Is Buy Now, Pay Later Worth Trying?

You’ve seen it in Lazada countless times. You also noticed that there’s an installment option every time you but from online stores like Linen and Homes, Mumuso, and Kimstore.

Shop Now, Pay Later facility of online stores like BillEase and TendoPay helped bridged the gap and gave unbanked, non-credit card holder Filipinos to have an access to an installment scheme service. This means even without having a credit card, you can still split the payment for your purchases in equal installments.

The question now is this: is it even worth trying? 

The answer is it depends on how you will use this scheme to your advantage. After all, installment plan sans credit card allows you to shop more. Instead of limiting your opportunity to buy items that you need, Shop Now, Pay Later gives you more buying power to purchase items. This will come in handy especially for items that are needed such as new appliance, gadget for your kids’ online class, or work-from-home paraphernalia.

Shop Now, Pay Later increases one’s buying power. You use to limit your spending based on the amount of money you have, which is a good practice. After all, you must only pay for the items you can afford.

Through the installment scheme offered by online cash lenders, you now have a higher buying power. This means you can afford items that are generally our of your price range since the payment terms are more flexible.

You also get to extend payment. It’s okay to pay everything at once so you don’t have to worry later. However, you’ll never know when you might need cash. Through installment scheme, you can extend the payment by setting aside the installment portion every month and use the rest of the funds for other equally important expenses like utilities.

Still, don’t get too excited. It’s true that BNPL scheme is easier and more convenient, but this doesn’t mean it’s your ticket to shopping bonanza.

Here are some things you need to remember before you apply for this type of facility:

• Always set a budget. Even if you can pay on installment, this doesn’t mean your funds are endless. Set a budget for the things you only need to avoid drowning in debt.
• Know your lender. There are several lenders in the market that offers Shop Now, Pay Later facility. This includes BillEase and TendoPay among others. Take some time to get to know them because each lender has its pros and cons in terms of loanable amount, duration of the loan, and interest rate.
• Check the terms. What will happen in case you missed a payment? How much is the interest rate per month? What are the available payment channels? In other words, take some time to read the contract. It contains everything you need to know when it comes to your loan.
• Buy what you need. Again, installment plans will make shopping easier and more convenient, but it’s not an excuse to splurge. Aside from sticking to a budget, stick to your needs only. A loan is still a loan that requires payment.
• Set reminders. Unlike one-time loans, the BNPL facility means you have to make payments on a specific date every month. Always set a reminder to avoid delay. Lenders pay close attention to one’s payment behavior and any delay, regardless if it’s just one time, could affect your chances of getting a higher loanable amount the next time.

More importantly, be a responsible borrower. Lenders who offer this facility helps bridge the gap and gives financial access to those thousands of unbanked Filipinos. How you handle this type of loan will make or break your chances in case you are aiming for higher loans like Housing or Car Loan. This will also reflect on your personality as a borrower.