As you read, there is a high chance that someone is buying an item right now on the BNPL scheme. That is the craze of the buy now pay later plan in online markets.
But if you want to answer whether or not it is a good scheme, it all depends on you. Only you and your actions can decide for yourself whether buy now pay later is good for you or not.
What is Buy now and pay later?
BNPL is the abbreviated form of buy now, pay later. It is a financing scheme where a consumer does not have to pay the amount of purchase items right away. They can pay the due amount in around 3 to 4 installments without interest. Several online companies and merchants provide the facility of BNPL to interested customers.
This financial scheme lures young people, someone who does not have a credit card, people facing the end of the month, and those who are new to the whole concept of credit. The BNPL facility can be a terrific substitute for credit cards, and it can be a very effective method of payment if you are short on money at the moment.
What are the benefits of BNPL?
If you are not yet sure about the benefits of the BNPL service, here is a list of some of the significant benefits you can reap by using the buy now pay later next time you want to buy something but do not have money.
- BNPL helps in increasing the affordability of the products and services. You do not have to wait till you have money to purchase something. Just go and buy that gaming system you have your eyes on for an extended period, and you can quickly pay the installments in the agreed period.
- Unlike in the case of credit cards, where you have a specified limit which you can spend every month or year and are comparatively harder to get, through BNPL, you can have access to credit in no time.
- You do not have to bother about fraud or wrong transactions with BNPL because it is safe, transparent, and secure.
- If you are purchasing something on BNPL but know that you will be able to repay the amount in a lesser period, you can set your repayment tenure according to that. You can customize your tenure period to repay the amount with BNPL.
- The best and the most likely feature of the BNPL service is that it does not charge any interest on your monthly installments. Yes, you heard that right! It is the best no-cost EMI option for all shoppers who love online shopping.
- You do not have to fill out several forms or visit any office a dozen times to approve the loan or credit. BNPL is a straightforward process you can use in the comfort of your couch.
Is BNPL a good idea?
After reading all the benefits of the buy now pay later scheme, you must be thrilled and want to use this financial boon immediately. You must think that there is no cost EMI and you can quickly pay your due amount in some easy installments, but you are not right about that.
The BNPL scheme is like other apps and methods available in the market, forcing people to spend more on items they do not even need. They think they can quickly repay the amount, but in reality, they do not have that kind of amount and fail to pay, decreasing their credit score.
BNPL has its benefits, but you should not forget to read all the terms and conditions. Next time before buying anything, buy now, pay later; ask yourself if you can afford this item and whether you will be able to repay the amount in the designated time.