BNPL service providers typically require little documentation and do not always charge interest, which has attracted many people. They offer an alternative to the traditional lay-by method since the buyer can own the products right away, even without paying for them in full. On the other hand, they may be more affordable than using credit cards, which may charge interest at high rates.
Further, a BNPL service can be customised for your financial situation, both by setting up borrowing limits and through their varying loan repayment terms and schedules. If you do not want to risk your credit score, you could opt for a lower transaction amount, which would also make repayments easier.
The growing popularity of BNPL services has also made them a viable payment option for retailers, which further increases customer convenience. Given that most BNPL service providers do not charge interest, you only have to repay the actual amount you borrowed as long as you do not miss any repayments.
However, while using a BNPL platform may not directly impact your credit score, you may find lenders reluctant to let you borrow money if you have outstanding BNPL debts. Applying for a BNPL service is also likely to leave a credit enquiry on your file in future. New regulations require all BNPL service providers to carry out hard credit checks on prospective customers before approving their application, aligning with the responsible lending guidelines.