On the other hand, the KTA became so popular because banks are very keen to promote it. The KTA has been regarded as a commodity product. Banks are always competing to offer the ease of the process, service, and the amount of competitive interest rates in order to gain customers.
KTA at banks have always positioned this as having superior instant credit products other than consumer credit such as credit cards, mortgages, motor vehicle loans, credit and multipurpose. The mission of the banks is only one, namely how to boost the number of new customers who used KTA.
Customers clearly benefit from this competition because almost all of the banks already have the product KTA. Some of them offer the lure of lower interest rates and lower costs of this provision to tempt potential customers.
The opening of the door to who can apply for these loans should consider the risks. Many underestimate the magnitude of the interest rate due to long payback periods. In fact, KTA always apply a flat rate which makes the amount of debt increase greatly.
It is true that KTA can be a life saver when funds are needed quickly. But always use rationality if it is being chosen for financial needs such as marriage, children’s school fees, or business purposes. More can be observed below.
●Pay KTA off in a short period of time. The longer the period, the burden of higher interest charged.
●Use KTA as a last resort. Ignore seductive offers from the banks to take an increased amount of loan even though you only need a smaller amount.
●Don’t use KTA for consumer items. Instead, you should maximise the credit card that offers a zero percent interest rate for the purchase of electronic goods or gadgets.
●Be smart by always comparing the offers of different banks that offer KTA. Choose the KTA with competitive interest rates and excellent service.
●Never miss paying instalments. A good track record in the payment of instalments will get your banks appreciation. If at a later time you need another loan, the bank will be happy to approve this as you have proved to be a good customer.