What is Buy Now Pay Later? Updated 2022

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How does Buy Now, Pay Later work?

Some consumers do not truly understand how Buy Now Pay Later operates. Is it simpler to pay when I have a job? Are there any basic requirements? Can I still get approved if my credit is bad? Let us talk about the process in greater detail to find out.

You can make online purchases with buy now pay later apps and pay them back over time in weekly, biweekly, or monthly payments. You will be given an initial credit balance once your application is approved, which you can use to make any kind of purchase or payment.

Similar to a credit card, these apps do occasionally charge interest, but they may also provide “interest-free” periods. You can completely avoid paying interest if you settle your account before the period expires so make sure to manage your payments ahead.

Let us say you are interested, you will go to the website and on the checkout screen, you will complete a brief application. Your name, address, date of birth, phone number, and Social Security number could be requested.

A payment method will also be supplied by you. Usually, through debit and credit cards, it is your decision according to what is convenient.  The BNPL provider may then carry out a soft credit check, which won’t have an impact on your credit score, and quickly approve or reject your application.

Take note that the process depends on the BNPL provider because some of them conduct hard credit checks.

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Advantages and Disadvantages of Buy Now, Pay Later

You might still wonder whether using a BNPL app for your online transactions is a smart idea.

The answer is YES! As long as you immediately settle your balance, it’s a truly smart decision. There are some drawbacks you might experience, but they are controllable because the majority of BNPL providers offer a convenient and effective method of repayment.

Advantages of Buy Now, Pay Later

• Interest-Free Periods/Zero Interest Plans

BNPL can be a pretty good deal if you take advantage of an interest-free offer or zero interest plans and settle your balance on time. You will be able to receive your item right away and pay for it over time and you would not have to pay any money in interest. Just a gentle reminder to settle your balance in full every due date to avoid conflicts in budgeting and finance. Some companies offer plans that have less interest but it will definitely lessen your monthly payments and make life simpler for you to pay back the loan.

• No minimum credit score criteria

One benefit of applying for BNPL is that you can still be eligible whether or not you have good credit or bad credit. Therefore, if your credit is poor, you shouldn’t worry because some well-known companies offer a soft credit check and will give you a flexible loan repayment schedule.

• Convenient and Fast application

There is no denying the comfort of using BNPL apps. There are no additional applications or processing times needed. It’s almost as simple as providing your credit card information because many online businesses have built-in payment options.

• Pay in Installment

You can pay in installments with BNPL, which is one benefit. When it comes to installment payments, some well-known companies typically provide a four-time payment. If you have a loan for 10,000 pesos, you must pay 2,500 pesos over the course of four installments to settle the remainder.

The good news is that some companies provide zero or low-interest rates, which is very helpful for ease and flexible repayment.

Disadvantages of Buy Now, Pay Later

• Charge of Late Fees

Regarding the repayment schedule, it is essential to have a reminder. The simplest strategy to minimize additional fees is to pay the balance in full and on time. If you miss making a payment on the due dates, you will probably be penalized for late fees.

• Don’t build credit

You would not be establishing a good credit history using these apps as you would with a credit card because, in most circumstances, your payments aren’t recorded to the credit bureaus.

• Easy to Overspend

There is no doubt that applying for BNPL is convenient, but on the other hand, keep in mind when using BNPL and overspending. Due to how easy it is to overspend when using BNPL, some people are having trouble making repayments.

Overall, it is a smart choice to apply as it provides convenience but it requires self-discipline in terms of budgeting.

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Buy Now, Pay Later Vs Credit Cards

Both credit cards and BNPLs can make attractive offers, and certain borders separating them are continuing to blur. Many major credit cards allow you to enroll in pay-over-time installment plans if you meet the requirements, and certain BNPL providers now provide both virtual and physical cards. 

Some of the differences between BNPL and Credit Cards include when opening an account, paying off the loan, fees and charge interest, benefits, and impact on credit score.

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When to Choose Buy Now, Pay Later

Anytime is a great response. You can choose BNPL at any moment, provided you have the means to pay it back accordingly to avoid charges and that you are fully aware of your choices.

A gentle reminder is in order that you remain responsible for the commitments made on the repayment schedule because it is still a debt. One benefit of BNPL is that some companies are providing practical and convenient ways of repaying, which seems to be helpful.

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Popular Companies in the Philippines that offer Buy Now Pay Later

The leading online loans in the Philippines with monthly installments are listed below:

1.   Home Credit Philippines

The Home Credit Group, is a worldwide provider of consumer credit with operations in 13 nations, including Home Credit Philippines. They are servicing over 7,000 businesses and collaborating with over 2,000 retailers nationwide.

How to Apply?

Simply fill out the application for Home Credit (which requires two valid IDs, one of which must be government-issued) at one of their partner locations where you want to make a purchase in order to sign up.

Home Credit Requirements:

18 to 68-year-old Filipinos

Self-employed or employed for at least three months

Steps on how to Apply for Home Credit:

–         Prepare two legal IDs

–         Select the products you wish to purchase by going to any partner store.

–         Your application will be helped by their sales representative.

–         Pay the down payment once it has been approved. Monthly payments will be made on the outstanding balance.

To know more about Home Credit Philippines, go to our detailed guide.

2.   GCredit

You can borrow from the GCash credit line up to Php30,000 using GCredit. Even with no balance, you are still able to make purchases using your GCash.  If you need to pay bills or make a purchase but are short on cash or GCash balance, this could come in useful. But a gentle reminder that it is only for fully verified GCash users and has high GScores.

How to Apply?

1.   Open the GCash app to submit a GCredit application.

2.   Select the icon for “Manage Credit”

3.   Ensure the accuracy of your verification details.

4.   Enter the relevant contact information and other information.

5.   When your GCredit application has been accepted, you will be notified.

6.   When you pay your bills or use QR to make purchases, you can now use GCredit as a funding source once your application has been granted. 

GCredit Requirements:

Must have a good GScore and be a fully verified GCash user. In order to be fully verified you need to submit a registration form, scan your face and submit a valid ID. 

To know more about GCredit, you can visit https://www.gcash.com/

3.   TendoPay

TendoPay offers credit limits of up to Php6,000 for people without credit cards and up to Php12,000 for those who do have credit cards.

You may make purchases from well-known retailers like Lazada with your TendoPay credit and spread out your payments over 2 to 24 months.

How to Apply?

• Visit the TendoPay website’s Registration page.
• Fill out all the necessary fields.
• Send your application and wait for approval through text or email (you’ll get it in a day or two).
• Once accepted, you can use TendoPay vouchers that you buy with your TendoPay credits to make purchases at merchants like Lazada, 7-11, Zalora, and others.
• Simply choose the “Pay with TendoPay” option at the checkout to make purchases from their other partner merchants.

TendoPay Requirements:

• Own one of our recognized government-issued IDs and be at least 18 years old.
• Valid email address
• Working mobile number in the Philippines.
• Selfie with an ID from the government
• Confirmation of income
• Self-employed bank statements
• Employee Payslip

To know more about TendoPay, you can visit https://tendopay.ph/

4.   UnaPay

You can utilize UnaPay’s credit, which can offer credit of up to Php30,000, to make purchases at Lazada and other partner stores. You can conveniently make repayments due to their numerous online and OTC outlets.

How to Apply?

• Check out the UnaPay website.
• Then click “Request Money” after selecting your loan terms and amount.
• Fill out all the necessary fields.
• Send in all required documents.
• Await email confirmation that will be sent through your email
• Once accepted, UnaPay will top up your Lazada wallet which you can utilize for various transactions within Lazada.

 UnaPay Requirements:

• At least 18 years old Filipino citizen
• Valid email and mobile phone numbers
• Valid Government ID
• Proof of Income
• Proof of Billing

To know more about UnaPay, you can visit https://unapay.com.ph/

5.   ShopeeSpayLater

Shopee is one of the popular companies in the Philippines that focuses mainly on e-commerce. Users have the ability to purchase an item and pay for it later using this function in Shopee’s official app.

Additionally, it provides the option of installment payments for such purchases. Only a few Shopee users can choose to use the SPayLater option at the moment.

How to Apply?

1. Open the Shopee app, then select the “Me” page, then select the SpayLater option.
2. Press “Activate Now.”
3. Enter the OTP code provided to you through SMS
4. Upload a valid ID from the government.
5. Complete the registration form by giving all the needed information.
6. Please read the Terms & Conditions before clicking Next.
7. The facial verification technique is used.
8. The application will be processed by Shopee. If your SpayLater application has been accepted, you will be notified.

ShopeeSpayLater Requirements:

For ShopeeSpayLater requirements, the Shopee app must be installed in its most recent version. A valid gov’t-issued ID is essential and you must send your updated ID photo with complete personal information when registering for SPayLater.

To know more about ShopeeSpayLater, you can visit https://shopee.ph/

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Conclusion

The buying habits of Filipinos have also increased. One of the major advantages of the system is without a doubt that Buy Now, Pay Later promotes Filipinos’ access to financial services.

Assess yourself if you are capable of repaying your selected loan. Remember that in order to avoid paying high-interest rates, you must comply with the BNPL providers’ terms and conditions. Better to prepare ahead and commit once you’re ready.

When you know how to be responsible, using Buy Now Pay Later is a smart decision.