The BNPL model offers a great alternative to credit cards, especially for younger people looking for flexibility. Let’s understand what BNPL is, how it works, and why it’s becoming a favorite payment option.
Buy Now, Pay Later, commonly known as BNPL, is a credit-based payment model that allows you to purchase a product immediately and pay for it later, in installments, or after a set period. In simple terms, it gives you the benefit of buying without paying immediately just like a loan. Most BNPL plans in offer interest-free payment periods if paid within the stipulated time, making it an attractive option for online and in-store purchases.
Why BNPL is Popular:
You don’t have to pay anything in advance.
Flexible, often interest-free installments.
Quick and easy approval process, often through mobile apps.
Many retailers offer BNPL services on popular e-commerce platforms like Amazon, Flipkart, Myntra and others
The BNPL process is straightforward and user-friendly. Here’s a breakdown of how it works:
Several companies such as Amazon, offer BNPL services. Each provider has its own conditions, so explore a few to see which one best suits your needs.
To use BNPL, you first need to create an account with your chosen BNPL provider. This usually involves:
Downloading their app (if applicable)
Providing your mobile number and verifying OTP
Submitting basic details like your name, age, and income proof
KYC Verification: Some providers may need an Aadhaar, PAN, or other documents for verification.
When shopping online or in-store, select BNPL as your payment option. Once chosen, you can often see various repayment options, like 3, 6, or 12 months.
The BNPL provider approves your purchase instantly, mostly without a detailed credit check. With approval, you’re good to go and can complete your purchase.
Repayments are automatically deducted from your bank account on the scheduled date. Most BNPL services are interest-free if you pay within the agreed timeframe, but there may be interest or penalties for late payments.
The BNPL model comes with significant benefits:
Convenience: Immediate purchase without paying upfront.
Interest-Free Periods: Many BNPL providers offer 0% interest if payments are made on time.
Flexibility: Multiple repayment options, such as monthly, bi-weekly, or end-of-the-month payments.
Quick Approval: BNPL providers typically offer quick or instant approvals, even without a credit score check.
Budget Management: BNPL is a great tool for managing your budget without spending a huge sum upfront.
BNPL is often compared to credit cards as they both offer deferred payment options. However, here’s how they differ:
| Aspect | Buy Now, Pay Later (BNPL) | Credit Cards |
|---|---|---|
| Interest-Free Period | Up to 30 days or more, if paid on time | Usually up to 50 days |
| Eligibility | Often without strict credit checks | Requires good credit history |
| Repayment | Fixed installments or scheduled payments | Flexible monthly minimum payments |
| Fees | Late payment fees if not paid on time | Annual fees, interest on carried balance |
| Best For | Short-term purchases with small or medium amounts | Higher purchase amounts, long-term credit |
Buy Now, Pay Later is a popular option for Indian shoppers who want flexible payment options. It lets you buy things without paying all at once. Just remember to watch the repayment dates to avoid extra fees and to stick to your budget.
Many BNPL providers cover a wide range of items, from electronics to groceries, but availability may vary.
Timely payments don’t harm your credit score, but frequent delays could have a negative impact.
BNPL is typically interest-free if paid within the agreed period. However, late fees may apply.
Yes, many BNPL providers allow in-store purchases, as long as the store partners with the BNPL service.
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