Pay later services work similarly to the layaway plans. It means that if you needed to buy a product that you cannot afford, you had to make a payment over a period to purchase it.
Pay later services have made the purchase of products easy by providing the opportunity to own the product alongside the first payment.
What Is Pay Later Service?
Buy now and pay later services are a type of purchase policy offered to buyers. In such cases, the buyer must buy products in installments. You can buy a product immediately without even the need for a credit check. You just must pay the first payment and can opt for a payment plan for 6 weeks. You do not have to pay any additional charges or fees while making the purchase with pay later service.
How does Buy Now, Pay later service Works?
Buy now, pay later services do not come under lines of credit. So, one does not have to go through a credit check like a credit card service. However, you also do not get any plus points on your credit score by making on-time payments.
The pay later service works like this–
- You must create an account on the service providers application and provide the details mentioned below-
- Phone number
- Date of birth
- Credit Card or Debit card Details.
- When you buy a product, you need to choose the pay later service for your payment method. In case you have any overdue amount, you can not make a purchase. In case you choose for brick and mortar then you will be charged 25% for the purchase. You can take the product home after the first transaction. In the case of online purchases, your products get shipped after the first successful payment.
- You must pay back the remaining amount every two weeks. You can also make manual payment before the actual date of payment. You also have the option to automatically pay the reaming amount.
What Happens If You Fail to Pay?
If your payment fails within 10 days of your due date, you must pay a late fee. This fee is usually 25% of the product price or $8 (whichever is less). Whenever buyers miss the payment deadline, they are charged with late fee.
How Much Can You Spend Using Pay later service?
The spending limit on pay later service depends on different factors such as-
- the time you are using the pay later service. New users do not have high limits.
- Your balance on debit or credit card that you have submitted. The more amount you have in your cards, the more purchase you can make.
- The buyer’s payment history also matters. If you have made the payment on time, you become eligible for more spending limits.
Benefits of Buy now, pay later services-
There are many benefits of Buy now and pay later services. When you make a purchase, you do not have to pay any additional charges including the interest rate. You just must make payments on time to keep utilizing the service you also do not go through a credit history check while opting for the service.
Is using a pay later service a good idea?
It is the best option if you want to buy a product and have a payment plan. You should only opt for this service when you are eligible for paying it back. If you fail to pay back on this service, you will have to make extra payments. You need to be wise while making a purchase choice.