Sometimes a bill payment is too big to pay at once, but your vendor won’t accept a partial payment. For such cases, Melio lets you pay on your terms in installments. Your vendor gets paid on time, in full, and you repay in a way that works best for you.
How does it work?
It’s very much like making any other payment on Melio.
The first time you schedule a payment in installments might take a few minutes longer because of the application process. Due to compliance requirements, only business owners can apply for Pay over time and make payments in installments. So, you’ll be asked to add the details of all the business owners (25% and up).
From the second time on, there’s no need to enter these details again.
TIP: Collect all the owners' details in advance
These are the details you will need to enter before scheduling your first payment:
- First name.
- Last name.
- Date of birth.
- Social security number (SSN) or Individual Taxpayer Identification Number (ITIN).
- Personal address.
This article will guide you through:
- First-time paying in installments.
- The email notifications you get.
- How installment payments appear in Pay.
Now, let’s make your first payment in installments:
1. Sign in to Melio.
2. Click Pay in the left sidebar.
3. Add a bill to pay or select one from your inbox.
4. When asked to choose a payment method, you may see an option to Pay over time. This means that the business met the first criteria and may be eligible for Pay over time with Melio.
To be fully eligible and make payments in installments, the business owner needs to apply.
5. Select Pay over time and then click Continue.
The application process starts now.
6. If you’re an owner of the business, click I’m an owner of this business. Then click Continue.
IMPORTANT NOTE: Only owners can apply for Pay over time and pay bills in installments because of compliance regulations.
7. Confirm your business details. Make changes if needed. Click Continue.
8. Enter the details of every person who owns more than 25% of the business. The owner who is applying to make the first payment is the OWNER/APPLICANT. Click + Add another owner to enter the details of every business owner.
9. Click Check my rate to continue.
Our financing partner powering Pay over time, Credit Key, will run a soft credit pull on the owner applicant’s account only, to approve the business for installments and make a final offer. This might take a few minutes.
IMPORTANT NOTE: What is a soft credit pull?
Credit Key will check the owner applicant's credit report as part of the background check before making an offer. The purpose of it is to decide how likely it is for them to get paid back by you. The most important thing to remember is that it doesn’t affect your credit score.
10. Select the number of installments you want. This is the final installment offer and includes the exact amounts you repay.
IMPORTANT NOTE: Understanding the final repayment terms.
The installment terms include the following:
- Number of installments- The number of repayments that will be made over time. Every repayment term is different. Read this overview of Pay over time with Melio.
- Amount/mo- The total amount that will be deducted from your account each month. This amount includes the fee based on the terms you selected. So there won't be additional costs.
- Total fee (%)- The percentage and the total fee amount in USD for the payment.
- Total amount- The total amount you’ll pay ultimately after all the repayments are paid. This amount includes the payment to your vendor and the fee.
11. When you select repayment terms:
a. You can choose when the payment will be sent to the vendor. Your first repayment automatically deducts 30 days after.
b. You’ll also see a pre-selected bank account.
Click Continue.
NOTE: Change the pre-selected fields.
Payment date- the pre-selected date for the payment is a suggestion to make sure it will get to the vendor on time. You can change it by clicking the calendar icon .
The first installment date will be 30 days after the payment is sent to your vendor. From the 2nd repayment on, it will be deducted 30 calendar days after the previous repayment. So, your repayments will be deducted on the same date every month until fully repaid.
Bank account- Paying with Pay over time is only available with a verified bank account.
The bank account that is already connected to your Melio account is automatically selected for the repayments.
If you have more than one bank account connected, click Edit and select one from the dropdown list.
12. (Optional) Leave a memo for your vendor. The default is the invoice number. Click Continue.
13. Review and confirm the bill payment using installments. This summary includes the following details of the repayment terms you selected:
a. Installments- The number of repayments for this payment.
b. First installment deducts- The date of the 1st repayment. To see the deduction date of the rest of the repayments click View installments.
14. If you agree to the terms and conditions outlined by Credit Key, check the box I have read and agree to the Credit Key Business Loan Agreement at the bottom of the summary.
15. Click Confirm and schedule payment to finish.
That’s it! You have successfully scheduled your first bill payment with Pay over time.
The email notifications you get from Melio
Bill payment scheduled notification
When you schedule to pay a bill with Pay over time, you get an email confirmation that includes the installment terms. Here’s what the email looks like:
How installment payments appear in Pay
Pay over time is possible thanks to Melio’s ability to split the payment process between what the vendor gets and what you pay.
To make it easier for you to monitor your cash flow, the payment and repayments are reflected separately in Pay.
There are 5 different stages until your payment and repayments are paid in full:
Stage 1: When you schedule the bill payment with Pay over time.
Right after you’re scheduling the bill payment, it will appear under the Scheduled tab. This is the payment to the vendor and includes the amount they will get from you.
Under Future installment deductions on the right, click Reload to see the details of the repayments.
Stage 2: When the payment to the vendor is processed and the 1st repayment is scheduled.
Paid tab- Your payment moves to the Paid tab with the status Paid on. In the progress bar, you can see the status SENT and the date.
On the right, under PAID BY, you can see the details of the repayments.
Click View details to see information about your next repayment.
Scheduled tab- In the Scheduled tab, you see your first installment repayment under Installments + number of the repayment.
On the right, under PAY BY, you can see the details of the repayments.
Click View installments to see information about the payment to the vendor.
Stage 3: When the vendor gets paid and the 1st repayment is scheduled.
Paid tab- Your payment stayed in the Paid tab but added the label COMPLETE because the vendor got paid in full. In the progress bar, the status changed to DEPOSITED.
On the right, under PAID BY, you can see the details of the repayments.
Click View details to see information about your next repayment.
Scheduled tab- 30 days after the payment was sent to the vendor, your first installment is deducted. In the Scheduled tab, you see your next installment repayment under Installments + number of the repayment.
On the right, under PAY BY, you can see the details of the repayments.
Click View installments to see information about the payment to the vendor.
Stage 4: When the 1st repayment is deducted.
Paid tab- In the payment details, you can see what repayments were deducted.
Scheduled tab- In the repayment details, you can see what repayments were deducted and when the next one is.
Stage 5: When the installments are paid in full.
Paid tab- In the payment details, you can see that all repayments were paid in full.