Buy Now Pay Later: New Poster Boy of Small Loan – “Buy Now Pay Later”

Rajan Kumar, a resident of Noida, wants to buy a smart phone for himself this festive season but neither he has the money yet nor does he want to get EMI made with credit card. He feels that if he had got a loan without interest for a few days for this phone of 80 thousand, then it would have been fun.

If the solution to this problem of Rajan Kumar would have been quite complicated till some time ago, but he is lucky that his problem will now be solved in a pinch. The name of this solution is BNPL. Yes, BNPL means Buy Now Pay Letter

The concept of Buy Now, Pay Later is becoming increasingly popular. This is such a facility that you can buy anything and pay its price after a few days, that too without paying interest. Loan companies and banks bear this cost and give you a few days to repay the loan without interest.

understand the concept

BNPL is a facility in which you get interest free loan for a fixed time limit like a credit card. But you can spend this amount only with that partner merchant from whom you have availed this facility. Not like credit cards everywhere. There is a late payment penalty in BNPL, but the cost of the loan is recovered from the merchant instead of the customer. In BNPL, credit is available up to a maximum of Rs 1 lakh and the customer can repay the loan in 15, 30 or 45 days. The maximum limit can be 6 months.

How to get facility?

You can use it by registering in a few minutes through digital KYC. No processing fee is charged. After the completion of the process, you will be able to make purchases with this loan.

How will you pay?

Interest is not charged on the loan received under BNPL, but if EMI is made then interest will have to be paid. The loan repayment period ranges from 14 days to 6 months. If you pay late, you will also have to pay a fine.

In the Corona era, many people are using BNPL to run the expenses. If you can pay on time, then BNPL can be a better option than a credit card. There are no hassles like interest, GST, surcharge. Everything is easily done digitally.

But it is not that only customers will get benefit from this service. During the Corona period, e-commerce companies, which are struggling with money crunch, have come up with this method to bring back customers. There are currently 33 such fintech companies in the country that are focusing on BNPL. India’s Buy Now, Pay Later market in 2020 was around Rs 44000 crore and by 2028 this market is expected to reach around Rs 4 lakh crore.

However, there is a dark side to this picture as well. Rating agency Fitch has said in its report that the BNPL sector is not clearly giving its date information. This can lead to a big debt crisis going forward. Also, easily available funds can encourage extravagance. If people make purchases beyond the capacity of their pockets, it will be difficult for them to repay the loan later. Anyway, how is the loan? The ideal situation is here that it is not needed. Rest you yourself are smart.

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