√ Definition of Collateral, Purpose, Types and Principles (Full Discussion)
Definition of Collateral, Purpose, Types and Principles (Full Discussion) – In this discussion, we will explain Collateral. Which includes the meaning, purpose, types, principles with complete and easy-to-understand discussion.
Definition of Collateral, Purpose, Types and Principles (Full Discussion)
For more details, please see the review below carefully.
Definition of Collateral
In applying for credit or loans as well as financing made by debtors (customers) to financial institutions and also by submitting collateral (collateral) in the form of assets belonging to the debtor to guarantee repayment/credit accepted.
But there are also financial institutions (banks) that offer loans without the need for collateral as payment guarantees or what are known as loans without collateral.
According to the Banking Act Article 1 No.7 of 1992 which has been updated with article 1 number 23 of the Banking Law No. 10 of 1998. The definition of collateral is the ability/confidence/ability of the customer to pay off his obligations as promised.
The main credit collateral is the effort of the debtor (borrower/customer), such as inventory (raw materials, goods in process and finished goods), land, machinery, buildings, vehicles used directly for activities his efforts.
Definition of Collateral According to Experts
The following is the definition of collateral according to experts.
1. Faisal (2004)
The definition of Collateral in banking according to Faisal is the surrender of a right or power by the debtor to the bank which aims to guarantee repayment of the debt in the event of credit congested.
2. Thomas (2003)
The definition of Collateral according to Thomas is a surrender of wealth or a statement of ability to bear the repayment of an item.
3. Widiyono (2009)
According to Widiyono, the definition of collateral in banking is movable or immovable objects that are handed over to the debtor creditors who are useful for guaranteeing if conditions occur where the credit facility cannot be repaid according to the time that has been agreed set.
Collateral Purpose
The purpose of collateral or collateral is to cover the risk of loss borne by the bank if the customer is unable to pay off the credit that has been borrowed or credit failure. Or it can be called, collateral can be used as a source of credit settlement by selling it.
Collateral Types
There are two types of collateral or guarantees, namely material guarantees and non-material guarantees.
Material Guarantee
Material guarantees are the isolation of a part of the bank's assets, both tangible and intangible. A debtor provides guarantees to fulfill his obligations to the bank.
This material guarantee is divided into two, namely tangible collateral and intangible collateral.
-
Tangible Collateral
Collateral is immovable, like the land on which a building stands, embedded machines like a large factory machine. Movable collateral such as machinery, motor vehicles, inventories, gold bars and stocks. -
Intangible Collateral
This collateral includes patents, trade receivables and lease rights.
Coverage Guarantee (Not Material)
There are two types of guarantees, including:
-
Personal Guarantee (Personal Quarantee)
A personal guarantee is a statement of willingness from certain individuals to indemnify the bank against credit given to certain debtors that are guaranteed until the maturity has been agreed between the bank and the debtor (Borrowers/customers). -
Corporate Guarantee (Corporate Quarantee)
The company guarantee is a statement of the willingness of a certain company to compensate the bank for credit losses given to certain debtors that are guaranteed until the maturity has been agreed between the bank and the debtor (borrower/customer)
Collateral Principles
Mariam Darus Badrulzaman, The principles of guarantee law are as follows:
Philosophical Principles
It is the principle by which all laws and regulations in force in Indonesia must be made into the philosophy adopted by the State of Indonesia, namely Pancasila.
Constitutional Principles
It is the principle whereby all statutory regulations are made and ratified by the legislators must be based on the basic law (constitution). In Indonesia, the basic law that applies is the 1945 Constitution
Political Principles
It is the principle on which all policies and techniques in the preparation of laws and regulations are based on the MPR Decree
Operational Principles (concrete)
Is a principle that is general in nature and is used as a principle that can be used in the implementation of the imposition of guarantees.
Thus has been explained about Definition of Collateral, Purpose, Types and Principles (Full Discussion), hopefully can add to your insight and knowledge. Thank you for visiting and don't forget to read other articles.
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