract is an agreement between two parties that is carried out in several stages. Starting from the process before the contract, implementation, until after the contract. The details are as follows.
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1. Process Prior to Credit Agreement
Before the credit agreement is carried out, the debtor is required to carry out the following stages.
- Letter of approval for credit applications from a bank or financial institution.
- Determining the time of the credit agreement.
- Obligation to pay KPR fees (House Ownership Credit).
- Prepare the required documents, such as the husband and wife's KTP (if married), Family Card, NPWP, and Marriage Certificate.
Meanwhile, the documents that need to be prepared by the seller include:
- Land certificate.
- IMB (Building Permit).
- Proof of Payment of PBB (Land and Building Tax).
- Other Supporting Documents.
2. Implementation of Credit Contracts
The second stage after you have successfully gone through the process before the credit contract is the implementation of the contract. At this implementation stage, the bank (the creditor) and the borrower (the debtor) are required to sign the existing agreement together.
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Sign the agreement between the two parties, namely the creditor and the debtor. The existing agreement contains the amount of the credit limit given, the number of installments per month, the tenor, and the rights and obligations of each party.
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Signature between the seller and the buyer. In this case, the seller in question is the developer or the party selling the property, provided that the signed agreement includes the price of the house, land, and building area, IMB, PBB, location of the house, and AJB made by a notary.
3. After the Credit Agreement
After the credit agreement is completed, the ownership rights to the house or property have changed hands with the debtor and are ready to be occupied. Meanwhile, the debtor still has the obligation to pay the existing KPR installments in accordance with the agreed agreement.
If the KPR installments have been paid off, then the bank will issue documents in the form of a Debt Settlement Letter and an Original Certificate of Home Ownership. Meanwhile, the money from the sale of the house will be transferred to the seller no later than 7 working days.
Documents Received During Credit Agreement
There are at least 7 documents received during the credit agreement, starting from the agreement to the deed of sale and purchase.
1. Credit contract agreement
Consists of documents containing agreements between two parties, namely debtors and creditors. This document is important to keep in order to avoid unexpected things from happening in the future.
2. Certificate of Proof of Right and Building Permit
This one certificate will be given as official proof that you are the rightful owner of the house you live in. This certificate is generally given together with a building permit on the land.
3. Acknowledgment of Debt and Authorization to Sell
The following document contains information regarding the debt and power of attorney to sell the building if the person concerned (the debtor) is unable to pay off the existing mortgage repayments. This document allows the bank to withdraw or sell the existing property if the debtor cannot repay the loan in accordance with the specified time.
4. Power of Attorney to Provide Dependents (SKMIIT)
SKMIIT on the credit agreement is a letter that is proof that you have legal mortgage rights to the KPR house.
5. Insurance Policy
The insurance policy is given by the bank or creditor as a guarantee of safety and compensation for the victim's family in the event of an accident such as fire and so on.
6. Credit Life Insurance Policy (AJK)
As is the case with insurance policies, AJK or an abbreviation of Credit Life Insurance is an insurance guarantee that is given to debtors as borrowers of KPR funds.
7. Deed of Sale and Purchase
A deed of sale and purchase or AJB is a document that will be received by the debtor when the existing mortgage loan is fully completed. Deed of sale and purchase or abbreviated as AJB is legal evidence of the transfer of rights to a property due to a sale and purchase process. In it there is an agreement between two parties, namely the buyer and the seller.
Even so, AJB cannot be said to be an official document of property ownership like SHM. This is because this document was issued by the Land Deed Making Officer (PPAT) and not the National Land Agency (BPN).
Things to Look For During the Credit Agreement Process
As quoted from kamus.tokopedia.com, there are several things that you need to pay close attention to during the credit contract process.
1. Be careful when reading the credit agreement, make sure that not a single point is missed or you don't understand.
2. Never sign a blank for whatever reason.
3. Pay attention to the clauses in the agreement, and whether they are in accordance with the offer letter. In this case, the suitability includes the amount of credit extended, interest rates, provision fees, administration, and other matters.
4. Don't hesitate to ask questions if there is unclear information.
5. If there is a discrepancy or there are burdensome requirements, you can apply for a cancellation of the credit contract.
BFI friends, that's the discussion regarding Let's Get to Know More Closely What a Credit Agreement is and Its Process. We hope that this information will help you to understand what a credit agreement is more easily.
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