Millions of individuals all over the world now use buy now, pay later companies like Lay Buy when buying online or in-store. When done correctly, purchase now, pay later can be a quick and cheap way to get credit, however if something goes wrong, you’ll face late penalties and marks on your credit report. This guide will walk you through the process.
While buy now, pay later may be a less expensive way to borrow, it is still a debt. Before you begin, consider how you would respond to the following three questions:
- Would I have purchased this product in the first place if the buy now, pay later option had not been available?
- Is it certain that I will be able to make the payments?
- Is buy now, pay later the best type of borrowing available to me?
If you answered ‘no’ to either of these questions, we’d say you shouldn’t use buy now, pay later at this point.
With BNPL, customers spread the money over a period of weeks or even months
Buy now, pay later (BNPL) is a simple idea in which the BNPL supplier pays the retailer instead of oneself at the till or website checkout You then agree to repay the BNPL provider over a period of weeks or months, allowing you to stretch out your purchasing expenses.
That DOES NOT imply that what you’re purchasing is any less expensive. It just means you have more time to pay off the entire amount, which may help with cash flow.
Lay buy is one of the market leaders in the BNPL space.
Retailers typically collaborate with specific BNPL providers, which means you may have restricted options when it comes to payment. Marks & Spencer, for example, only uses a certain type. So, if you want to pay with BNPL at M&S, you’ll need to sign up for that platform.
If properly handled, using BNPL will cost nothing
One of the primary benefits of BNPL is that it is usually interest and fee-free (unless you fail to complete your payments on time). Places like, Lay buy, do not charge interest or fees for their short-term goods.
When utilized appropriately – for example, by never missing a payment, which would ordinarily result in a cost – BNPL can be utilized as a completely FREE way to borrow.
While the thought of spreading your expenses over a number of weeks for free may be appealing, make sure you’re still confident in your ability to return what you owe. Never be encouraged to go overboard with your spending. Even if you can spread out your charges with BNPL, you’ll always need money to repay, even if it’s not right away.
BNPL repayments have a repayment strategy in place
When you use BNPL to shop, you normally repay the cost of what you buy over a period of weeks.
The actual number of instalments and the frequency with which you must pay them will depend on the BNPL provider you use — by consenting to use a specific BNPL provider at the check, you also consent to its repayment terms and conditions.
The BNPL supplier should then automatically deduct repayment instalments from your selected card or account, so you won’t have to remember to make payments on set days (a bit like a standing order).