What is Buy Now, Pay Later Financing And Is It Right For You?

bnpl shopping
Image by mohamed Hassan from Pixabay

What’s the first thing that comes to mind when you think of buying something? For a lot of millennials, the answer is spending money they don’t have. With credit card debt at an all-time high, it’s no wonder more and more people are turning to Buy Now, Pay Later Financing.

But before you sign up for one of these services, first, ask yourself:
Are you interested in buying something but having that purchase take up too much of your monthly budget? Have you ever wanted to buy something but you don’t want to:
a) wait for the paycheck
b) use a credit card?

If one of your answers is yes, then there are several financing options but in this article, let’s cover one of the most popular methods: Buy Now, Pay Later (BNPL) to see if it is right for you.

What is Buy Now, Pay Later (BNPL)?

Buy Now, Pay Later (BNPL) is a way to buy something without waiting for your next paycheck or using your credit card. You can use this financing option to buy something that you want right now, and then you’ll have to pay for it later. Up to date, there are over 1000+ retailers that have partnered with Buy Now, Pay Later (BNPL) apps to make it easier for people to make purchases on their websites. 

How does it work?

On average, Buy Now, Pay Later offers an interest-free installment amount that tends to be about 30 percent of the purchase price. For example, if you buy a computer for $600 using buy now, pay later financing, expect to make monthly payments of around $180 for three months.
Note: Some platform offers Pay Later in four or more months interest-free installments.

If you are still confused, we got you covered with a video from Bloomberg that shows how it works.

Here’s How Apple’s ‘Buy Now, Pay Later’ Service Will Work by Bloomberg Technology

As you might have already noticed, there are several Buy Now, Pay Later (BNPL) options out there, so it’s important to know the pros and cons of BNPL and which option is for you to maximize the full potential of BNPL.

Pros of using Buy Now, Pay Later (BNPL)

You can use it on anything: clothes, electronics, furniture. You name it. Buy Now, Pay Later (BNPL) has thousands of products available, so whatever it is that you’re looking for—especially if it’s already in your cart and ready to check out—you can buy it now with BNPL.
Pay over time with 0% interest payment. You can use it for big purchases: $1000 or more. Unlike credit cards where you might not be able to get approved if you don’t have a high credit score, with Buy Now, Pay Later (BNPL) there might not be such requirements.
To make purchases that wouldn’t fit into your budget. This is where Buy Now, Pay Later (BNPL) comes in handy because you can purchase what you want and then slowly pay off the cost over time without interest!
Get approved without a hard credit check. You can apply for BNPL and never worry about having a hard inquiry on your credit report.

Cons of using Buy Now, Pay Later (BNPL)

Not all retailers accept BNPL. If you want to use BNPL, then make sure that the retailer accepts this payment option.
It’s easy to overspend. As you don’t have to pay right away, you might accumulate more debts making it harder to pay off the purchase as you are spending on borrowed money.
Late fees. If you’re late on a payment, then there are typically fees associated with that. Typically, late fees correspond to a penalty of under 1.5% per month on the overdue amount if they do not make payments on time.
It could hurt your credit score. Some platforms may report your missed payment to credit reporting agencies.

How to decide if buy now, pay later financing is right for you

Image by mohamed Hassan from Pixabay

A lot of people tend to think buy now, pay later (BNPL) is just a payment method so they use it whenever they want and then forget about their monthly installments. This leads to missed payments, which can result in late fees or interest.

If you’re not sure if buy now, pay later financing is the right choice for you, here are a few things to consider:

  • Do you want the purchase right away?
  • Can you wait for the paycheck or use a credit card?
  • How much will the monthly installment be?
  • What is the max purchase amount?
  • Can I return the product if I don’t like it?

The last thing you want to do is get stuck in a cycle of debt, so make sure that Buy Now, Pay Later financing is right for you.

If you decided that Buy Now, Pay Later (BNPL) is right for you, here are a few things to consider:

Don’t overspend. Resist the temptation! When using BNPL only spend up to what you can afford each month with cash flow in mind. A great way of doing this is by creating a budget plan first checking if BNPL installment is affordable.
Create a payment plan and schedule. This will help you avoid any missed payments and the added fees that come with it.
Set up reminders. If you’re forgetful (like me), then set up automatic reminders on your phone or computer so you don’t miss a payment.

BNPL can be a great way to finance your purchase but only if it’s used correctly. So make sure to consider all of the pros and cons before making your decision!

If you’re someone who likes to spread the cost of your purchase over time, then BNPL might be the right option for you because most platforms offer 0% interest on installment plans.

Malaysia & Singapore

  • Atome
  • FavePay Later
  • Paylater by Grab
  • SPayLater by Shopee (1.25% a month)

United States

  • Affirm
  • Afterpay
  • Paypal
  • Klarna
  • Sezzle


Buy Now, Pay Later (BNPL) offers an alternative to traditional financing by allowing customers to make purchases and pay for them at a future date. BNPL is especially popular among online shoppers because of its convenience factor: you can browse products on your computer or phone without leaving the comfort of home.

There are many pros and cons when it comes to BNPL, so it’s important to consider all of them before deciding if this type of financing is right for you. Remember: only spend what you can afford each month and always make your payments on time!

If you’re still not sure or want more information, you can comment down below and we will try to help you with your journey to Buy Now, Pay Later!

Disclosure: This blog receives no commission for recommending the Buy Now, Pay Later (BNPL) platforms that we shared with you in our post.