Car Payment Calculator

In the modern world, cars are seen as a need rather than a luxury. It is true that they have the option to take public transport, but this is not always a viable choice. People travel to different places for a variety reasons all classes, a dinner date, sports activities. Personal schedules do not always coincide with that of public transport. There is also a need to consider safety while taking public transport. People feel safer in their own vehicle. All of these add up to people choosing to purchase a car. To ensure they do not exceed their budget, they can make use of a car payment calculator.

These calculators are user-friendly and can be found online. When using the calculator, you can input information regarding the sale. It takes information like sales price, interest rate, down payment and amount of trade in. Based on all the information, the calculator then gives out the expected monthly payment amount. Check to make sure that the calculator you used also took insurance cost into account. Whether or not it does, insurance cost should be kept in mind and not forgotten. In addition, think about the other expenses you will incur as a car owner. There are other expenses such as maintenance, gasoline and parking or storage fees.

People who own a car are always at risk for accidents. Being involved in an accident can also mean additional cost. Even if you have insurance which will cover most of the expenses, remember that there are insurance deductibles. Also expect your premium rate to shoot up. People must determine if they will be able to finance the costs of putting the car back in working condition. Other costs also include the cost of registration and emissions testing. While the cost may be similar for all cars, these still make up part of the price.

A common mistake people make is buying the car based solely on the monthly payment. The salesman will do anything he can to get you to buy. He will quote a monthly payment that is low and easily within budget. Do not forget to ask for one thing ? the actual price of the car. While the amount to be paid monthly sounds low and seems within budget, it is still important to know the actual cost of the car. This is the only way you will know for sure if the car you are buying falls within your budget. Knowing the full price of the car helps people get the best deal. It puts people in a better position to bargain for the best price. The full price of the car is an important piece of information to have before making the commitment to buy a car.

A car payment calculator is helpful. However, it is still just a tool. It would not be a good idea to rely on the calculator alone when making such an important purchase. Do your homework and make sure you have all the information you need before putting your signature on any document.

Ecommerce Payment Processing Options

The world of online commerce is just getting better and one area that has particularly improved is that of payment options; we now have more payment options that ever before in the history of e-commerce.

As an ecommerce entrepreneur your stakes are just getting better; and to be truly successful in this promising field you must offer your customers flexibility in terms of how they pay for their purchases online and that's in your website of course.

A study recently published by Cybersource Corp. shows that online stores providing three additional payment options besides credit card reported a higher sales conversion rates as opposed to those that offer a single online payment option besides credit cards.

This simply means that the more payment options you offer, the higher your sales and the more money you make. 

Below are a number of online payment options you can offer in your website.

Credit card processing

This is of course the staple of online payment. Credit cards are still a popular way of paying for goods and services online. To be able to use this payment option on your ecommerce website to accept Amex, MasterCard & Discover, you'll have to get an online merchant account.

You can register for an online merchant account with your local bank. Be informed that to be able to process payment from all major credit cards in your site, you'll have to register online merchant accounts with two separate banks. Reason: majority of banks only deal with some of the credit cards involved.

Alternatively, you can register an online merchant account through a third party merchant account provider like Moneris, Beanstream, InternetSecure or PSiGate.

The benefits of registering for an online merchant account with third party merchant account providers is that you'll not be required to make any security deposits (as require by banks), the set-up is fast and they're flexible enough to be bundled with ecommerce service packages which can include internet gateway required for credit card processing "this is the equivalent of POS terminal" plus a shopping cart.

The only disadvantage is cost. Their discount fees are particularly high than if you set-up your online merchant account via your local bank.

Wherever you get your Internet merchant account, you will have to also purchase an Internet gateway service. The gateway verifies information, transfers requests and authorizes credit cards in real time. All four of the companies I've mentioned above offer these credit card processing services as well, but there are many others that do too - including PayPal and Moneybookers.

PayPal

PayPal is now also an all-in-one online payment solution. Their Website Payments Standard program lets you accept Visa, MasterCard, Discover, and American Express credit card payments as well as bank transfers and offer PayPal as well - with no monthly fees, setup or cancellation fees. PayPal charges you a fee of 1.9 to 2.9 percent of transaction plus 30 cents per order, depending on your company's sales volume.

PayPal also offers an upgraded version of Website Payments Standard called Website Payments Pro, where customers check out right on your site rather than on PayPal's (currently available only in the U.S.)

Moneybookers

Like PayPal, Moneybookers is also an all-in-one online payment solutions provider. With a little additional of API code provided by them to your website, you can instantly process credit card payments from all the major cards (Visa, MasterCard, Discover, and American Express) straight from your website. Moneybookers account can also be linked directly to your local bank account via the SWIFT network.

Pay Taxes Online - Benefits Of Online Tax Payment

Many people are there who pays money to the government year after year for taxes levied on them. Most of such people prefer to file their taxes online over the internet due to its convenience, user friendly and instant feedback along with many other features. You can even pay for your taxes along with filing your taxes online by use of available options.

Gone are the days when people did not liked the idea to change the way they used to file their taxes. Nowadays, most of them prefer to file their taxes online. Filing is not only task that is accomplished by these individually online as they also pay for their taxes online only.

Different people have several reasons for not paying their taxes at end of the year. Majority of such people are those who wish to pay taxes to the government but did not contributed enough money on monthly basis through the year. Every situation is different but one thing is common that all of us people have to pay their taxes at the tax time if they have not paid it previously to the government.

If we talk of government then you need not to think bout the reason for which you owe money or about the sum of money you owe. What matters the most is that you pay their bills. Government provides you with a lot of options so that you can pay your bills easily. Even guidance about the installments in which you can pay taxes online is given by the government.

Many people who owe money to the government prefers to use online payment for their taxes as the money is instantly transferred without any delay. Moreover, you do not have to wait for a representative to whom you will have to give all your information.  It is a very simple and short process which might consume only couple of minutes and you would end up paying your taxes online.

Most of the people do not like to wait for the feedback from IRS regarding their tax payment as it is a waste of time. People pay their taxes online which is less stressful and easier mode of payment. You would not have to be hold for so long as all the work can be done directly from your home by use of internet. You can utilize this spare time to relax or earn more money.

You should check the online payment methods to pay your tax online if you owe any amount to the government related to taxes. What are you waiting forall Just hop online on the IRS website to pay your taxes online along with filing the details of your income tax.

How to Calculate Your House Payment

The basic calculation for a house payment is to multiply the annual interest rate times the loan times the number of months of the mortgage. For example, 5 percent -- interest rate -- times $250,000 -- mortgage amount-- times 360 -- 30 year mortgage -- equals $450,000. Divide that by 360 for the monthly payment of principle and interest of $1,250. This gives you a pretty close approximation. The bank will calculate the interest based on each month. In other words the 5 percent annual interest rate is.41 percent on a monthly basis. Divide the taxes for the year and the private mortgage insurance -- PMI by 12 and add to the monthly payment.

Amount of the Loan

The larger the loan the larger the payment will be. With all other variables held constant a $350,000 mortgage results in a monthly payment of $2,000. It increases to $2,500 for a $450,000 loan amount and decreases to $1,500 for $250,000 loan.

Length of the Loan

Thirty, 20 and 15 year mortgages are available. If you want to substantially decrease what you'll pay for the interest of the loan, a 15 year mortgage does that very nicely. For example a $250,000 mortgage for a 30 year loan results in total payments of $550,000 and monthly payments of $1,500. A 15 year loan results in total payments of $380,000 or savings of $170,000. The monthly payment for just principle and interest on the 15 year loan is $2,000.

Interest Rate

The interest rate has the greatest impact on the payment total after the amount of the mortgage. A difference of as little as one percent can result in hundreds of dollars per month. Variable, or adjustable rate, mortgages are based on the prime lending rate and as the name suggests, varies from time period to time period. In the early years of making mortgage payments, most of the payment goes to pay the interest. As the equity slowly builds and the total of the amount owed on the home decreases, the amount that is applied toward the principle of the loan accelerates. The $250,000 mortgage for 30 years at 6 percent interest results in a monthly payment of $1,800 at 4 percent the payment is $1,550.

Where You Live 

Taxes are property taxes and are dependent on where you live as well as the assessed value of the house. Market value differs than the assessed tax value. Call the county assessor to get the tax rates for the neighborhood you're considering.

Insurance

Insurance included in the mortgage payment includes private mortgage insurance if you've made less than a 20 percent down payment. It varies depending upon the size of the loan. Once the loan drops to less than 80 percent of the original mortgage amount the PMI drops off. If you don't have your own homeowner's insurance on the property the mortgage company will obtain a policy and include that premium in the mortgage payment. The premium cost depends on the value of the building. The land isn't included. Even if the house is destroyed the land still has value.

Payment Periods 

Most mortgages are made once a month. However, if you pay half the mortgage payment every two weeks, it results in an extra payment being made in a year's time. There are 12 months in a year and 52 weeks. 52 divided by 2 equals 26 payments or 13 full payments.

How to Accept a Credit Card Payment Online

Not accepting credit card payments online can break your business. This is a proven fact. Nowadays, the majority of transactions online are made through credit cards. This is why accepting credit card payments are one way of guaranteeing your online business success. Although people will still purchase what you are offering even if you do not accept credit card payments, closing a sale with credit card acceptance is much more easy. Now that you know the importance of credit card payments online, you may want to understand the intricacies of these kinds of payment.

How does the process workall

First and foremost, you need to have a merchant account. This is not any ordinary merchant account. For online businesses, it is called an Internet merchant account. For those who do not have one, you can still accept credit card payments through special banking accounts that entitle you to process payments from customers. Credit card payment is basically a process of transferring funds from the customers' cards to your bank account.

When customers decide to buy from your site, they need to enter credit card details into a secure order form that is on a secure server. What follows is a series of validation and verification of the card information for fraud avoidance purposes. The information will then be forwarded to a payment gateway. An example is MasterCard or Visa. This gateway will be the one transferring card details to the processor for you to get paid.

The transaction will be confirmed or declined based upon the card status. Important things like if the card was stolen, credit limit and available funds are considered before the transaction is finalised. The results will be forwarded to you. After that, the customer will be led to the page where they will be assisted in downloading the product or service they have paid for. Transaction is completed at this stage. But before you begin accepting credit card payments online, there are a few things you have to consider first. These are important things that you should know and understand beforehand.

What are these?

1. Merchant account application.

This can be done through companies that are offering payment-processing services. They are the merchant services providers. You can get hold of them through your local bank. Take note that banks and financial institutions of good standing and reputation are very selective of the merchant account they give out. You will not be able to open your own if you are just a beginner in the online business or if your business is small.

The process of setting up an account is not that easy also. It can get expensive and too complicated also. For this reason, there are companies offering service packages that you can avail for easy processing. For small businesses, you do not really need to have a merchant account to be able to accept credit card payments online. You can opt to get the services of third party processors to do the job for you. Even if the percentages are high, this is the best option for those who are just starting.

2. The issue of security.

Make sure that your order form is secure. Some people are wary of giving out credit card details because they think these things are not reliable. Erase their doubts by placing order forms on a secure server. In a secure server, credit card details are sent in encrypted texts. A SSS encryption should be set up to avoid unauthorised decoding of the information given. When the customers are aware of your secured server, they will be more than willing to use their credit cards and give details about them.

3. Refund capabilities.

Apparently, you cannot please everyone. There will be customers who will not be too happy about what they bought and will probably want a refund from you. No matter how good your products are, expect to receive some refund requests sooner or later.

Set up a refund plan. Decide on how you will be able to return the money to unsatisfied customers. You have three choices; you can do it yourself, an employee can do it for you or have a company go through the hassle. To start accepting credit card payments online, understand these basic things and you are on your way to closing a sale.

Advantages of Online Payments

As technology continues to advance, many people are finding that many new and often bewildering options are becoming available for everyday use. One of these new options that people may not be aware of is the online payment option. In the past, one had to go to a bank and deposit their income into an account. Next, one would take the bills that came in each month and send in a check drawn on their account to pay for the services or products that had been used. After you mailed in the payment, you could expect to wait a few days to a week for the company to get the payment and give you credit for the payment.

If one was a few days late in taking care of any part of the procedure, the payment could be late and one could be charged a late penalty or fee. Today, this entire process has been streamlined with the online payment. You still deposit funds into an account, although this can be done electronically and not in person. Next, you can log on to your banking institution to set up an online payment for any merchant or vendor you wish to. Once this has been accomplished, you simply input how much to pay and input when you want the payment to be processed. That is the entire process. It only takes a few minutes and you no longer have to worry about being late. Because of the ease of the program, you can even wait longer to make a payment and this can help you to hold onto your money a little longer.

Many accounts pay interest on the money for as long as it sits in the account. You can earn this interest, save time and money; ensure accuracy of your payment, and so much more when you use the online payment option. The time has come to move into the next generation of financial services. Check out what an online payment option can do for you.

What Is a Payment Gateway?

A payment gateway is the equivalent of a point of sale terminal found in retail stores. It can authorize payments for a myriad of businesses, including online stores and businesses and brick and mortar stores. It is a service that acts as an intermediary between the shopping cart, the merchant, and the financial institutions. This will include the buyer's credit card issuer and the seller's acquiring bank. The transfer of information takes place over a secure connection (SSL) and shopping carts are configured to send information in a certain format for a particular gateway.

How Does A Gateway Functionall

The payment gateway will transfer information from the payment portal, which can be a website, a mobile phone, or interactive voice response service, to the bank or Front End Processor. Here is an overview of the process:

1. After entering his credit card number information, the customer will click the "Place Order" or similar button on a website.

2. The information will be securely transported from the website to the merchant's webserver via SSL encryption.

3. The information is then sent securely to the payment gateway.

4. The payment gateway forwards the information to the payment processor that is used by the merchant's acquiring bank (the bank where he has a merchant account).

5. The payment processor will send the information to the appropriate card company (Visa, Master Card, etc) and at that point will be routed again to the credit card's issuing bank. The processor acts as the issuing bank for Discover Card and American Express.

6. A response is sent back to the payment gateway as to whether the transaction was declined or accepted.

7. The payment gateway forwards the response to the website. This whole process takes only 2 to 3 seconds.

8. Once all the funds are available, money may be transferred from the merchant account to a business account.

Other Services

Many of the gateway service providers will offer tools that can detect fraud which includes verifying the delivery address and geographic location of the buyer. They may also calculate the taxes before the request for authorization is sent. Most payment gateways offer an information screen for inputting data.

If you sell products or services online, this is one of the things you need to accept credit card payments. Most service providers include the capability of accepting echecks so the customer has the option of using their checking account.

Dental Implants, Payment, Insurance

Dental implants were introduced to the dental community some ten years ago. Since that time, dental implants have touched the lives of numerous people all across the country. With an unparalleled ability to mimic teeth in regard to functionality, dental implants have enabled many to regain their ability to eat with ease and interact with others in confidence. However impressive dental implants may be, they do come at quite a high cost. Unfortunately, some seem to think that this cost is unavoidable and needs to be more or less tolerated. This is not the case, as prospective implant patients have a plethora of different routes which they can take to offset the cost of dental implants. This article will look into some of those routes.

A good number of us have dental coverage and have seen it in action at the dentist's office. Despite what some may say, some dental insurance plans do cover dental implants. Popular belief depicts the dental implant procedure to be wholly elective. It turns out that this is not the case. Let's take the example of a person who can no longer wear dentures. Where is he or she to turn to regain their lost abilityall

Given the right circumstances, they can turn to dental implants. Some insurance companies realize that people don't get implants on a whim, and thus provide coverage for the procedure. The best way to find out if dental implants are covered in your dental insurance policy is to contact your insurance company. If they do provide coverage for such a procedure, ask about any restrictions they have for obtaining such coverage. Even if the insurance company refuses to pay for the entire procedure, see if they will agree to cover a portion of it. Any effort you can make in saving some money is worthwhile.

If the insurance route doesn't prove successful, there's still hope. Many dentists offer financing options for patients who can't pay for dental implants out of pocket. Considering that implants can cost several thousand per tooth, this isn't very surprising. These financing plans allow you to repay the dentist on a more convenient basis. Financing terms are not always similar from practice to practice, thus it's best to consult a local dentist for more information.

If you know you won't be able to make your monthly financing payments, it's a good idea to wait and save up some money. Even if your circumstances aren't the best, it's not worth putting yourself in financial turmoil for dental implants. Those that have family members that would be willing to contribute towards the implants may have some luck. If you can manage to afford the procedure outright with the help of family members, or will be able to pay the monthly charges with the added help, the procedure might be worth having.

In the overall scope of things, dental implants can be extremely affordable given a prospective patient does his or her homework. Dentists know the average person can't afford to spend several thousand dollars on revamping their teeth. Thus, you shouldn't feel trapped in a corner when it comes to trying to cover your implant procedure. The aforementioned strategies use be utilized in your quest to cover your implants, as should some additional ones. Take your time, exercise your judgment, and you will be fine in covering your implants.

The Mortgage Payment

Most people are usually not ready when they apply for a mortgage loan. Of course they know that they require a down payment to buy a house but there are other costs as well as down payments. In this article, I will be talking about the first payments you will make to get a mortgage loan, as well as the monthly installment you make and what they are composed of.

The first payment you will make when making an offer to buy a house is "earnest money". This is to let the lender know that you are serious about your offer and willing to buy the house. This money is put into an escrow account until your offer has been accepted. If it has been accepted, it will then be put towards your down payment and closing costs. If not, the money will be returned. There is no fixed amount to deposit for earnest money to buy a house. Some states have a minimum requirement, but they usually fall between 1 to 3 percent of your offer. If you are making an offer for a house that is likely to sell quickly, a larger earnest money may help get your offer accepted.

The next payment is the down payment. This is a percentage of the agreed price that you pay to reduce the amount of money you have to borrow. You can put as much money down as you want. The traditional amount is 20 percent of the purchasing price but it is possible to find mortgage loans that require as little as 3 to 5 percent. Any down payment lower than 20 percent would require you to purchase a Private Mortgage Insurance which is added to your monthly installment. This is to protect the lender if you default on the mortgage. PMI can be cancelled as soon as you have built equity equal to 20 percent of the value of the house. The more money you put down, though, the less you have to finance and the lower your monthly installment will be.

The third payment you will make is for closing costs which covers all the paper work needed to buy the house. Closing costs are usually between 3 to 4 percent of the purchasing price of the house.

The monthly mortgage installment you will make is composed of the following costs, appropriately known by the acronym PITI.

• Principal - The total amount of money you are borrowing from the lender (after your down payment). In the early years of a fixed rate mortgage, you pay more of interest. In the later years you pay more of the principal.

• Interest - The money the lender charges you for the loan. It is a percentage of the total amount you are borrowing. Principal and interest comprise the bulk of your monthly installment in a process called amortization, which reduces your debt over a fixed period of time. With amortization, your monthly payments are largely interest during the early years and principal later. In addition to your principal and interest, your mortgage payment could include money that is deposited in an escrow account to pay certain taxes and insurance.

• Taxes - Money to pay your property taxes is often out into an escrow account, a third party entity that holds accumulated property taxes until they are due.

• Insurance - Most mortgages require the purchase of hazard insurance to protect against losses from fire, storms, theft, floods and other potential catastrophes. If you own less than 20 percent of equity in your home, you may also have to buy Private Mortgage Insurance.

Equity is the value of your home minus your remaining principal balance.

In my next article, I will be talking about fixed rate mortgages.

How to Calculate Monthly Mortgage Payments

There are multiple tools available online that will assist you with the task of calculating what your monthly mortgage payment could be; these tools take into account the principal amount (actual price of the home), your down payment amount, your interest rate, PMI (private mortgage insurance), and the amount needed in your escrow account.

It is important, as an informed homebuyer, to know what factors are taken into account when calculating your monthly mortgage payments.

Principal Amount

The principal amount of your mortgage is the actual price of your home. In general, the average term of a mortgage is 30 years. The price of the home is divided by thirty and again by twelve, assuming that you will be making one payment each month. As a side note; if you are able to include a little bit extra each month towards your principle balance, you will decrease the overall amount you pay over the life of the loan because you are lowering the amount that interest is added to.

Closing Costs

When you close on a mortgage loan there are, in most cases, several closing costs, appraisal fees, and other assorted fees that need to be taken into account. Theses costs can be rolled into your mortgage so that you do not need to be concerned about paying them upfront at the time of closing.

Down Payment

Your down payment can not only go a long way to reassure the lender that you have a vested interest in your home, but can also be used to reduce the overall financed principal amount.

Interest Rate

The interest rate on your mortgage home loan [http://www.mortgage-bankloan.com/] is the part that will influence your monthly payment the most. The largest portion of your monthly payment goes towards paying interest on the loan. This is why it is vital to ensure you receive the best interest rate possible; even a few interest rate points can create a variation in your payment of several hundred dollars. If you have an adjustable rate mortgage then your monthly payment can vary every month.

PMI

Private Mortgage Insurance (PMI) is required by the majority of mortgage lenders when there are credit concerns and a low down payment offered by the homebuyer. This insurance protects the financing institution in the event that you default on your mortgage.

Escrow

Your mortgage escrow account is a savings account that will pay out for things like your property taxes and homeowners insurance. It is the mortgage company's method of protecting their interests in the property by ensuring that you have the means to pay for property taxes and homeowners insurance.

Before you close on the home you will, most often, be required to take out a homeowner's insurance policy. You should be aware that property taxes and homeowners insurance are variable expenses; if the property increases in value then your annual property taxes will increase accordingly. Homeowners insurance rates can change annually; for the best rates on your insurance it would be wise to consult your insurance agent at least once a year to see if you are able to get a better rate. Most often, if you insure your vehicles with the same insurance agency, you will be able to get a multiple policy discount.

Be sure that you are well aware of all of the factors that contribute towards your monthly mortgage payments.

Benefits of Electronic Payment Services

With the growing convenience of the Internet, electronic payment services have become an increasingly popular way to pay bills and manage accounts from home. Consumers are eliminating the hassle that often comes with filing paperwork and mailing checks, and instead are keeping their records online through secure networks. Businesses that offer electronic payment services not only improve customer service with the convenience of online account management, but also cut costs, reduce late payments, and provide a greener business solution to customers.

Accept Online Payments: 

Electronic payment services allow businesses to send invoices electronically and accept payments online. This is extremely helpful for businesses that send out recurring monthly invoices by streamlining their record keeping system and creating a more efficient billing cycle. By accepting online payments and processing credit cards online, your business can process invoices quicker and increase cash flow.

Cut Costs: 

As simple as it may seem, stuffing envelopes and mailing out paper invoices takes time and money. Eliminating paper billing altogether reduces paper and mailing costs. With electronic merchant processing services, employees can spend more time on customer service and building revenue and less time dealing with paperwork.

Reduce Late Payments: 

Electronic payment services include reminders and notifications for customers to pay their bill. You can set up weekly or monthly reminders to your customers and clients reminding them when a bill is due, reducing the amount of late payments you receive. Online payments also allow for quicker transactions, eliminating the waiting period required for a mailed check to arrive.

Improve Customer Service: 

Your customers will appreciate the convenience of electronic payment solutions, giving them the ability to check and manage their account online. With ongoing technological advancements making the Internet even more accessible, more of your clients and customers are spending time online, and they expect to be able to accomplish their tasks. Meeting and exceeding their expectations can give your company the edge over your competition, and keep customers happy. With a more streamlined process, you can provide your customers with efficient service and support.

Go Green: 

Many people are becoming more concerned with environmental issues, and electronic payment services allow your business to provide a greener business solution. By sending and receiving bills online, customers and businesses alike are reducing the amount of paper tossed in the trash and doing their part to help save the environment.

Electronic payment services can help your business streamline the payment process. Your customers will enjoy easier access to reporting, and your company will save money on billing procedures, without sacrificing quality or reliability.

Online Payment Processing - Processing Your Payments Online

As a business owner, there are many things that you need to concern yourself with, including your bottom line. One way that you can impact your bottom line is by lowering your costs, and one way that you can lower your costs is to consider how much it costs to collect payments from your customers. Every payment processing solution costs you money, typically a per-use fee that is rolled into the payment from the customer. Technically it is the customer that pays this fee, but unless you are tacking it on extra, it is coming out of your bottom line. One way to reduce costs associated with collecting payments is to utilize a cost effective online payment processing system.

Online payment processing is beneficial for a business for several different reasons. First and foremost, it can greatly simplify the amount of effort involved in collecting payments from clients and customers by greatly automating the process. When you automate the process, such as with ACH or Automated Clearing House payments, the money is going to be debited automatically from the customers and credited to you, meaning that there is a lot less stress involved since you do not have to invoice customers and wait for them to make their payments.

Another great benefit of online payment processing is the cost savings. By handling your payments online in an automated manner, you can cut down on the costs by quite a bit. Rather than paying an average of more than a dollar for each eCheck payment that you need to clear, you may only end up paying pennies for automated clearing house or ACH payments. The right payment gateway can make it possible for you to accept payments automatically through an Internet connection, and this can save you a lot of money as well as time and effort.

When you are running a business and you are concerned about ease of use, price and convenience, then you should definitely consider all of the merits associated with online payment processing through ACH or automated clearing house systems. This type of payment processing is cheap, easy to use and automated, meaning you can focus your attention on more important matters while the payments simply roll in, which is how things should be when you think about it. This is the right type of payment processing for you to employ for your business to be successful.

How to Calculate Payments on a Loan

A lot of the time, we are given a couple variables and we want to calculate the payments on a loan. For example, you are trying to finance a $10,000 car at a 12% interest rate for 5 years. All you want to find out is how much your monthly payment is going to be and whether or not you can afford that payment. Just a heads up - you will need a calculator to figure out these payments. Since you are probably on a computer right now, you can use the calculator on your computer, or you can use excel.

Lets use the example above and try to calculate out your monthly payment. First, let's set some terms. PV (Present Value) of the loan is going to be $10,000. Your interest rate per year is going to be .12. However, since we are trying to calculate out MONTHLY payments, we are going to want to turn this 12% per year into a monthly rate. This is as simple as dividing .12 by 12 which gives you .01 or 1%. Finally, we are going to want to define our number of payments, n. We know that it will be 5 years, but we need to convert that into months. Simple as multiplying 5 by 12 which gives you 60 months.

Ok, so here are our variables:

Total number of payments: n=60

Interest: i=0.01

Present Value: pv=10000

The easiest way to calculate payments is to use a spreadsheet on your computer like excel. Open up the program, select a cell and type in the following exactly (without the quotes): "=PMT(0.01,60,10000)". Hit enter. This will automatically calculate out your monthly payment of "-$222.44". This is what your monthly payment on your car loan should be, given those exact variables. I am sure that the loan you are trying to calculate payments on has different variables, so here is the equation using variables instead of values: "=PMT(i,n,pv)". To calculate payments on your loan, just replace the i with interest, n with number of payments and pv with the total loan amount.

Using excel to figure this out is by far the easiest way. Just plug your variables in and hit enter and you are finished. If you are deathly afraid of excel, you can use the old-fashioned formula. Take a look at it and maybe you might want to give excel a shot first:

Monthly Payment = (pv) * (i/(1-(1+i)^(-n)))

Ok, let's solve this using our example:

Monthly Payment = (10000) * (.01/(1-(1.01)^(-60)))

Monthly Payment = (10000) * (.01/(1-0.55045))

Monthly Payment = (10000) * (.01/.44955)

Monthly Payment = (10000) * (0.022244)

Monthly Payment = $222.44

So we get the same answer of your monthly payment being $222.44. Piece of cake!

What do we learn from thisall You are buying a car for $10k and you only have to make monthly payments of $222.44 for five years to pay the thing off. Doesn't sound that unreasonable? Well if we add up all the monthly payments, we find that you ended up paying a total of $13,346 for a $10,000 car. And what is your car worth now? $3,000? So by the time you pay the car off, you are out a total of over ten grand!

What would have happened if the financing option had not been available to you? You might have bought something a little more economical, say a car worth $2500. Even if your car is now worth $500 now, you are still only out two grand instead of being out over ten grand!

Keep this in mind next time you calculate payments on your loan!

What is a Payment System?

What is a payment systemall I am reminded of lengthy debates around the office on just this question - and the heated and, at times, passionate discussion that ensued. My antagonist, who is also my partner, took one view and I took the other. The thrust and parry of the dialogue ebbed and flowed ... long into the night over innumerable cups of coffee.

The Bank for International Settlements (BIS) definition of a payment system states; "A payment system consists of a set of instruments, banking procedures and, typically, interbank funds transfer systems that ensure the circulation of money". (From "A glossary of terms used in payments and settlement systems", Committee on Payment & Settlement Systems. BIS, Basel, Switzerland. March 2003 (Revised Edition)).

Armed with this definition we can examine the components that make up what we so glibly refer to as a "payment system". This examination will help us see what a payment system really is.

The BIS definition focuses on "... instruments, banking procedures ... interbank funds transfer systems". Let us examine each in a little more detail.

o Instruments - a mere half century ago this was easy to define. Payment instruments were basically cash and cheques. Today however there is a vast range of payment instruments. Apart from the cheque and cash we now have giro-payments, electronic transfers, internet payments, debit orders, standing orders, credit cards, debit cards, electronic "cash" and so on. And the nature is each is vastly different from the other.

o Banking procedures - these cover a huge area. Anything that is not an instrument or that does not relate to how that instrument is moved, must, by definition, be related to a banking procedure. Here there are internal bank procedures (such as how a branch initiates payments), payments systems rules, the agreements (such as those between banks, between banks and their customers, between banks and the clearinghouse), national and international payment laws and payment regulations. We must also not forget the actual operational procedures, either manual or technology driven within individual banks that are used to initiate, verify and process the payment. All of these procedures are simply to get the payment ready for the next step, to move it to a transfer system.

o Interbank transfer systems - this covers local and national clearinghouses (for physical instruments such as paper), ACHs (automated clearinghouses for the electronic ones), message carriers (such as S.W.I.F.T. - Society for Worldwide Interbank Financial Transactions), switches for ATM transactions, the national and international credit card networks and so on. Missing from the BIS definition is the intrabank systems that give effect to payment instrument transfers within the same bank. These are transfer systems too.

The key word in the definition is "set" - for all these components have to be combined to make up a complete unit which achieves the desired outcome - just like a tea set with its cups, saucers, tea-pot, strainer (or perhaps a tea-bag holder), milk jug and sugar bowl are just the thing for carrying out correct ritual for brewing and serving tea.

Sure, one can have tea without all this but it's not really the same.

The analogy, while useful as a description ends here - in a payment system the missing components give rise to a serious problem - Risk.

Risk takes on many forms; credit risk, liquidity risk, legal risk, operational risk, settlement risk, systemic risk and put the whole fabric of the payment system in danger.

Despite this we often associate the word "system" with only the technology; the bits and bites, the hardware and the software. We tend to forget that there is a lot more that goes into making up a payment system.

So the next time that you write out a check or take that credit card from your wallet, give a thought to the process that you are initiating in a complex structure that we take so for granted - the payment system.