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    1 Reply Latest reply on Mar 21, 2009 1:18 PM by Analysight

    how much interest to charge for payment plan?

    pdmiller Adventurer

      I offer web design services and I allow my clients to pay either 50% down and the remaining 50% on completion or they can spread out the payments over time. I currently have not been charging interest for spreading the payments out over time. I would like to start implementing interest for the payment plan in order to try and persuade my clients to pay the 50% up front.

      What interest rate would be acceptable? 5%, 10%, 15%, 20%? What do other industries usually charge for interest in a spread out payment option plan?


      Thank you,


      Patty Miller, owner


      Affordable Web Design and Graphic Solutions

        • Re: how much interest to charge for payment plan?
          Analysight Newbie

          The amount of interest you charge should be based on the amount of risk you are taking on to finance your clients. Look through your customer files and determine how many late payers and non-payers you've had. If you have a relatively high number of non-payers and/or late payers, charge a higher interest rate. Another way of charging interest would be to have two rates: a lower one for your preferred customers (repeat customers who are consistently on time), and a higher one for both new customers and repeat customers who have a history of paying late.

          You'll need to experiment with different interest rates to find the one that works best for you and your clients.