The payment is defined as the transfer of money, assets or services from one party to another party for exchanges of goods, services or assets. The payments are made in many forms one of the forms is barter, exchange of goods and services and another modern method of payments are money, cheque, debit, credits cards or bank.
Different modes of repayments:
- Cash payment: The cash mode is one of the oldest payment options. The buyer pays for the good, services or assets in the form of cash and the seller issues a receipt for the payment.
- Telegraphic transfer or mail transfer: The cash is deposited along with other charges by the payer in the bank that has the branch at the payee’s place. The bank telegraphically informs the branch office to credit the amount in the payee’s A/C.
- Money order or postal order: The payer can make payment through money orders and postal orders. Most of the people prefer the postal orders because in the postal order the money can be collected and enchased at a time. The postal order is safer than the money order.
- Bill of exchange: The payee will receive the money before the due date with discount. The bill can be transferred from one person to another person and it enables the buyer to buy the goods without making an actual payment and it can be made in the later days.
- Cheque: The cheque payment is the convenient and safer option of making payments. The bank gives the chequebooks to the persons for making the payments and the bank will cross check with the person before issuing the cheque.
- Promissory note: A promissory note is the writing document that contains a sign of the maker to pay to the certain person at the particular time and specified sum of money.
- Bank Draft: The bank draft is paying money drawn from one branch of the bank upon another branch of the same bank. It is useful for transferring funds from one place to another place safely.
The loan repayment is made under a certain term and conditions. The borrower accepts to pay back to the bank or financial institutions based on the conditions.
- Fixed-term: while taking the loan the borrower has to select the term period of paying back the loan. The bank offers different term periods for different loans. The borrower has to make the complete payment within the fixed term period.
- Fixed Monthly payment amount: Like as the fixed term bank also offer the fixed amount for making the monthly payments. The borrower has to pay the fixed amount to the bank every month if failed to pay then the borrower has to pay penalty for the late.
Variable Vs Fixed:
The most of the loans are fixed loans. In the fixed loan the payments or term periods are fixed, whether in regards to the interest rate or routine payments. The fixed loans are mortgage loans, auto loans, students etc. whereas the variable loans are the loans that may change based on the inflation rate or any other bank rules and regulations. The variable loans are credit card payments etc. As the credit card payment will vary based on the usage of credit card and payments made.
The components included in the payments calculator are:
- Loan amount: The total loan amount borrowed.
- Loan Term: The term period for which loan is borrowed.
- Interest rate: The interest rate that has to be paid on the loan amount.
- Monthly pay: The fixed amount that has to be paid monthly.
This payments calculator is used to evaluate the fixed monthly payments of the loan or loan term for fixed interest rates. There are two different parts of this payment calculator one for the fixed term and other is for fixed payments.