Due in large part to the rise in online shopping during the epidemic, “buy now, pay later” plans have grown increasingly common in recent years.
The acronym “BNPL” refers to the practice of breaking up a large sum of money into several smaller, equal installments, with no interest and low costs.
Depending on the app, memberships can be used both online and in-store. At the time of purchase, some stores even provide customers with a choice between many packages.
The following are examples of BNPL apps that can be used at popular stores, as well as six others to think about.
1. First-time BNPL customers should use Afterpay
Afterpay provides a simple, pay-in-four plan that is easy to understand for first-time consumers, making it stand out from other BNPL providers who offer more complicated repayment choices.
Important safeguards are built in to ensure that first-time users don’t go in over their heads. To protect your credit, Afterpay suspends your account after a single missed payment and does not report you to collections if you do not make your loan payments.
Afterpay is available at a wide variety of stores, including Nordstrom, Bed Bath & Beyond, and Old Navy.
Afterpay’s eligibility criteria include the following: the amount now available on your Afterpay debit or credit card, the length of time you’ve been using Afterpay, the price of the item in question, and the amount of any outstanding loans from a previous Afterpay purchase.
Afterpay’s payment plan is based on the “pay-in-four” concept. The first payment is due at checkout, and the following three installments are due every two weeks after that.
Afterpay does not charge interest or late fees. If payment is not received within 10 days of the due date, a late fee of up to $8 may be assessed.
2. Affirm is the way to go for major purchases
Affirm functions in a more conventional manner than other loan options. It is able to negotiate lower interest rates and longer payment terms with each merchant. When financing a more expensive purchase, such as a bed or computer, the monthly payments on an Affirm loan may be more manageable because they are stretched out over a longer time period.
Affirm has tens of thousands of retail partners across the United States, including names like Amazon, Walmart, Nike, and Best Buy.
Getting approved is easy with Affirm because they may run a soft credit check that doesn’t affect your score. Your credit history, the proportion of your income that goes toward paying off debts, the amount of debt you now have, and whether or not you’ve declared bankruptcy will all factor in.
When it comes to payback terms, Affirm provides options of 3, 6, and 12 months. The length of the payment plan is up to you, although it can be as long as 60 months for certain purchases. A no-interest, four-month payment plan is also available through Affirm.
Affirm loans have interest rates from 0% and 30%, and there is a late fee of $55 for payments received after the due date. There is no penalty for paying late.
3. You can earn the most rewards with Klarna
Klarna provides customers with a variety of payment options, including a monthly finance plan and a pay-in-four approach. By just downloading the app, users are eligible to join Klarna’s free rewards program and gain access to special discounts. Each dollar spent earns one point in the program, which may be redeemed for merchandise at participating retailers.
Stores including Macy’s, Etsy, Foot Locker, and Sephora use Klarna as a payment option for their customers. It is also possible to create a one-time use Klarna virtual card that can be used at any online U.S. merchant, regardless of whether or not they are Klarna partners.
To determine eligibility, Klarna will perform a soft credit draw. Decisions on approval are based on several factors, including the quantity of the purchase, your Klarna profile, and the cash available in your bank account.
With Klarna’s Pay in 4, you may divide the cost of your purchase into four equal installments, with the first one payable at checkout and the subsequent three due every two weeks. When using Pay in 30, customers have 30 days from the date of shipment to make a payment on their order. Klarna also provides an interest-free monthly payment plan for up to 24 months.
Both the 4-month and 30-month payment plans include no interest or late fees. Klarna’s Pay in 4 payment plan includes a late fee of up to $7 for payments that are late. Klarna offers monthly financing with interest rates between 0% and 24.99%.
4. Zip has the most widespread use
Any merchant that accepts Visa can now take Zip, formerly known as Quadpay. After installing the app on your mobile device, you can either use your debit or credit card to make in-store purchases, or you can create a virtual Zip card to use instead.
Retailers like Best Buy, Amazon, and Walmart stock Zip, among many others. Read this resource to learn more.
Zip does not disclose its customer approval policies. Whether or not you’ll be able to complete the purchase depends on a number of factors, including the total cost, your Zip profile, and the availability of funds on the card you plan to use. A gentle inquiry into your credit history will be performed.
Zip employs a “pay-in-four” timetable for customer payments. All orders have a $40.00 minimum and can be paid in four equal payments: $10.00 at checkout and the remainder of $30.00, $60.00, and $90.00 every two weeks.
Zip imposes a $1 convenience fee for each payment, which amounts to interest plus a late fee. This adds $4 to your final purchase price. Fees for being late range from $5 to $10 for each instance, depending on the jurisdiction.
5. When it comes to safety, PayPal Pay in 4 Payment Process tops
Users in good standing with their PayPal accounts can take advantage of a BNPL payment plan. In addition to the trustworthiness of the PayPal brand, which may reassure first-time BNPL customers, the company also offers the security of the PayPal Purchase Protection feature. So, if you don’t get what you ordered or it’s significantly different from what was described, you might be able to get your money back using PayPal.
The PayPal Pay in 4 option is not usable in physical stores. Retailers including Dillard’s, Target, and Home Depot accept it both online and through the PayPal app for mobile use.
Tips for Obtaining Approval With PayPal, you can expect a light credit check. Your application will be reviewed along with your PayPal account history and data from the major credit reporting agencies to determine your eligibility.
Scheduled payments for PayPal Pay in 4 purchases are due every two weeks, beginning with the initial payment payable at checkout. If you’re making a significant purchase, PayPal also provides an extended payment plan of six, 12, or 24 months.
When you pay using PayPal’s Pay in 4, you won’t have to worry about interest or late fees. The annual percentage rate (APR) that can be applied to the monthly installments is 29.99%.
6. Sezzle is the best option for ethical consumers
Sezzle is a possibility if you want your BNPL bucks to stretch longer. To earn the B Corporation certification held by Sezzle, the lending company had to demonstrate a serious dedication to social and environmental causes and pass a comprehensive assessment. This is not common among BNPL lenders, thus it stands out.
Sezzle is accepted at thousands of online and brick-and-mortar establishments, including Target.
Sezzle may perform a soft credit check, which will not show up on your credit report, as part of the approval process. When setting your spending cap, Sezzle will also take into account your account history with the service.
When using Sezzle, you can spread out your payments across four equal installments. The first of your four payments is payable at checkout, and the remaining three are due every two weeks.
Sezzle does not impose any interest or late fees. However, if you do not pay your bill on time, your Sezzle account will be disabled and you will not be allowed to make any more transactions. There is a $10 cost to revive your account.