“Buy now, pay later“Installment payments” is a type of payment plan available at most retailers that allows you to split the cost of a purchase into equal payments.
Called BNPL for short, these plans often have no interest and minimal fees, and can be used for shopping online or in-store, depending on the app.
Here are six of the top BNPL apps, plus some alternatives to consider.
Assert
5.0
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Affirm offers a wide range of BNPL plans, including quarterly and monthly payments, with no fees.
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How to Get Approved by Affirm
Affirm runs a soft credit check, which will not negatively impact your credit, and may also take into account your past payment history with Affirm, how long you've had your Affirm account, any outstanding Affirm loans, your credit utilization ratio, your current debt and income, and whether you have any bankruptcies.
Afterpay
4.0
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Afterpay offers quarterly and monthly payment plans. If you pay on time there is no charge to use Afterpay. Missed payments incur late fees of up to $8.
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How to get approved for Afterpay
Afterpay runs a soft credit check, which does not affect your credit score. As part of the approval process, Afterpay may also take into account whether you have sufficient funds on your debit or credit card, how long you've had Afterpay, the purchase price and whether you have any other outstanding loans with Afterpay.
Klarna
4.5
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Klarna offers 4 installment plans, 30 installment plans, and monthly payment plans. There are late fees for late payments, an undisclosed service fee if you use a one-time virtual card at a store not affiliated with Klarna, and there may also be a payment rescheduling fee.
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How to get approved by Klarna
Klarna operates a soft credit check so your credit score and credit history are taken into account when making approval decisions, and they also favour applicants who make timely payments to Klarna.
PayPal
4.0
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PayPal offers quarterly and monthly payment plans for online purchases. PayPal does not charge any fees.
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How to get approved by PayPal
PayPal performs a soft credit check and approval is based on several factors, including your PayPal account history and information provided by credit reporting agencies.
Sezzle
4.0
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Sezzle offers a four installment plan, a two installment plan, and a monthly payment plan. Sezzle charges various fees, including a late fee if you miss a payment, a fee for paying by debit or credit card (after the first installment), a rescheduling fee if you change your payment date more than once per order, and a failed payment fee if Sezzle fails to receive your payment.
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How to get approved for Sezzle
Sezzle performs a soft credit check, which does not affect your credit score. Your past history with Sezzle and the information from the soft credit check are taken into account when determining your spending limit.
Zip
3.5
NerdWallet Review
NerdWallet ratings are determined by our editorial team, and the scoring formula incorporates coverage options, customer experience, customizability, cost, and more.
Zip's 4-payment plan is available wherever Visa is accepted. Zip charges an installment fee for using the 4-payment plan, a late fee for any missed payments, and a rescheduling fee if you reschedule more than one payment per calendar month.
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How to get approved for Zip
Zip does conduct soft credit checks, and beyond that, the company doesn't disclose how it approves customers, but says it takes a variety of factors into account.
Compare buy now, pay later apps
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Should you use a “buy now, pay later” app?
NerdWallet recommends paying for non-essential purchases with cash whenever possible, and while BNPL may seem like a convenient payment method, it's still a form of debt.
Consider these pros and cons when deciding whether to apply for a deferred payment offer.
Strong Points
Interest-free financing: Most BNPL apps charge zero interest on your loan over four installments, meaning you can use the service for free if you make all your payments on time. Interest-free financing is rare, especially when it comes to buying big-ticket items like computers.
No strict credit check: Unlike applying for a credit card or loan, BNPL apps typically Hard Credit Pullthis may temporarily lower your score, and if you're worried about having a low credit score, you may find it easier to get approved with a BNPL app than with a traditional lender.
Simple, convenient and fast funding options: BNPL apps pride themselves on the simplicity and ease of use of their payment plans – they’re often integrated directly into the checkout process, applications are short, and approval decisions are instant, meaning you can choose a BNPL payment plan within minutes.
Cons
These factors can contribute to overspending: BNPL plans make shoppers feel like they're paying less than they actually are — for example, if your budget is $100 and you choose a four-month payment plan, you only pay $25 up front — which may motivate some shoppers to go back and add more items to their cart.
You are less likely to build credit: Most BNPL companies don't regularly report on-time payments to the three major credit bureaus, so using these plans won't help you build credit — though they may send late-paid accounts to collection agencies, which could hurt your credit score.
Fee: While some BNPL apps don't charge fees, many do, especially if you miss a payment. Fees can range from $2 to $15 and can be a significant percentage of the total price, increasing the cost of your purchase.
Customer Service Issues: Some BNPL users have trouble resolving disputes: For example, if they buy an item that needs to be returned, they have to negotiate with the store directly, even though the loan is made through a BNPL lender, which can delay refunds.
On May 22, 2024, the Consumer Financial Protection Bureau issued an interpretive rule stating that BNPL lenders are considered credit card providers. This gives shoppers additional protections, such as the right to receive a refund after returning an item and the right to dispute a charge.
How to get the BNPL app
When you shop with BNPL, there are two main ways to access these payment plans.
Download your provider's mobile app
BNPL mobile apps can be downloaded onto your phone from the Apple or Google Play app stores. Once you have the app, you can create an account and receive an initial spending limit (often referred to as “buying power” or “spending power”). You can shop online directly from the app, or if you want to shop in-store, you can create a one-time virtual card that you can store in a mobile wallet on your phone and scan at the register.
Shop online at our partner stores
Some stores offer BNPL payment plans during online checkout. When you proceed to pay, you'll see the option to split your purchase into smaller amounts using a BNPL provider like Affirm or Afterpay. You'll need to log in to your account or fill out a short application to create one. You'll receive an approval decision immediately.
Buy now, pay later alternatives
While buy now, pay later offers a simple and convenient way to finance your purchase, it doesn't offer the same perks as other financing methods. We encourage you to explore these alternatives.
0% Interest Credit Card: If you have good or excellent credit (credit score 690 or above), 0% APR credit cardWith a credit card, you'll pay no interest during the card's initial life (usually 15 to 21 months), credit card companies will report your payments to credit bureaus, helping you build credit, and you may get sign-up bonuses and access to rewards programs.
Small personal loans: If you want a longer repayment period, Small personal loans It could be a smart choice. Loans are available to borrowers of all credit levels, and like credit cards, they show credit bureaus a history of on-time payments. Personal loans do charge interest, but the longer term means monthly payments are more likely to fit into your budget.