Enough popular service among Filipinos. Buy now and pay later is very easy in use, just try BillEase and you will see it. This review is about one service and how you can use it and for what it need.
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Buy now pay later Philippines – there are a plethora of options to use when shopping online. People may use their credit cards and pay back borrowed money later during a specific period. Users may also benefit from installment payment options. But there is another convenient option called “buy now pay later”, or BNPL.
The BNPL type of payment option has been there for years waiting for buyers to benefit from its usage. However, it became popular only during the last two years because of the pandemic. More buyers shifted to online shopping rather than using traditional means.
Typically, this option is available in most countries and implemented by major retailers. For instance, Samsung buy now pay later Philippines offers buyers to get the phone without becoming bankrupt.
It seems like a great option to use, but what’s the trick? Are there any hidden fees or drawbacks of this payment plan? Our readers will learn more about the buy now pay later payment plan in this article.
Table of Contents
What Is Buy Now Pay Later Philippines?
Buy now pay later (or BNPL, in other words) is a type of installment plan or loan. The plan divides one purchase into several (usually four) equal payments, with the first due at checkout. The buyer covers other payments from their debit or credit card until the purchase is fully paid.
Usually, the platform offering BNPL plans gains profit from transactions. But in some cases, such services may impose interest rates and late payment penalties. However, some platforms don’t charge penalties at all.
Shoppers find buy now pay later options when they shop online. Sometimes, users report they were offered to use BNPL plans even when buying goods in physical stores. For instance, buy now pay later groceries the Philippines. Moreover, users find BNPL payment options to travel and even for health care.
How Does Buy Now Pay Later Work?
Let’s assume one wants a laptop buy now pay later Philippines. But how do you buy one using the BNPL plan? How does the plan even work?
Buy now, pay later applications and platforms enable Internet users to make purchases online and cover them over time. Typically, BNPL platforms offer weekly, bi-weekly, or sometimes monthly installments. Yes, one can tell it’s a different option than installment plans that require payments only once a month.
In rare cases, BNPL apps may impose interest rates similar to a credit card. However, they may offer “interest-free” periods. If a buyer pays off their balance before the end of the period, they avoid paying interest at all. So, technically, if you pay on time, there is no interest. Note: the regular interest rate on buy now pay later platforms is usually very high.
These are some of the most used and known services in the world that offer to buy now pay later options:
- Bill Me Later/PayPal Credit;
Citibank buy now pay later the Philippines also offers such installment plans. Users should seek retailers that offer these payment options. Try adding a product into a cart, proceed to a checkout page, and there you will find BNPL options.
Typically, a BNPL option should break a purchase into four equal installments. The first installment is paid at checkout. The other installments should be covered within the next six weeks or so.
Suppose someone wants to purchase a laser printer that costs $250. The buyer notices a BNPL payment plan that lets them cover the payment in four interest-free installments of $50 each.
The buyer pays $50 during the purchase and immediately receives the laser printer. Then the buyer must pay another $50 every two weeks for six more weeks. If the buyer can’t cover these payments on time before the interest-free period, they will have to pay interest, plus the penalty for late payments. Typically, the fee may go up to 25% from the purchase.
Should You Use Buy Now Pay Later Apps Philippines?
Buyers should consider a few things before using BNPL services. Typically, experts recommend using BNPL only if the expense is 100% necessary. Such expenses include a mattress for a new bed in a home, a computer for school or freelance work, etc.
Before buying something, consider developing a personal financial plan. That way, you won’t buy things you don’t need. Moreover, don’t get too excited with BNPL plans. Even though some services don’t even impose fees and interest rates, it still means you are in debt. The main point here is that you don’t have to go into debt if the purchase is unnecessary.
If you decide to use the BNPL plan, check only those options that have zero to minimal interest. By using such services, you make the monthly burden lighter. It should be easier to pay back a loan.
And the last but not least tip. If you struggle with covering bills, do not use the buy now buy a later plan. It’s extremely easy to buy many things with BNPL, and you won’t even notice how much money you spend. It’s extremely easy to overspend. It’s dangerous since you may pay late and have to face the consequences – fees and increased interest.
BNPL Pros And Cons
What if you want to buy now pay later phones Philippines? Should you opt for such an offer? Before you decide, consider checking the advantages and disadvantages of this option.
Let’s start with advantages:
- No credit score check. Typically, BNPL services don’t require a check when a new user opens an account. In some cases, a BNPL service may perform a soft check.
- Interest-free periods. Some BNPL platforms impose an interest rate and fees; others don’t. However, even if a service does impose an interest rate, a user can benefit from the interest-free period. It means the user can return their debt before the platform charges them a fee.
- Convenience, fast payments. Buyers can buy goods even if they don’t yet have the funds and pay later. At the same time, sellers increase sales and get the full price of the product immediately.
All mentioned features prove that it may be convenient to use BNPL services. However, don’t get too excited so you won’t overpay.
And just like with advantages, BNPL platforms have some significant disadvantages:
- Painful late fees. If a platform imposes late fees, the buyer will have to pay more than expected. Typically, a late fee goes up to 25% of the purchase.
- High-interest rates. As mentioned, not all services have interest, but some do. If a buyer isn’t careful enough, they may pay when the interest-free period is over. As a result, they have to pay more than the initial price.
- Limits. Buyers can’t purchase an expensive product since most platforms have limitations.
- Lack of building credit. If you wish to improve your credit score, you can’t do that with BNPL services. Using these services doesn’t count towards building a positive score.
These are the drawbacks that have to be considered before using BNPL services.
Do Buy Now Pay Later Payment Options Affect The Credit Score?
As mentioned, buy now pay later services don’t affect your credit score. Moreover, most platforms don’t even conduct a serious credit score check. They require paying on time to get the full amount. If the buyer doesn’t pay back, the platform may charge late payment fees.
- In the Philippines, if you don’t pay back the full amount that you owe, your account may be terminated. Moreover, some platforms can ask their client to immediately return the full amount on other purchases (if any) too.
- If the client doesn’t immediately return the owed money, the BNPL platform may sell the debt to collectors. As a result, the borrower faces the consequences and has to live under a lot of pressure. In some cases, this history may affect the person in the future.
- Even though it won’t count for a bad score, if the person asks for a loan, the financial institution may decline the request because of the problem with collectors in the past.
Is The Buy Now Pay Later Different From Credit Or Installment Payments?
Even though BNPL and standard installment plan options seem to be similar, there are significant differences between these three options. When it comes to the BNPL option, there are three participants in the deal:
- the buyer;
- the seller;
- the BNPL platform.
If a buyer wants to use the buy now pay later options, they must find a store that offers the BNPL payment method. For example, Shopee buy now pay later Philippines. The buyer chooses the BNPL payment option and pays around 25% of the purchase. Then the BNPL platform withdraws the next installments from the debit or credit card of the user during the next weeks or months.
However, the seller receives the full purchase price from the BNPL operator to their deposit account without paying any commissions and long queues. Typically, the loan amount is limited by the BNPL platform. For instance, one of the most popular options is PayPal, and it limits its payments to $600. Another popular platform is Afterpay, with a $1500 limitation.
It seems like a dream come true payment option. However, one question arises. How do these platforms gain profit if they don’t raise prices? BNPL platforms gain income from transactions paid by online merchants.
Thanks to the absence of buy now pay later fees, both the seller and the buyer get perks. The seller increases the level of sales and immediately gets a full payment of the purchase, so it doesn’t bother them that they pay for the transaction. And the buyers win since they get the product they want even if they don’t have money at the moment.
Moreover, if the buyer doesn’t have money on a credit or debit card, the service may charge them for late payments. Afterpay uses this option to ensure they get paid while also getting an additional source of income.
Undoubtedly, this method is different from installment payments and how credit cards work. But are there any other major differences?
- Both BNPL platforms and installment plans are free for buyers. In both cases, financial institutions do not charge buyers with commissions and don’t set interest rates. However, BNPL services set shorter repayment periods of borrowed money compared to installment plans.
- BNPL services are typically used by people with rather low or medium incomes. BNPL payment options are more convenient than credit. However, the buyer still doesn’t have to hoard money to make a purchase. BNPL enables a buyer to purchase the goods immediately. It’s a different payment option since asking for a credit or using the installment plan lets buyers buy more expensive products. It’s not the case with BNPL.
- Buyers don’t need to issue specific credit cards, as in the case of the installment plan. Typically, installment plans work in stores that are official partners of the bank or financial institution where the buyer issues the card. BNPL doesn’t even require signing an agreement.
- BNPL doesn’t require checking the buyer’s solvency or income sources.
- BNPL has limitations on the purchases. Yes, credit and an installment plan also have limitations. However, loans and installment plans allow buyers to purchase expensive goods, even a car or a house.
These are the most significant differences between a loan, an installment plan, and a buy now pay later option. Today, internet users prefer to buy now pay later plans since they allow them quickly gain gods without waiting for the salary. They can buy something now, and when they gain their salary, the BNPL platform withdraws the payment from their bank account.
What Services Offer Buy Now Pay Later Options?
If you are interested in buy now pay later plans in the Philippines, consider browsing online stores. You may use the previously mentioned method that requires adding a product to a cart to see at the checking point whether the store offers BNPL plans. You may also use the following BNPL services:
Jungle Philippines buy now pay later also has modern payment options. As well as the following services in the Philippines:
These mentioned services work in the Philippines. They also offer loans and other opportunities, so check them out.