Buy now and pay later (BNPL) is a kind of a credit line where the service provider gives the subscriber a credit limit to make payments for an expense and the subscriber pays back the consumed sum or the credit later to the service provider, either in full or partially (eventually the full amount in more than one installment).
Know About Famous BNPL Apps in India
Know About ” Zest Money BNPL “
Zest app can be downloaded to get the facility of BNPL at zero interest and no joining fee. One can get a credit limit of up to INR two lakh, depending on the credentials of the applicants. This app is accepted by both 10,000 online stores and 75,000 physical retail stores.
Zest Money does the payment on the behalf of the user and then converts these total payments into two or three EMIs which are free of any interest. The number of EMIs may go up to 12. To change the agreed EMI tenure will need additional charges.
Penalty: There is a penalty of INR 250 on missing an EMI.
Some of the prominent partners include Amazon, Flipkart, Uber, Samsung, among others.
Know About ” Freecharge Pay Later “
With this application one can pay bills and make purchases from more than 25000 online and offline retail outlets. There is no processing fee at this point in time. The maximum amount provided by the company is INR 10,000 per month. Billing cycle is of one month that means one has to pay the spent amount back within that cycle the bill is generated on 5th of every month. This amount is completely interest free within this span.
Penalty:
| Amount (INR) | Penalty (INR) | Penalty Will Not Exceed (INR) |
|---|---|---|
| Till 1000 | 10 | 75 |
| 1000 to 3500 | 10 | 325 |
| 3500 to 10000 | 10 | 475 |
Some of the partner companies include Swiggy, Zomato, Myntra.
Know About ” Paytm Postpaid “
Paytm is providing a credit line of up to 60,000 with the help of this application. It can be used wherever Paytm payments are accepted, which includes more than five lakh offline and online stores. This credit line is available again on no interest for a monthly billing cycle.
Penalty:
| Amount (INR) | Penalty Per Month (INR) |
|---|---|
| Till 100 | Nil |
| Beyond 100 to 250 | 10 |
| Beyond 250 to 500 | 25 |
| Beyond 500 to 1000 | 50 |
| Beyond 1000 to 2000 | 100 |
| Beyond 2000 to 5000 | 250 |
Paytm’s partners are spread in all domains and localities in India.
Know About ” ePayLater “
This BNPL is designed for self-employed people and more particularly for the business men, where they get a credit line of up to INR 25 lakh to make purchases for a span of 14 days at no interest. This app provides reward points on using this credit limit. Which is equivalent to a portion of the money consumed. People who do not need the credit can also use this to earn reward points.
Penalty: It is quite simple with people defaulting on paying the company. There is a penalty of 3% flat on the defaulted amount every month.
They have partnered with some of the biggest wholesale brands in India.
Know About ” MobiKwik ZIP “
Money from MobiKwik ZIP can be transferred to banks to make payments and used to pay bills and purchase goods offline and online, buy rail tickets etc. Subscribers can get a credit of upto INR 30,000 at no interest within a billing cycle. Exceeding the billing cycle would mean that the company is entitled to charge interest on the credit line. Billing cycle is 21 days. Facility to convert the outstanding to EMIs is not available.
- There is a subscription charge of INR 99.
- Wallet transfer to the bank is charged at the rate of 3.95%+GST.
- There are wallet inactivation charges if the subscriber does not login into the account and that can be between 100 and 400 (depending on the years).
Penalty on not paying the bill:
| Outstanding Amount(INR) | Penalty Till 3 Billing Cycles(INR) | Penalty After 3 Billing Cycles (INR) |
|---|---|---|
| Till 100 | 20 | 1% of the total outstanding |
| Beyond 100 to 500 | 50 | 1% of the total outstanding |
| Beyond 500 to 1000 | 100 | 1% of the total outstanding |
| Beyond 1000 to 2000 | 200 | 1% of the total outstanding |
| Beyond 2000 to 3000 | 200 | 1% of the total outstanding |
| Beyond 3000 to 4000 | 200 | 1% of the total outstanding |
| Beyond 4000 to 5000 | 200 | 1% of the total outstanding |
| Above 5000 | 200 | 1% of the total outstanding |
Some of the partners include Zomato, Amazon, Myntra, etc.
Know About ” Flipkart Pay Later “
Flipkart has introduced its own version of BNPL, where the company provides a credit limit of up to one lakh. This service can only be used for shopping from Flipkart, Flipkart retail, Myntra and 2GUD, which are all subsidiaries of Flipkart. To avail the interest free credit, the monthly bill of the previous month has to be paid by 5th of every month. Facility of converting the purchase to EMI is also available but this limit is lower than the total credit line provided for the same account.
Penalty:
| Amount (INR) | Penalty Per Month |
|---|---|
| Beyond 100 and 500 | 60 |
| Beyond 500 and 1000 | 125 |
| Beyond 1000 and 2000 | 175 |
| Beyond 2000 and 3000 | 300 |
| Beyond 3000 and 4000 | 410 |
| Above 5000 | 600 |
Know About ” Ola Money Postpaid and Wallet “
This app provides cashback on spending on partner apps, maximum cashback can be 30% with an upper limit differing from company to company. It has the facility of OlaMoney wallet as well. Late fee is charged on the 1st, 31st, 61st and 80th day after the due date. There is no late fee after the 80th day. The maximum credit line is of INR 25,000, which is available for a billing cycle of 30 days post which there will be a penalty.
Penalty:
| Amount (INR) | Penalty |
|---|---|
| Till 250 | Nil |
| Beyond 250 to 500 | 50 |
| Beyond 500 to 1000 | 75 |
| Beyond 1000 to 2500 | 100 |
| Beyond 2500 to 5000 | 250 |
| Above 5000 | 500 |
All Things To Know, Before Opting BNPL App
EMI Schedule: EMIs are free for a few months, if one pays the due amount within this time frame then it is going to be without any interest but on exceeding this period one will be charged nominal interest (nominal in comparison to other landing tools).
Precaution: Users need to be punctual in the payments of these EMIs as defaulting would hamper their credit score.
Boost to Credit Score: For a better credit limit one needs to have a better credit score, but companies do provide this facility to people with poor credit scores as well. With gradual usage your credit limit is increased.
BNPL can also be used to improve your credit rating as paying your EMIs regularly will win you a better score, especially the people who have defaulted in the past repaying their loans and credit card bills.
Where to Use: This facility BNPL can be used at partner companies of the service provider; more the number of partners better for consumers.
Charges: BNP companies may not charge any interest if the payments or EMIs are paid on time but if not, an interest charged is levied; which is in most of the cases more than the interest charged by personal loans. None of these companies have an annual fee and only a few have a joining fee.
Know , Is BNPL For You Or Not
BNPL is only for those who are confident of repayments in accordance with the norms of the company. Failure to do so will attract penalty charges, which could exceed expectations. As already mentioned, a non-payment could potentially ruin the credit score of an individual thereby making it difficult for them to apply for future lending opportunities.
BNPL is ideal for those under the following circumstances:
- Borrowers with a certain salary or income from a fixed source.
- Businessmen who are short of liquidity.
- Those who wish to improve their credit scores.
- Those who want to use it as a cashless tool for hassle-free transactions and then pay the service provider in full.
It is not at all recommended for people who are not certain about their income and those who do not see any regular flow of money in the coming future. Such people should rather opt for personal loans, based on specific criteria and requirements.
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