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What are payment plans and what happens if you miss a payment?

I would like to know what options are most likely available and how they work and the consequences of not paying them.

#money #payment #paymentplans #nursing

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Tanya’s Answer

Payment plans are typically when you buy something, or get a loan, and they repay it over an arranged period of time. Each month, you would make a payment that pays off part of the loan, and well as some interest that is charged for allowing you to borrow the money, or purchase a product over an extended period. If you do not make a payment, they can repossess the item you purchased, garnish your wages, and report bad ratings on your credit report.

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Ro’s Answer

I think Tanya's response was pretty on point. Something else you should be aware of is the APR (Annual Percentage Rate) or interest % that is charged for your payment plan. For example, let's say you owe $1200 total, and choose a one year payment plan. Without interest, that would normally be $100/month.
However, if there is 10% interest, then you actually will owe $1320 total, meaning $110/month.
Be sure to ask about the interest - this will be extremely important when you borrow large sums of money (tuition!). Usually the best loans are Federal loans that have a locked in low interest rate.
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Marco’s Answer

Agreed with everything said here. Just look out for deals that are too good to be true and read the fine print! Some companies may offer you "no interest" loans but in reality you won't be charged interest if you pay the loan within a specific window of time. If you don't then all the interest that was not charged will now become payable and you will continue to incur interest on the unpaid balance of your loan. Stick with something that is a fixed rate and offers flexibility for pre-payment without penalty. There are also plenty of websites that allow you to "shop" for loans so you can compare the various terms. Hope this helps!
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