Buy Now Pay Later is an interest-free financing option being provided in Australia by numerous financial service providers, most notably Klarna, Afterpay, and Zip, to name a few.
The concept is simple: you can buy what you want right now and start using it, while splitting up the cost over a number of equal monthly payments as part of a payment plan, mostly without incurring any interest expense.
Although this is an interest-free financing solution, many buy now, pay later service providers do charge a transaction fee each time you avail of the service. Although this fee might seem low, it can amount to a significant sum especially with large value purchases.
To qualify for a buy now, pay later plan, applicants must:
Be over the age of 18. Hold a valid debit/credit card in Australia, in your name or with proper authorization. Also, it might help if the applicant has a good credit history and/or can prove sufficient affordability to make timely repayments, although this might not be necessary with all service providers.*For eligibility and details for applicants residing in South Africa, go to Viva Payday Loans South Africa.
|
Service Provider |
Details |
Associated Costs |
|
Afterpay |
Allows you to make repayments over four equal installments, falling due after every fortnight |
Charges $10 if payment is delayed, additional $7 if it remains unpaid for another week |
|
Klarna |
Acceptable at more than 200,000 outlets across Australia |
Has some late fees that are applied |
|
Humm |
Offers up to $30,000, to be repaid over a period of fewer than 60 months |
Charges a monthly fee of $8 if a term between five to sixty months is selected. Also charges late fees |
Subscribing to a buy now, pay later service is very easy.
You start by signing up with a service provider either online or by visiting the store, and approval is usually instantaneous. Some providers will limit you to a pre-specified list of merchants where you may avail of the financing facility, while others are generally accepted at all those merchants that accept credit cards. The repayment term starts immediately after you make the purchase, and it’s up to you to ensure you have sufficient funds on your card as and when payment becomes due.Usually, all the processing is done electronically and no documents must be submitted.
Yes, you might be able to subscribe to a new loan even with an existing loan depending upon the provider’s terms and conditions.
Yes, most providers have interest-free options although some might only offer an interest-free period for a few months, after which some interest might be charged.
Check your options before you borrow:
* This statement is an Australian Government requirement under the National Consumer Credit Protection Act 2009.
The Government’s MoneySmart website shows you how small amount loans work and suggests other options that may help you.
* This statement is an Australian Government requirement under the National Consumer Credit Protection Act 2009.