A payment plan is an agreement between a buyer and a seller that outlines how a purchase will be paid over time. Instead of paying the full amount upfront, the buyer makes smaller, scheduled payments until the total cost is settled. This arrangement can make expensive items more affordable for consumers. Payment plans are commonly used for large purchases, such as cars, furniture, or medical bills. They can vary in terms of duration, interest rates, and payment frequency. Understanding the terms of a payment plan is essential to avoid unexpected fees or financial strain.