What Are Common Payment Term Options for a Loan
A credit being provided by a seller to a buyer is commonly being practiced by businesses. A credit offered by a business are number of days that the seller gives the buyer as an allowance to pay the goods being purchased.
These goods that are being sold are allowed for transfer to the buyer’s hands despite of payment to be received by the seller coming in on a future date. To discuss this, we will need to understand the types of payment terms of payday loans as this encompasses the relationship that exists between the buyer and the seller.
Common payment terms that seller allow are as follows:
- Cash – cash terms are often used by the seller if the relationship between buyer and seller is new. This restricts the buyer from getting the goods on hand prior to seller receiving the payment for the goods. This protects the seller losing products that are left unpaid especially in cases where seller is unaware of the buyer’s capacity to pay.
- Net Credit Period – This is the next most common type of payment term option that companies and small businesses offer. These net credit period are specific periods that a seller is granting a buyer. It allows the buyer enough time to either prepare the sum of money for payment or make sure that the quality of the goods live to its claim.
- Recurring Period –recurring period terms are most commonly associated with subscription payment or payment for goods that is under installment basis. This type of payments is often identified at a certain day of the month where the payments will occur. An example is payment of your utility bills that can occur during the 10th of every month during the subscription. It can also be done beyond a monthly period which can be quarterly, semi-annual or annually.
- End of Month Term – this type of payment term can be referred to and be related to the recurring period term though not completely identical. If the payment is recurring, it can occur every end of the month during the subscription or credit period. But for cases where there is only a one-time payment, this type of payment may be specific to be completed by the buyer on or before the end of the month arrives.