View random article

What Is a Payment Schedule?

A payment schedule is a document which provides specific details regarding the payments that a buyer/customer must make in relation to a specific purchase. A payment schedule will include information such as the dates when payments are due, how much each payment should be, and how the payments should be made (cash, direct deposit, credit card, etc.). A payment schedule is very useful for both the buyer and the seller, as it makes the expectations clear for both parties.

The details included in a payment schedule will vary depending on the particular purchase and the buyer and the seller. In general, however, the due dates are always present as these are critical. The first payment is indicated in the schedule, as well as the succeeding payments - up to the final payment. Provision for holidays are usually incorporated in payment schedules. The frequency of the payment dates will also vary depending on the arrangement between the buyer and the seller. Due dates may be weekly, monthly, quarterly, or even annually.

Another essential element of a payment schedule is the amount that has to be paid on each due date. Now, depending on the agreement between the buyer and the seller, the amounts may be uniform throughout the payment period. In some cases, though, the amounts may vary. Whatever the case may be, it is always necessary for the payment amounts to be stated clearly in the payment schedule.

When you make a relatively huge purchase or take out a loan, you may encounter a payment schedule. Before you sign on the dotted line, make sure that you review the schedule thoroughly to determine if you agree with the details.

Featured in Finance