take over
Also called: ambil alih kredit
Moving the remaining mortgage from an old bank to another bank with a lower interest rate.
What it means
Take over or credit takeover is the process of moving the remaining mortgage loan from one lender to another. The goal is usually to get a lower interest rate or a lighter installment. This process involves the new institution paying off the old credit, then issuing new credit. Families need to calculate the switching costs before deciding.
Why it matters for families
A take over can save on installments, but there are provision and admin fees, and possibly a penalty on the old credit. If the interest savings are smaller than the total switching cost, this step is actually harmful. Families also need to ensure their repayment ability stays stable throughout the new tenor. A misunderstanding can make a family switch without any real benefit.
Example
For example, the remaining principal is Rp350 million with an old installment that feels heavy. The family considers a take over to an offer with a lower interest rate. Before switching, the total provision, admin, and penalty costs are calculated first. The decision is made only if the net savings make sense.
Common misunderstanding
Many think a take over always lowers the installment. The correction is that without calculating the switching costs, the result can be zero or even more expensive.