Pros And Cons Of Buy Now, Pay Later Scheme

Have you been online shopping lately? If yes, then you are not alone.

Because of the pandemic, people were obligated to stay at home to prevent the spread of virus and reduce the risk of getting infected. As a result, many people resorted to the World Wide Web to do what they need – paying bills, transferring funds, and even shopping.

Here’s the thing: not everyone has money within their disposal anytime they life. Most people have to wait for the 15th and 30th (or 10th and 25th, depending on your employer) for salary.

Thankfully, many online selling platforms such as Lazada and Kimstore are offering Buy Now, Pay Later (BNPL) scheme. This means you can pay for your purchases on installment basis for a given term by signing up with your preferred partner like BillEase and TendoPay.

But why should you give BNPL scheme a try? Here’s why:

  • Not Everyone Has A Credit Card

One of the features of credit card is that it allows you to pay in installment. This means you can stretch a particular purchase for months, thereby giving you more time to save up for it. Unfortunately, owning a credit card is not as simple as it seems, especially if you are unbanked.

BNPL scheme lets you pay in installment without owning a credit card. Lazada partnered with several lenders like BillEase, Atome, and PeraJet so you don’t have to pay everything at once.

  • Faster Approval 

Getting a credit card will take time. This is because you need to show that you are capable of paying and that you have an existing bank account with a particular bank before you’re given one.

BNPL scheme skips the process. In fact, application process is easier and more convenient due to minimal requirements. In just little as two minutes, you can get an approval and ensure that your purchases will be delivered in your doorstep.

  • Installment Payment 

Imagine this: your laptop broke and you need to have one since you are currently working from home. You don’t have P30k to spare instantly, but you badly need one for work. So, you go to Kimstore, add a laptop to your cart, and pay in installment for six months.

This is the beauty of BNPL scheme. You can buy necessary items and pay for those in equal installments. This makes it easier for your wallet to manage as well.

  • Affordable Interest Rate 

As of this writing, credit card interest rate is pegged at 3%. This could go higher, depending on the market situation.

Thankfully, lenders who offer BNPL schemes have more affordable rates. For instance, BillEase charges 2.49 percent, which also means payment is easier.

  • Everything Is Online

That’s right. Application is done online, which means you don’t need to line up and wait for days. This makes application more convenient.

Despite these advantages, BNPL scheme has not-so-good sides, too. This includes:

  • Shopping Overboard

Application is online. Plus, you can get approval in minutes without submitting tons of documents. While shopping became convenient, you might be tempted to “abuse” this scheme. It’s easier to shop now and before you know it, you might be drowning in debt.

  • May Affect Credit Score

It’s okay to borrow as long as you pay on time and in full. Otherwise, unpaid loans will reflect on your credit score and could negatively affect your financial standing. This means when it’s time for you to apply for a loan, banks could turn you down because of existing financial obligations.

Therefore, make sure you only borrow what you need and pay on time.

  • Loan Term Is Decided

When you apply for an installment plan, you have no choice but to abide by the terms set by the lender. Surely, they will give you time before they start with the first installment but generally, you cannot negotiate.

Overall, it is important to be responsible with how you use BNPL scheme. Although it offers convenience and ease in shopping, the system is not meant to be abused. At this time, it is important to be mindful of your spending.


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