Business

Know More About BNPL Cards

Rapid enrolling, minimal paperwork, and a lower reliance on credit ratings have made the Buy Now Pay Later (BNPL) plan a popular payment alternative for youth and self-employed persons without formal credit. The interest-free credit period on credit cards is usually up to 15-45 days, which makes this one an exciting point. This interest-free period by a best buy now pay later card in India can be prolonged up to 90 days by dividing your monthly purchase into three payments with new players like Uni and Slice..

What is BNPL?

Buy now, pay later (BNPL) is a form of borrowing that allows customers to buy something now and pay it back in three or more installments during an interest-free period. The BNPL provider pays the money with the retailer in full on behalf of the buyer. This option is aimed towards young, moneyed individuals who are new to credit and don’t have credit cards. 

BNPL suppliers employ analytics to get information into consumers’ purchasing habits and assess their creditworthiness. The interest-free term is usually 15 to 45 days, and the credit limit is usually between Rs 500 and Rs 30,000, with a few lenders giving credit up to Rs 1 lakh.

How is BNPL different from a credit card?

Most BNPL lenders provide an interest-free credit term, similar to how credit cards do. A credit card allows you to divide your purchase into equivalent monthly installments (EMIs) over a period of time, usually up to 12 months. Similarly, you can receive this option from BNPL lenders at the time of purchase to transform the payment into EMIs (typically for a short duration). There are also BNPL lenders who allow you to pay in EMIs for extended periods of time, such as 3 to 12 months. Keep in mind, however, that not all BNPL lenders allow you to convert your payment into EMIs.

Things to Know Before Choosing BNPL 

  • EMI Schedule: EMIs are free for a few months; if the due amount is paid within this time frame, there will be no interest charged. However, if the required amount is not paid within this time limit, just a little amount of interest will be levied.
  • Precaution: Users must make timely payments on these EMIs to avoid having their credit score harmed.
  • Credit Score Enhancement: While a higher credit limit requires a higher credit score, organizations do provide this service to customers with lower credit scores. Your credit limit is gradually increased as you use it.
  • Charges: BNP firms may not accrue interest if payments or EMIs are made on time, but if they are not, they will charge interest, which is usually more than the interest imposed on personal loans. There is no yearly charge for any of these businesses, and only a handful have a one-time fee.

The Bottom Line

Both online and offline, you may use the buy now, pay later option. If you’re making an online purchase, you may use the BNPL service to pay right away. Similarly, you may utilize the feature to make a payment at a Point of Sale (POS) by simply scanning the QR code and finishing the transaction. There will be no necessity of entering a pin or a one-time password (OTP). The only thing to keep in mind is that the shop must accept BNPL as a payment method.

Remember to check CIBIL score online to obtain a hassle free BNPL card approval process. Be it Uni Pay or Slice or any other BNPL card, having a reliable credit history is way too important. Although some BNPL lenders are providing credit access to new customers also who do not have any credit journey, it is still important to avoid any negative impressions. 

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