Buy now pay later v/s Personal loan: Buy Now, Pay Later (BNPL) is a sort of short-term financing that allows clients to make purchases and pay for the purchase later, usually without interest. BNPL agreements, often called as “point of sale installment loans,” are quickly becoming popular as a form of payment, especially for internet purchases.
Personal loans and credit cards were our main options for unsecured credit products until a few years ago. Buy Now, Pay Later loans are now available from merchants and fintech companies. The relevant borrowers can access these options with only a few touches on their phone displays. Fill out your personal information, complete the KYC process, and you could have your loan approved in minutes.
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Know BNPL and how does it work?
- The only practical distinction between BNPL service providers is in their terms and conditions. This is how it usually works:
- Make a purchase from a partner store.
- It is best to choose the “Buy now, pay later” option.
- Put down a small part of the overall purchasing price.
- The outstanding amount will be deducted through a series of interest-free EMIs.
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BNPL v/s personal loan:
- BNPL provides a maximum loan of Rs 1 lakh, whereas Personal Loan provides a maximum loan of Rs 25 lakh.
- BNPL solely provides secured loans, whereas Personal Loans provides both secured and unsecured loans.
- Because of its low paperwork requirements and broad eligibility, BNPL has become a popular affordable payment alternative.
- Because there are no restrictions on end usage, a personal loan is an ideal solution for financing big or unexpected needs.
- The majority of BNPL lenders provide interest-free EMI repayment plans.
- The interest rate on a personal loan is fixed. When it comes to BNPL, though, things are considerably different.
- A personal loan typically has a duration of 12 to 84 months, but a BNPL has a term of 15 days to 3 months.
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