The Best Buy Now Pay Later Apps
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Buy now, pay later (BNPL) is hardly a new concept in the financial world. This idea of breaking up payments into smaller, manageable bite-sized chunks has existed for decades. But this concept does seem to have made a resurgence in popularity lately.
There are numerous players in the BNPL market, indicating this option will not be going away anytime soon. With so many choices, knowing the differences between big BNPL providers could help you with your purchasing decisions.
It is advantageous for the buyers and sellers as it allows you to own the products you have your eyes on while making multiple payments over time. It can make the purchase convenient and easier for you and make it seem more appealing to the shoppers. The most significant advantage of BNPL is that it is often an interest-free loan, and the company does not run a credit check. No harm, no foul!
Here's a look at companies offering this convenient payment method and how it may impact your wallet.
In this article
How does Buy Now, Pay Later Work
The BNPL option allows you to spread the payments on a big purchase in a loan that splits payments into equal installments paid over time. It usually runs in a few months, and the loans are interest-free if the payments are on time. Unlike traditional credit card purchases, where you are charged interest each month you carry a balance (unless you have a card with a 0% APR), BNPL can help you save money while helping you get your big-ticket item.
Also, unlike applying for a new credit card, you can easily qualify for BNPL, which works well for those with bad or no credit. There is no hard credit pull, making it more appealing for those with poor credit. Through BNPL, you can manage your cash flow easily and split your payments in a convenient way that fits your budget.
However, BNPL is not for everyone. Before you commit to a loan, you must know the terms of the deal and understand the fees it comes with. Not all BNPL programs allow you to build credit, and it could also lead to overspending, which can put you in trouble later.
Overview of the best BNPL apps
Buy Now Pay Later Company | Best For |
Affirm | Large purchases |
Afterpay | Gifts, jewelry, and fashion |
Klarna | Cash-strapped |
LutherSales | Long payment terms |
PayPal | Payments up to 6 months |
Sezzle | If you need extra time to pay |
Zip | Virtual Visa card |
- Access up to $750 per pay period
- No interest, mandatory fees, or credit checks
- Over 15 million downloads and counting
The best BNPL apps
Affirm
Affirm is one of the most popular Buy Now Pay Later services and for a good reason. It’s available at many major retailers, including Wal-Mart and Amazon. Affirm is one of the few BNPL with extended payment options. You can choose three, six, or 12-month installment plans.
Purchases can not exceed $17,500 with Affirm, making it a good option for larger purchases. Be aware that your credit score will be pulled and used for the approval decision and will affect the interest rate you pay.
Pros
- Available at huge retailers, including Wal-Mart, Amazon, and Target
- Easy to navigate app for making payments in a few clicks.
- No hidden fees or late fees
Cons
- Credit is used to determine eligibility
- Your interest rate can be as high as 36%, depending on your credit score
Afterpay
Another recognizable name in the BNPL space is Afterpay. Unlike Affirm, your only option is to pay over six weeks with Afterpay. Once you select the item, you put down 25% and then make smaller payments bi-weekly.
With Afterpay, no credit check is required, so it won’t penalize you for using the service. Plus, you won’t pay any interest if you pay off the balance within six weeks. If you are late, though, be careful. Afterpay will charge up to 25% of the purchase price for a late payment fee.
Pros
- No interest if paid off within six weeks
- No external credit check
- Available with thousands of retailers, though mostly with gift and fashion purchases
Cons
- Hefty late-payment fee
- Limited to purchases within the featured categories
Klarna
Klarna offers a “Pay in 30” option, which allows you to purchase with $0 down as long as you agree to pay in full within 30 days. There is also a monthly installment option for larger purchases, which is subject to interest.
You'll need to be a subscriber, however, which comes with a $7.99 monthly fee.
Klarna does not perform a credit check when downloading the app or creating a Klarna account. However, a soft credit score pull is performed if you take advantage of the Pay in 4 or Pay in 30 options.
Pros
- No interest if paid off within four payments or 30 days (whichever plan you choose)
- Available for a variety of purchases
Cons
- Credit check performed
- Late fees charged up to $25, depending on your payment plan
LutherSales
LutherSales has offered Buy Now Pay Later financing options since 1967. Upon approval, customers purchase through the LutherSales website and select the payment plan option. Approval is based on job history and not necessarily credit score, although your credit is evaluated to determine your credit terms.
Payment terms are flexible, including up to 36 months in some cases. However, you are limited to the products on the website and can only purchase one room at a time. For example, you can only purchase kitchen items and cannot include bedroom items on the same ticket.
Pros
- Approval is based on job history, in addition to credit scores
- Flexible payment terms
- Wide product selection, including big-ticket items like mattresses and appliances
Cons
- Must purchase through the website
- Can only purchase one “room” at a time, such as a living room set or bedroom set
- Credit check is required
Paypal
PayPal is a name almost everyone recognizes by now, but it does offer its version of Buy Now Pay Later. PayPal offers a credit line, which requires a hard credit check for approval and is reported to the three credit bureaus. If approved, you can pay in 4 or monthly interest-free, no matter how much you pay upfront or each time. It’s accepted anywhere a merchant accepts PayPal.
The PayPal credit is instant and upfront, so you don’t have to wait for a plastic card to arrive in the mail. And as long as you pay it in full within six months and stick to your credit limit, you are not subject to any payment terms or interest rates.
Pros
- Up to 6 months with 0% interest
- Can be used wherever PayPal is accepted
- Instant approval and use of credit line
Cons
- Hard credit check required
Sezzle
Sezzle is similar to other options on this list but with one unique feature. You choose Sezzle at checkout for starters, which is currently accepted in-store and online with 44,000 brands. You can pay in 4 payments within six weeks to avoid any interest or late fees. You do have to make an installment payment upfront, though.
What sets Sezzle apart is the ability to push out your bi-weekly payment. So if you experience a financial emergency, you could push out a payment one more week without any charges. If it continues, each push-out will cost you $5, which may be worth it to avoid late fees.
Pros
- Instant approval
- Interest-free payments
- Good for both in-store purchases and online shopping
Cons
- Limited to certain brands and retailers
- No other payment options except Pay in 4
Zip (previously Quadpay)
Zip offers a unique BNPL model. Whereas most purchases require you to pay through the buy now pay later apps, Zip produces a virtual Visa card for your checkout. Purchase anywhere and choose Zip at checkout, or if Zip is not available, it will offer a one-time Visa card to use.
You can make four equal payments without interest and are only charged $1.50 in installment fees. You must make the first installment payment immediately, but Zip does not perform a hard credit check.
Pros
- Can be used anywhere Visa is accepted
- Interest-free payments
- Good for both in-store and online purchases
Cons
- Up to $10 late fee
- Soft credit check performed for approval
- Access up to $750 per pay period
- No interest, mandatory fees, or credit checks
- Over 15 million downloads and counting
Summary of the best BNPL apps
Company | Payment terms | Hard credit check required | Interest |
Affirm | 3-, 6-, and 12-month options | No | Interest Up to 36% |
Afterpay | Pay in 4 installments over six weeks | No | Up to 35.99% |
Klarna | Pay 30 days or a monthly plan | No | Up to 29.99% |
LutherSales | Up to 36 months | No | Up to 23% |
PayPal | No preset installment terms | Yes | Up to 6 months 0% interest |
Sezzle | Pay in 4 installments over six weeks | No | 0% |
Zip (formerly QuadPay) | Pay in 4 installments over six weeks | No | 31.11% |
FAQs
What’s the difference between a hard credit pull and a soft credit pull?
A hard credit pull is used by lenders when your creditworthiness needs to be determined for lending you money. This is reported to the three credit bureaus and is noted on your credit report. A soft credit inquiry is used when employers or lenders want to review your credit, but it’s not necessarily for a lending decision. It does not impact your credit score as much as a hard credit pull does.
Can I use a BNPL to purchase anything?
Technically, there is likely a BNPL that will allow you to make the purchase you need. However, simply because you can purchase anything doesn’t mean you should. To avoid overextending yourself, you should limit the purchases to essentials only and carefully choose your repayment plans.
Is Buy Now Pay Later similar to layaway?
No, it isn’t. BNPL services and layaway make installment payments on an item, but their process is different. In case of layaway, you don't receive the purchased item until you pay for it in full. In the case of BNPL programs, the order is processed as soon as you make the initial down payment.
What if I fail to make the repayment?
You will pay a late fee if you cannot pay the monthly installments on time. Eventually, the account is sent to the collections, and it might show up on the credit report affecting your credit score.
Why you should (or shouldn’t) use BNPL
Buy Now Pay Later options are helpful when money is tight, but you know you can pay at some point. This might be a better financial solution for you versus paying high-interest rates with credit cards.
You can get into trouble with a BNPL if you pay late. Most providers will charge you for late fees, and you could be reported to the credit bureaus with a late payment if it goes on long enough. The best approach is to sign up for automatic payments and budget accordingly, making the payments on time.
- Access up to $750 per pay period
- No interest, mandatory fees, or credit checks
- Over 15 million downloads and counting
The bottom line
Buy Now Pay Later companies have been around for decades and can help make more significant purchases easier on the wallet. If you choose any of these companies, be sure to do your research before you get to the checkout. Each company offers a slightly different advantage — and disadvantage — which could make a big difference when budgeting.
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Writer
Sara Coleman is a former corporate gal turned creative entrepreneur. She began writing professionally several years ago and now contributes to multiple websites, blogs, and magazines. She’s also an avid reader and can’t resist a great historical fiction novel. Sara holds a BA in journalism from the University of Georgia and can be found supporting her Bulldogs every chance she has. She resides in Charlotte, North Carolina, with her wonderfully supportive husband and three children. When she’s not ushering her kids to sports and dance lessons, she can be found creating content for her own website, TheProperPen.com.
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