How does Buy Now Pay Later help your Business?

BNPL or Buy Now Pay Later is a direct micro loan with a specified limit that facilitates budget-conscious buyers who opt for small-ticket buying and repaying the amount they have borrowed later on. It is not a secured loan and must be paid within a repayment cycle of 14 – 90 days, primarily as EMIs free from interest depending on loan terms.

The credit providers of BNPL use technology to understand the consumer’s buying behavior along with the repayment history. This assists them in assessing the borrower’s creditworthiness and expending the loan within a few minutes. The credit providers can also enhance or reduce the credit limit based on consumers’ repayment capacity, buying nature, and other factors.

Advantages of BNPL

The advantages of BNPL are

  • Direct access to credit
  • Reliable tenure for repayment
  • Enhances affordability without affecting your monthly budget
  • Safe digital process
  • Various options for no-cost EMI

How personal loans and BNPL are different?

  • BNPL is a microloan solution for making eligible purchases. At the same time, personal loans are required for emergency purposes, buying big-ticket items, and for both planned and unplanned expenses.
  • Burrowers can obtain BNPL credit up to 1 lakh based on their creditworthiness, and for personal loans, borrowers can get up to 25 lakh or more.
  • BNPL loans are often unsecured, but personal loans are both unsecured and secured.
  • The repayment tenure for BNPL loans ranges from 14 to 90 days, and for personal loans, it is between 2 months to 60 months.
  • With BNPL, there is no cost EMI, but with a personal loan, EMI consists of principal plus interest components.
  • The credit facility is available online for grocery, e-commerce, travel booking, food ordering, and other websites, but with personal loans, banks and other financial institutions provide credit.
  • BNPL is an interest-free loan but for personal loans interest rate initiates from 11%.
  • In the case of BNPL loans, consumers’ purchasing patterns and payment history are appraised digitally to assess their creditworthiness. But for personal loans, consumers’ credit scores and repaying ability are evaluated to determine their creditworthiness.
  • For BNPL loans, lenders have to pay the amount to the merchant for the consumer but in the case of personal loans, the amount is placed in the bank account of the consumer to be utilized as they are pleased.
  • There is a usage restriction for BNPL loans, but for personal loans, there are no restrictions.

How is BNPL different from a credit card?

  • BNPL is transparent, but personal loans carry some hidden charges
  • Credit history is not needed for BNPL loans, but good credit history is required for obtaining personal loans.
  • Some e-retailers and fintech companies offer BNPL loans, but many banks and financial institutions provide personal loans.
  • BNPL is an interest-free loan, but with credit cards, you will get 50 days of interest-free credit.
  • With a BNPL loan, you have to pay a fixed amount of EMI by the due date, but with personal loans, you don’t have to pay the minimum due amount, and you can roll over the outstanding balance to next month.
  • You will not get any benefits like cashbacks or reward points with BNPL loans, but you will get them with a credit card.
  • BNPL loans offer low credit limits, but personal loans offer high spending limits.


What should you select? Buy now, pay later, or credit card or personal loan.

You should choose based on your requirements, eligibility, and repaying ability. It is essential to keep in mind that if you cannot make repayments on time in any of these credit options, you have to pay a heavy amount. 

To summarize, credit cards and BNPL are the best options for every small ticket expense. But when you have to choose between BNPL and credit card, the latter is the best option because of all its flexibility and advantages. And when you are required to buy a small ticket item, and you can pay the amount using your next month’s salary without affecting your budget, then BNPL is the best option.

When your requirement is significant, including multiple-fold expenditures, both planned and unplanned, and you require some time to pay it back, then a personal loan is the best choice. You can opt for a personal loan for a high loan amount, low-interest rate, and reliable loan tenure.