How to calculate interest on installments on credit?

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Calculating interest on installment sales is a common practice in many businesses and can be a source of additional income. However, it is very important that merchants know how to calculate installment interest correctly and fairly.

There are different ways to calculate interest on sales cash app database installments, and choosing the most appropriate model will depend on the company's policies and each payment method.

Some factors that should be taken into consideration include the interest rate applied, the number of installments and the total sale value.

Furthermore, it is essential that merchants inform customers about interest charges in a clear and transparent manner, avoiding any misunderstandings.

Want to know more about this and how to calculate interest on credit? Keep reading!

HOW TO CALCULATE INSTALLMENT INTEREST?
There are several chain stores that charge interest on installments. However, many smaller retailers are still afraid to charge this fee because their competitors don't.

However, it is essential to understand that each store has its own financial reality!

Remember: just because a competitor across the street sells in up to 10 installments , it doesn't mean you have to sell as well. The same goes for installment interest.

With this in mind, we always try to clarify to our clients that much of the resistance to this type of action ends up occurring internally.

Now, if you already have the initiative to charge interest when paying in installments, there are some strategies for doing so.

We also like the interest-free strategy, but with a fixed installment plan. For example: Up to 3 interest-free installments, 4 to 6 monthly installments with interest.

But then, what interest rate should we charge?
It depends on your segment! If it's footwear, clothing and optics, you might think of something like 1.99% per month.

Another point is not to charge directly on the product. For example: R$100 on credit becomes R$110 (this is the old model of 10% discount on cash payment that we do not agree with). Here at Meu Crediário we believe and understand that these are two different strategies.

The percentage you give as a discount (which you shouldn't give) serves as a guideline for how much loss you can bear due to default, but always thinking about remunerating the capital.

Have you ever thought about it from that point of view?