Buy Now, Pay Later (BNPL) is a type of short-term financing that allows consumers to make purchases and pay for them at a future date, often interest-free. Also referred to as "point of sale installment loans," BNPL arrangements are becoming an increasingly popular payment option, especially when shopping online.
Here are five BNPL apps you can use at major retailers, plus alternatives to consider.
Afterpay: Best for no credit check- Unlike most BNPL providers, Afterpay doesn't interact with the credit bureaus. The lender will not conduct a soft credit pull on your application or report on-time or missed payments to the bureaus.
Affirm: Best for large purchases- Affirm operates as a more traditional loan product. It offers longer terms and negotiates the interest rate with each retailer. If you’re looking to fund a larger purchase, like a mattress or computer, an Affirm loan may have more affordable payments spread out over a longer period.
Klarna: Best for earning rewards- Klarna offers three payment plans, including the popular pay-in-four model, its Pay in 30 model and a monthly financing option. After downloading the mobile app, users can join Vibe — a free rewards program with access to exclusive sales. The program awards one vibe per dollar spent, and vibes can be turned into rewards, like gift cards.
Zip (formerly Quadpay): Best for wide availability- Zip, formerly known as Quadpay, is available anywhere Visa is accepted. After downloading the mobile app, you can pay with your debit or credit card or generate a virtual Zip card that can be used in stores.
PayPal Pay in 4: Best for peace of mind- PayPal offers a BNPL payment plan to users who have a PayPal account and are in good standing. Along with the name recognition that may put new BNPL users at ease, the company extends its PayPal Purchase Protection to its BNPL plan. That means if you don't receive your item or it’s different from the description, you may qualify for reimbursement from PayPal.
Neon: is the first Buy Now Pay Later (BNPL) for essential recurring bill payments in the US. Bill categories currently covered include Rent, Electricity, Gas, Water, Telecom, Internet, Insurance, and Parking. Neon's BNPL model allows customers to get a virtual, interest-free monthly credit line for their essential expenses and pay back evenly over time.
No interest financing: Most BNPL apps charge zero interest. That means if you make all payments on time, you use the service for free. It’s rare to be able to finance a purchase, especially a bigger ticket item like a computer, at zero interest.
Soft credit check only: Unlike applying for a credit card or loan, most BNPL apps will not conduct a hard credit pull, which can temporarily lower your score. Also, if you’re worried about a low credit score, you’ll likely have an easier time getting approved by a BNPL app than a traditional lender.
Simple, convenient and fast financing option: BNPL apps pride themselves on the simplicity and ease of their payment plans. Often integrated directly into the checkout process, applications are short and approval decisions are instantaneous, so you can opt into a BNPL payment plan within minutes.
May not be able to build credit: Most BNPL companies don't report on-time payments to the three main credit bureaus, so you may not be able to build credit by using these plans. Some apps still report late payments, so in some situations, using BNPL can only hurt your credit score.
Late fees: Though most BNPL apps won’t charge a prepayment fee for paying off your loan early, many charge a late fee for missed payments. These fees can represent a significant percentage of the total and increase the cost of your purchase.
Could encourage overspending: BNPL plans can make it feel like you’re spending less than you are. For example, if your budget for a purchase is $100 and you opt into a pay-in-four plan, you’ll only pay $25 upfront. For some shoppers, it may be tempting to go back and fill up their cart with more items.
Here are some sites that will let you buy now, pay later-