Installment plans and partial payments? Not always just benefits
Buying and selling goods or services on credit seems to be generally accepted today. The temptations are omnipresent. Credit cards are being used more and more. Online, you are increasingly getting the option to pay afterwards.
Offline stores follow the web shops by making large purchases “financially bearable” by splitting the purchase amount into partial payments. Installment plans are also increasingly common. Installment plans and deferrals seem to give people financial breathing space. But is it just roses and moonshine? Are there only advantages to these diversified payment options or are there also disadvantages?
A solution to financial stress?
Installment plans can offer many benefits. You can create more financial space so you don't have to struggle to the end of the month when you're short on cash. In addition, a written agreement also reduces money stress and a more positive financial perspective. When you have the payment automated via your bank, you don't even have to worry about making the payment on time. Finally, you avoid high court costs that you would otherwise be charged because you were unable to make the full payment.
Partial payments, installment plans, etc. seem to be a good solution for financial stress. But is there no catch anywhere? Of course, yes. Ultimately, you pay more than the original invoice amount due to the interest that is charged. In addition, there is a chance that you will act hastily and buy more than you can afford financially. This is because many small partial payments form one large monthly payment. Moreover, such systems provide a false sense of wealth. For large purchases such as a house or a car, installments are usually used, but in practice, we have noticed that this trend is also rapidly gaining popularity for smaller purchases.
Feeling of obligation among 'creditors'?
As a supplier of goods and services, you may also feel compelled to go along with these changes. Know that you can never be obliged to do this! However, it can be seen as increasing reputation, increasing potential customers, etc. If a provider of the same goods does this, it can of course also cost you customers. But the resources of a small self-employed person are not the same as those of a large chain. You must wait for payment, but your ongoing costs must also be paid monthly. In addition, it also provides more time and energy to follow this up.
However, a customized payment solution can offer relief. By talking, a solution can be found that works for both parties. Is there a temporary problem? Then delaying payment might help. Is it a structural problem? An installment plan may then be a solution.
Installment plans, they're neither good nor bad. It is particularly important to look at the concrete situation and the associated concrete problems. In this way, a customized approach can be provided. Modero also uses this approach. Not a “one size fits all”, but a solution that benefits everyone involved. With our Solid Score, we can already identify a large part of the debtor's financial capacity — which, of course, does not mean that unforeseen circumstances or an acute financial problem can arise. Through a quick and personal contact with the debtor, we can act quickly and find a solution already in the amicable phase. The outstanding claims are paid and the costs are kept as low as possible. Can't the debtor pay yet? Then we will guide him to appropriate debt counseling.
Can we help you? Contact us via info@modero.be or 03 237 37 37.