BNPL is a very useful and easy way to make big-ticket purchases instantly as you can pay for the buy over a period of time in equated monthly instalments. Credit obtained through BNPL is interest-free as long as you make your payments on time and completely. Whereas, credit cards levy interest monthly for the balance carried unless they come with an introductory offer of 0% APR. Apply for BNPL on CreditMantri. 

 

Let us now understand more about BNPL. 

 

What Is BNPL?   

 

BNPL or Buy Now Pay Later is a payment method wherein you can buy something without having to pay from your own pockets. You have to register with a BNPL provider and authorize them to pay on your behalf. Some KYC procedures have to be completed to activate your BNPL account. When it is activated, a credit limit is assigned to you. When you purchase, money gets deducted from the credit limit, and once the lender (BNPL provider) pays on your behalf, you are liable to repay the amount within a stipulated time period. There are penalties for late payments. The biggest benefit here is that the BNPL payments come with a very low or nil interest rate. 

Let us consider an example, suppose you have a credit limit of 75,000 assigned to you by the BNPL Provider and you want to make a purchase of 70,000. The amount gets deducted from your credit limit and you don’t have to pay anything from your pockets. But, once the lender pays for your purchase, you are liable to pay the lender. 

 

Benefits of BNPL 

  • You can split up your payments: This makes even very expensive items attainable since you can break up the amount into smaller installments. 
  • There is no hard inquiry: It is easier to qualify for a BNPL loan since they do not involve hard inquiries. So, somebody who is new to credit or does not have a good credit history will like to purchase through this line of credit. 
  • Helps You Build A Strong Credit History: Timely repayments will help you build a positive credit score provided the BNPL provider reports your account activity to the credit rating agencies. 
  • Instant Credit and Easy to Use: With BNPL, online shoppers can immediately buy what they want with ease as instant credit is available from the BNPL provider.  Their desires are gratified right away. 
  • No Cost EMI: When you make a purchase with BNPL, you only have to pay the product cost as long as you pay on time and in full. You don’t have to pay the Interest amount. 
  • Simple and Transparent Process: The process of applying for credit is very simple, easy, and transparent.
  •  A good credit score or high credit score is not necessary to qualify
  • The BNPL provider levies a lower interest rate on the user for late payments as compared to what credit card issuers charge.   

How Does BNPL Work? 

For Consumers

  • You buy from a retailer who is part of the BNPL network and select the buy now, pay later option at the checkout. 
  • The approval is instant and it takes only a few seconds. Post approval you pay a small down payment like 20% of the purchase price. 
  • You can then pay the amount due in interest-free installments. 
  • You can pay by cheque or bank transfer or you can set auto alerts from your debit card, credit card, or bank account.  

For Businesses,

BNPL is a service offered by a third-party supplier. It offers customers an alternative payment choice upon checkout. 

  • The customer buying from you goes through a quick credit check 
  • Then, the BNPL provider pays the retailer (You) the amount in full. 
  • The customer has to pay the BNPL provider in a series of installments within a stipulated time period. 

Popular BNPL Services

1.CashE Buy Now Pay Later

CashE provides an ample amount of credit limit on completing a two-step account activation process. Enter some basic details and your credit limit will be displayed on your CashE app instantly

Features of CashE Buy Now Pay Later

  • Connect your app to local merchants and start shopping.
  • Get a loan of up to Rs. 4 lakhs to do shopping
  • Complete all your online purchases with a single tap.
  • Repay easily in two billing cycles monthly.  
  • Alternatively, choose EMIs in the range of 3 months to 1.5 years. 
  • No hidden fees or charges 
  • Available to people with poor credit scores. 

 

2. Zest Money Buy Now Pay Later

ZestMoney is a very popular app for online shoppers. They have tie-ups with more than 1.5 lakh stores all over India and give credit limits of upto Rs. 2 lakhs. 

Features of Zest Money Buy Now Pay Later

  • Open an account in minutes and get an instant credit limit approval. 
  • Collaboration with more than 150,000 merchants to bring you the best products
  • Get 0% EMI on your purchases using ZestMoney 
  • Buy items online or in person without using a credit card. 
  • There is no penalty for partial or early repayment.
  • Flexible repayment tenures between 3 to 4 months. 
  • No hidden fees, enjoy complete transparency

 

3. Dhani Buy Now Pay Later

The Dhani One Freedom Credit Card is a little different from traditional credit cards. But, it has some of the best features. 

Features of Dhani Buy Now Pay Later

  • Instant credit line of up to Rs. 5 lakhs depending on your eligibility 
  • A completely digital application process 
  • You can use the credit line to buy items directly using the Dhani app
  • Interest-free credit that can be repaid in comfortable monthly EMIs
  • The availed credit can be utilized at over 1 crore merchants online and offline
  • A nominal monthly fee for using the line of credit
  • You can also choose to get a physical card to use for transactions at your neighbourhood stores

4. Fibe Buy Now Pay Later

Fibe is one of the best BNPL apps that allows you to pay in EMIs of 3 to 24 months. 

Features of Fibe Buy Now Pay Later

  • Flexible loan amounts start from Rs. 5000 to Rs.  5,00,000. 
  • Available 24/7
  • A fully digital journey from loan application to disbursal
  • Quick and secure 

 

5. LazyPay Buy Now Pay Later

LazyPay allows users to pay with UPI at merchant locations. It is more popular among shoppers.

Features of LazyPay Buy Now Pay Later

  • You can shop both online and offline
  • Pay in 15 days or choose EMIs of 3, 6, 9, or 12 months.
  • Can be used across more than 250 merchants including Gaana.com, Swiggy, MakeMyTrip, BookMyShow,  Box8, Zomato, Goibibo, TataSky, BigBasket, Flipkart, and Rapido.
  • Can be obtained with just your PAN and Aadhaar details as documentation.
  • There are no interest charges or hidden fees when you pay on time.  

 

Conclusion

BNPL is highly beneficial in that you can purchase instantly and pay for the buy over time without any interest. But, it must be used judiciously. Before you opt for a line of credit from BNPL, you should read the terms and conditions carefully. You should also know about the late penalties that you will incur if you don’t make timely repayments. 

 

FAQS  of Everything You Should Know About Buy Now Pay Later   

1:What are the guidelines set by RBI for Buy Now Pay Later? 

According to new RBI guidelines, financial institutions which are not banks can no longer use credit lines to load prepaid instruments like stored value cards or digital wallets. The buyer can then preload their wallet with cash or debit their bank or credit card accounts. The RBI permits 90 seconds of credit. 

2:How is the future of BNPL?

BNPL is bound to become more and more popular as people can obtain instant credit and pay back in EMIs over a period of time. But, one must also remember that BNPL is also a loan. Not paying on time will attract late penalties. So, the future of BNPL looks good as long as customers are able to use the facility properly and clear their payments on time.