Buy Now, Pay Later: All You Need to Know

There are occasions when we can have to buy stuff that we can’t really afford to extend. That’s where buy now pay for later schemes to come in.

Buy now pay later deals do just as they say—you get a chance to buy anything without actually paying for it until a future date. Also described as POS credit, some programs offer you 30 days to pay whereas others enable you up to 12 months to repay.

Cost of Buy Now Pay Later

In general, if you pay the full amount of what you purchased within a waiting period, you will not pay any interest and this is exact same concept in traditional online layby. This is because these intervals are normally interest-free.

If you use buying now pay cautiously later, you could postpone paying for anything for a few months, or even a year, and not spend a cent in interest. Many major companies would not charge you any interest if you clear your debt before your waiting period is up – even if you pay just the day before.

Alternatively, certain deals allow you to spread the expense over a longer period of time, but interest can be paid at a high rate, such as 39.9 percent APR.

Don’t Miss an Instalment

Because of just how to buy now and pay later functions it can easily become costly if you don’t make your timely payments.

If you do not clear your loan before the time limit expires, certain providers may ask for a payment fee or an entire amount of interest will be applied to the debt. In addition, late payment charges can also be paid. Missed payments may also be reported in your credit report and impact your credit score.

So, make sure you set daily reminders and warnings to make sure you clear your debt before interest is applied.

Does Buy Now Pay Later Have an Effect on Credit Score?

Buy now to pay later is a line of credit so how you use it will have an effect on your credit score. You are essentially borrowing the price of the item for the duration of the delay time.

If you use buying now pay later sensibly and make your payments in a timely manner, it shouldn’t have a negative impact on your credit score. It might actually boost it. It’s because when you are using credit wisely, it shows creditors that you’re a trustworthy borrower.

If you skip a payment or refuse to repay what you borrowed when the time comes, this will be reported on your credit history. The mark will then remain on your credit record for 6 years, reducing your credit score.

Buy now correctly used to pay later can be a quick option to acquire an item without needing to part with your money for a while. But there are other options you could use.

For instance, you can register for a credit card with an interest-free purchasing agreement and spread the cost of buying goods over a period of several years without paying a dime in interest. The benefit of a credit card over buying it later is that it can be used at most retailers so that you can spread the expense of a few items rather than just one.