Important Functions of Deferred Payment in Different Sectors

Deferred payment is a financial agreement between the lender and the borrower. It allows the borrowers to postpone the payment of the purchased possessions partly or entirely. Deferred pay comes in many forms and is used in different sectors like agriculture, education, real estate, etc. Therefore, let's focus on the following points to gain an insight into the topic.

Deferred Payment

Different Sectors of Deferred Payment

Following are some of the core areas where deferred payment works:

  • Deferred Payment in Agriculture

One of the most important reasons for using this type of mortgage in agriculture is for tax purposes. If you are a farmer, it is just apt for you! You can defer the payment for the next corps year. It helps you reduce the tax burden and also provides more liquid cash to pay the workers. It is very similar to an instalment sale. However, such deferment is only valid for farm products and other specific goods

  • Deferred Payment in Education

The most beneficial use of deferred payment is perhaps in the education sector. Many students cannot afford higher studies in colleges or universities due to financial hardships. A deferred pay can help students in delaying their fees. Though in some cases such deferment imposes penalties for late fees, at least students don't need to leave their studies!

  • Deferred Payment in Real Estate

Deferred payment has great use in real estate. It exists to get a no-interest loan that requires no previous adjustment. The borrower takes the loan by turning over the title of his property. If you are also thinking of taking such a loan, you can use this payment mode. However, if you sell the property or give its possession to someone else for any reason, you have to pay the loan amount at that time.
People generally take help of such deferment when they need money to renovate their home or repair the older ones.

  • Planning of Payment

Though deferred payment refers to the postponing of the cash; But, you can pay the money during the interval for some cases. If you accept any deferment payment plan, make sure you read it thoroughly to know the payment time accurately. Lastly, you can negotiate with the creditor to have a better deferment plan if you opt for such a payment mode!

  • The Retail Consumers

You can use deferred payments while running promotional sales and offers. You may find electronic shops that use such payment modes frequently to tempt customers. A customer can take the help of a to defer payment by an arrangement. For example, he will pay only the interest for the first six months and after that, will make a regular payment according to the agreement.

Take Help from Professionals

If you want to take advantage of deferred pay but not sure how to get it through, you can contact Oxford Credit Banque Limited. It is a non-banking institute that has been giving its quality service for many years. You can also visit oxfordbanque.com for further details!

Location: London, UK

Comments

Post a Comment

Popular posts from this blog

Things to Know About Counter Standby Letter of Credit

Image
A counter standby is a part of a standby letter of credit. It supports the local understanding and the receiver of the counter standby.  The beneficiary of the counter standby is the other bank accustomed to the local undertakings.  You can use counter standbys in trade finance, particularly in international sale transactions. Many trade finance companies use counter standbys, especially in international sale transactions. The foreign banks may issue a single standby letter of credit that ensures a small amount to the party for security.   To understand the counter standby, we will have to know the details on the standby letter of credit. The Standby Letter of Credit You can issue a standby letter of credit as collateral. Therefore, this primary payment method fulfills the requirement of the commercial letter of credit.  Do you want to liquefy your standby letter of credit? You can accomplish this only when the applicant forgets his responsibilities under the contract.  As an individua
Read more

Document against Acceptance (DA): Crucial Aspects to Follow!

Image
The Document against acceptance (DA) is helpful for both buyer and seller. Here, the buyer doesn’t have to make an immediate payment, as they get the opportunity of a credit period. He makes the payment depending on the maturity date of the accepted bill.  Under the Document against acceptance (DA) method, the seller delivers the goods first to the buyer. After the shipment, the seller will get all the significant documents including Invoices, Bills of Exchange, and more. So, let’s focus on the other factors of Document against acceptance (DA). The Benefits Received By the Buyers through Document against Acceptance (DA) Document against acceptance (DA) offers greater flexibility to the buyer with his cash flow and liquidity management.  The process makes him settle with the payment and goods.  When the times come to make a payment, he can sell the goods and secure the money from the debtors. The Benefits Received By the Seller through Document against Acceptance (DA) The seller receiv
Read more

Use Document against Payment (DP) In Business - Advisable or Not?

Image
The payment methods in business are Letter of credit (LC), Document against payment (D/P), open account (O/A), and factoring. With all these methods, most of the items get sold. However, there are multiple options applied in business when it comes to determining which payment method is suitable as a term of sale. Well, today’s center of the discussion is Document against payment (DP) . If you are interested in reading these payment methods, read the article till the end. Document Against Payment (DP) - What Is Its Necessity? What is a Document against payment (DP)? You ask. Well, it is a payment method. People who indulge in large-scale business purchase things using this method.   Most sellers know the terms open account and letter of credit transactions, but they are not with Document against payment (DP) transactions. Well, it is not a secret. It is a less complicated method than others.  Long story short? The Document against payment (DP) is, when the supplies get transported, the
Read more