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What is a Payment Due Date?

By Felicia Dye
Updated Feb 01, 2024
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A payment due date is the moment when action should be taken to satisfy debt. It is usually expressed by month, day, and year. In some cases, there may be a specific time by which the payment must be made. Depending on the agreement between the creditor and debtor, there may be a single date upon which the entire debt will be satisfied, or there may be recurring dates that allow for gradual satisfaction of the owed amount.

When a person is indebted, it is common for there to be terms dictating how the debt will be settled. A payment due date determines when the creditor will be repaid. Creditors sometimes distribute statements or payment coupons to individuals who owe them. The payment due date will generally be displayed as a particular day of a particular month followed by the current year. If the payment is deferred or it is December, the date may be followed by the upcoming year.

Whether or not time is a part of the payment due date can vary. Some creditors may require that individuals pay by a certain time on the given day. In these cases, individuals are often given until the end of the creditor's business day. In some instances, a person is considered to have made a payment on time if she did so at any point on the specified date, even if a business is closed. Some creditors even consider their clients to be compliant if they mail payments and the postmark displays the due date but the payments are not actually received until days later.

There are many instances when debts are settled through recurring payments. When this happens, each payment due date is used to satisfy a portion of the debt. It is common for the recurring payment due date to be on the same day every month. This does not always happen, however.

There are several reasons why creditors impose payment due dates. To begin with, a due date provides debtors with a time frame for taking action. Otherwise, there is a risk that individuals may indefinitely delay repaying what they owe, or they may make payments too sporadically. Another reason that creditors assign payment due dates is because they help them to meet their financial obligations. Most creditors need a reliable and consistent stream of incoming revenue.

Payment due dates are so essential that many creditors have policies that encourage people to adhere to them. Those policies generally allow creditors to charge penalties for late payments. Some creditors may also increase interest rates and refuse to extend further credit.

WiseGeek is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.

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