6 Buy Now, Pay Later Apps in 2023
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6 Buy Now, Pay Later Apps in 2023
The popular Buy Now, Pay Later applications can split the purchase into equal installments, usually with no interest.
Updated on November 3, 2022.
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” ” can be described as a type of payment plan that has become more popular over the past few years, especially as more people shopped online during the outbreak.
Known as BNPL or BNPL for abbreviated, they split your payment into a series of equal, smaller installments, usually with no interest and minimal fees.
Plans can be purchased on the internet and in stores according to the app. Some retailers even provide several plans to select at checkout.
Here are six BNPL apps that you can purchase at major stores, and other options to think about.
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1. Afterpay: The best option for the first time BNPL users
In contrast to other BNPL providers that provide a variety of payment options, Afterpay has a no-nonsense, pay-in-four plan that’s easy to comprehend for new users.
It also comes with key features that can help prevent new users from overextending themselves. For instance, Afterpay pauses your account following one late payment and it doesn’t transfer your account to collections should you fail to pay the loan, which can hurt your credit score.
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Where it’s offered: Afterpay partners with major retailers like Bed Bath & Beyond, Old Navy and Nordstrom.
How to get your card approved: Afterpay bases approval on the amount of funds available on your credit or debit card, how long you’ve used Afterpay, the purchase price and whether you have any other outstanding loans with Afterpay.
Payment schedule: Afterpay employs the pay-in-four method. Your purchase will be divided into equal payments The first one due at checkout and the other three installments due two weeks apart.
Late fees and interest Afterpay does not charge interest. It will charge a late fee up to $8 if the payment is not received within 10 calendar days from when the date is due.
2. Affirmation: Great for big purchases
Affirm is a traditional loan product. It provides longer time frames and negotiates the interest rate with every retailer. If you’re looking to fund an expensive purchase, such as computers or mattresses, an Affirm loan could be cheaper payments spread over a longer time.
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Where it’s offered: Affirm partners with thousands of retailers across the U.S., including Amazon, Walmart, Nike and Best Buy.
How to get accepted: Affirm will conduct an informal credit check, which doesn’t hurt your credit. It will also consider prior payment history with Affirm, how long you’ve had an Affirm account as well as any Affirm loans you may have outstanding, your credit utilization, your income and current debts and bankruptcies.
The payment schedule: Affirm offers three- twelve-, six-, and three-month payment plans. Plans that are longer than 60 months may be offered depending on the amount of purchase. Affirm also provides a zero-interest or pay-in-four plan.
Late and interest fees Rates for interest on Affirm loans can range between 0% and 30 percent. It doesn’t charge a late fee for late payments.
3. Klarna is the best option for earning rewards
Klarna offers three payment plans, including the pay-in-four model, the pay in 30 model and a monthly financing option. Once you download the mobile app customers can join the reward program for free and gain access to exclusive offers. The program gives 1 point per dollar spent and can be converted into rewards to be used at certain shops.
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Where it’s sold: Klarna is available at retailers like Macy’s, Etsy, Foot Locker and Sephora. You can also generate an individual-use Klarna virtual card, which can be used online at every U.S. merchant, including those that don’t partner with Klarna.
How to be approved: Klarna will conduct a soft credit pull. The approval decision is based on the amount of money available in your bank account, your previous experience with Klarna and the amount of your purchase.
Payment schedule: Klarna’s Pay in 4 divides the purchase into four equal installments, which are paid every two weeks. The first installment will be due at the time of checkout. In addition, the Pay in 30, on the other hand, gives shoppers 30 days after the product has been shipped to make payment for purchases. Klarna also offers the option of financing monthly with terms of up 2 years.
Late fees and interest Pay in 4 and Pay in 30 are both interest-free. Klarna will charge a late fee of up $7 for missed payments with the Pay in 4. For financing on a monthly basis, Klarna will charge 0 percentage up to 24.99% interest.
4. Zip: Best for wide access
Zip, previously known as Quadpay it is now available wherever Visa is accepted. After downloading the mobile application it is possible to pay using your credit or debit card, or create the virtual Zip card which can be used at shops.
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Where can it be found: Zip is available at several retailers such as Best Buy, Amazon and Walmart.
How to be approved: Zip doesn’t publicly share how it approves customers. It’s likely to depend on the availability of funds on your credit or debit card, the history you have with Zip and the purchase price. It will perform a gentle credit pull.
Schedule of payment: Zip uses the pay-in-four model. A purchase will be split into four equal installments , to be paid every two weeks. The first installment due at the time of checkout.
Late and interest fees: Zip charges a $1 convenience fee per payment which is in essence interest. The total amount you pay will cost you an additional $4. The late fees could be $5, $7 or $10, depending on your state.
5. PayPal Pay in 4: Best to have peace of mind
PayPal offers the BNPL payment plan to customers who have a PayPal existing account that is in good financial standing. In addition to the name popularity that could help new BNPL users at ease, the business provides PayPal Purchase Protection to its BNPL plan. If you don’t get your product or it’s different from what you expected, then you could be eligible for reimbursement from PayPal.
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Where it’s available Where it’s available: PayPal’s Pay in Four plan isn’t currently available for in-store use. It’s available on the internet or via PayPal’s mobile application at stores such as Dillard’s, Target and Home Depot.
How to get your application approved: PayPal conducts a soft credit check. The approval is based on the application form, your account experience with PayPal and the information supplied by the credit bureaus.
Payment schedule: PayPal Pay in 4 splits your purchase into four equal installments that are due two weeks apart and the first installment due upon checkout. PayPal also offers an option to pay monthly with 6-, 12- or 24-month terms for purchases that are larger.
Interest and late fee: PayPal doesn’t charge interest or late fees with its Pay in 4 plan. Its monthly payment plan may cost up to 29.99 APR of 2.
6. Sezzle is a great choice for socially conscious shoppers
If you’d like to see your BNPL funds to go further, Sezzle might be a good option for you. Sezzle is a certified B Corporation, a designation that demands that the lender passes an exhaustive test and display a demonstrated commitment to environmental and social concerns. This distinction is unique in BNPL lenders.
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Where it’s offered: Shoppers are able to use Sezzle online and in stores at hundreds of retailers including Target.
How to get approval: Sezzle may conduct a soft credit test, which won’t affect your credit score. It will also look at the previous history you have of your relationship with Sezzle when determining your spending limit.
Schedule of payment: Sezzle offers a pay-in-four payment plan. The purchase will be split into four equal installments that are due two weeks apart and the first installment due at the time of checkout.
Late fee and interest: Sezzle doesn’t charge interest or late fees. But if you miss the payment, it will disable your account and you’ll be unable to purchase any more items using Sezzle. To reactivate your account, you’ll have to pay a $10 fee.
APR
Terms
Fees
5.0 NerdWallet rating NerdWallet’s ratings are determined by the editorial staff. The scoring formula considers aspects we believe are beneficial to the consumer, such as impact on credit score, fees and rates as well as the customer’s experience and ethical lending practices.
0%-30%.
4 installments, due every two weeks; monthly payment plans range from 3-60 months.
No fees.
5.0 NerdWallet rating NerdWallet’s ratings are set by our editorial team. The scoring formula takes into account the factors we believe to be consumer-friendly, including impact to credit score, rates and fees as well as the customer’s experience and responsible lending practices.
0%.
4 installments, due every 2 weeks.
Late fee of $8.
5.0 NerdWallet rating NerdWallet’s ratings are determined by our editorial team. The scoring algorithm takes into consideration aspects we consider to be consumer-friendly, including impact to credit score, rates and fees, customer experience and ethical lending practices.
0%.
4 installments, due every 2 weeks.
$7 late fee.
4.5 NerdWallet rating NerdWallet’s ratings are set by our editorial staff. The scoring formula considers factors we consider to be friendly to consumers, such as the impact on credit score, fees and rates as well as the customer’s experience and ethical lending practices.
0%.
4 installments, due every 2 weeks.
There are no charges.
5.0 NerdWallet rating NerdWallet’s ratings are set by our editorial team. The scoring formula takes into account aspects we consider to be consumer-friendly, including the impact on credit score rate and fees, customer experience and ethical lending practices.
0%.
4 installments, due every 2 weeks.
$0 late fee.
$5 rescheduling fee.
$10 account reactivation fee.
4.0 NerdWallet rating NerdWallet’s ratings are decided by our editorial team. The scoring formula takes into account aspects we believe are friendly to consumers, such as the impact on credit score fees and rates customers’ experience, and responsible lending practices.
0%.
4 installments, due every 2 weeks.
$1 convenience fee per installment.
$5, $7 or $10 late fee.
Should you use a buy now, pay later or buy now app?
NerdWallet suggests paying for unnecessary purchases using cash as often as you can. Although BNPL might seem like a convenient payment option, it’s still a form of debt.
Consider the pros and cons when choosing whether to sign up for a pay-later offer.
Pros
No interest financing: Most BNPL apps charge zero interest. That means if you make every payment on time, you are able to use the service at no cost. It’s very rare financing a buy, particularly a bigger ticket item such as a computer, with zero cost.
Soft credit checks only In contrast to applying for credit card or loan, BNPL apps won’t make a hard credit check, which can temporarily lower your score. In addition, if you’re concerned about a low rating on your credit report, then you’ll likely be able to get accepted by the BNPL application rather than a traditional loan.
Easy, quick and convenient financing option: BNPL apps pride themselves on the convenience and speed with their payments plans. Often integrated directly into the checkout process The applications are quick and approval decisions are instantaneous, so you can opt for the BNPL payment plan in a matter of just a few minutes.
Cons
You may not be able improve credit score: Many BNPL companies don’t report on-time payment to three primary credit bureaus, which means it’s possible that you won’t be able to build credit by applying these plans. Certain apps will however transfer accounts with past-due balances for collection, and this could hurt your credit score.
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Late fees: Although BNPL apps don’t charge a prepayment fee for repaying the loan early, many charge the late fee for missing payments. These fees can represent substantial percentages of the total amount and can make it more expensive to purchase.
Could encourage overspending: BNPL plans can make the impression that you’re spending less than what you actually. For instance, if your budget for purchase is $100 and you opt into the pay-in-four option that will cost you only $25 upfront. For some shoppers they may find it tempting to load up their carts with additional items.
Issues regarding customer support: Certain BNPL users may have trouble settling disputes. For instance, if, for example, you purchase an item that you want to return, you need to contact the retailer directly, even though your loan is through the BNPL lender. This could delay the refund. Some lenders also provide only online customer service, meaning you won’t be able to call for additional details.
Alternatives to buy now, pay later
Though buy now, pay later can provide a simple and convenient way to cover the cost of a purchase, it does not provide the same advantages like other financing options. You may want to consider these options.
Credit cards with no interest one-year 0% interest credit card and excellent credit (a credit score of 690 or above) You may be eligible for a card that charges zero interest during the initial period of the credit cardtypically 15 to 21 months. Credit card companies will report payments to the bureaus, which can help build your score. There is also the possibility of receiving an initial bonus, or gain access to some rewards programs.
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Small personal loan: If you want longer terms for repayment this is a good option. They are accessible to all types of borrowers, and like credit cards they can be backed by an history of timely payments to bureaus. You’ll pay interest on the personal loan however, having a long-term contract, your monthly installments may be able to fit comfortably in your budget.
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The author’s bio: Jackie Veling covers personal loans for NerdWallet.
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