All You Need To Know About BNPL
What is BNPL?
You can make a purchase using theBuy Now Pay Later (BNPL)payment option without having to use your own money. Typically, you sign up with a business that offers this service, and that business collects payment when you make a purchase.
However, after the lender makes a payment on your behalf, you must make the required repayments within a predetermined time frame. In contrast to a personal loan, the BNPL program does not charge interest.
You have two payment options: a lump sum payment or free Equated Monthly Installments (EMIs). The lender is required to charge you interest on your amount if you don’t repay the amount within the allotted payback period. A prolonged delay could negatively affect your credit score.
Things To Know
- Point-of-sale installment loans are known as “buy now, pay later” agreements that let customers make purchases and pay for them later.
- Consumers usually put a down payment on an item, then pay the balance off over a specified number of installments.
- Purchase now, pay later plans are much easier to be approved for than typical credit cards or lines of credit and frequently don’t charge interest.
- BNPL typically doesn’t lower your credit score; nevertheless, missing payments or making late payments can.
How Does It Work?
The sole practical difference among BNPL service providers is in the terms and conditions. This is how it typically goes:
- Purchase something from a store that is a participant/partner.
- The “Buy now, pay later” option should be used.
- Put a little portion of the total purchase price down.
- A series of interest-free EMIs will be used to deduct the outstanding amount.
Advantages of BNPL
Below is a list of some advantages of BNPL:
- Makes things more affordable
- Instant credit availability
- Transaction that is safe and secure
- Users can select a repayment period
- Cost-free EMI
- Straightforward and open procedure
You must meet the following requirements in order to use the Buy Now Pay Later option:
- You have to live in India.
- You need to live in a significant tier 1 or tier 2 city.
- You must be older than 18 years. In some circumstances, the eligibility age cap is 55.
- You must be a salaried employee.
- You must be in possession of a bank account and all necessary KYC paperwork.