Return to Uzone News Portal
Uzone.id – PayLater services are increasingly popular in Indonesia. The convenience of buying desired items and paying for them later is a major draw for people to use PayLater.
According to the ‘Indonesian e-Commerce Consumer Behavior 2023’ report published by Kredivo and Katadata, at least 45,9% of people have used the PayLater method for online shopping, bill payments, and other purchases.
In 2023, 28,5% of survey participants incurred debts between Rp500.000 and Rp1 million as a result of online shopping with PayLater.
Using PayLater for its convenience can be risky for users who don’t use it responsibly. The service has the potential to harm personal finances, so it’s crucial to carefully weigh the decision to use it.
Here are five things you need to consider before using PayLater:
1. Evaluate needs
Before deciding to use PayLater, ask yourself if the item or service you want to purchase is truly necessary or just a fleeting desire. Sometimes, we get caught up in the urge to buy something just because of the convenience PayLater offers.
If buying the item or service can be postponed, consider paying for it directly when your funds are sufficient.
2. Don’t exceed your income
Even though PayLater is very easy to use, you should not end up with “more debts than income.” Ensure that your expenses after paying installments do not exceed your income or monthly budget.
Before using PayLater, make sure you have included the installment payments in your monthly budget. Carefully calculate the amount to be paid each month and ensure your monthly income is sufficient to cover these payments without disrupting other needs.
Remember, using PayLater without proper planning can lead to significant financial difficulties later on.
3. Understand Terms and Conditions
Before using a PayLater service, it’s crucial to comprehend the specific terms and conditions associated with it. PayLater users frequently neglect to consider the interest rates that are applied.
Read the terms and conditions carefully before applying for PayLater. Some PayLater services offer 0% interest but with a 30-day repayment period. By understanding all these conditions, you can avoid unexpected costs that could burden your finances.
4. Be aware of service fees
PayLater applications often charge service fees to users. For example, borrowing Rp1 million with a 30-day tenure and 0% interest, may result in users paying more than the borrowed amount.
Don’t be upset, this highlights the importance of reading the terms and conditions, especially regarding service fees. These fees usually appear on the customer agreement page before the funds are disbursed.
5. Beware of penalties
Remember, a loan is a debt that must be repaid. Each PayLater (or even credit card) loan has a repayment period. If you accept a 30-day loan term, you must repay within 30 days of borrowing. Going beyond this timeframe typically results in incurring a fine.
Moreover, late installment payments can negatively impact your credit score recorded in the Financial Information Service System (SLIK). The Financial Services Authority (OJK) classifies scores into five levels: Current, Special Attention, Substandard, Doubtful, and Bad.
Additional Tips
If you decide to use PayLater, always record every transaction made. Keeping track of your expenses allows you to be aware of the overall debt to be paid back and the deadlines for repayment.
Create a simple list or use a financial recording application for each transaction made. This habit will help you manage debt better and prevent excessive debt accumulation.
Lastly, prioritize making installment payments on time to avoid high penalties and maintain a good credit score. Timely payments also help to steer clear of amassing debt, which could become a significant burden in the future. If possible, strive to settle installments before the due date to avoid extra interest.
