Buy Now Pay Later is the new credit option available for millions of consumers who don’t possess a traditional credit card. Learn more about this scheme to get maximum benefit out of it. 

Credit cards impose strict eligibility criteria and make it difficult for a low income earner to get one. Given the number of benefits one can enjoy with a credit card, many consumers are devoid of the purchasing power similar to a credit card in the current economy. 

What is Buy Now Pay Later or BNPL?

Buy now pay later is a novel credit option primarily offered by e-commerce websites. Under this scheme, the buyer is allotted a certain credit limit that can be used to purchase items on the e-commerce website. This amount shall be paid in EMIs of 3, 6, 9, or 12 months with a nominal interest rate. Based on the customer’s eligibility, they can even get ‘No Cost EMIs’ on the buy now pay later limit for a limited number of months. Though this is widely prevalent with e-commerce websites, retailers are also adapting to this payment method to increase sales and revenue. 

How do I use BNPL for my purchases? 

The buyer is generally required to sign up for this payment method online. You will need to enter your PAN details and bank account details. This is then processed by the finance company, usually partnering with the seller, and your monthly credit limit is generated. 

This credit limit is generally based on your average monthly balance. Since this account is linked to your bank account, the outstanding amount will be deducted directly from your bank account. 

  • When you want to purchase some items from the buyer, you add them to the shopping cart
  • Go to payment screen to find the BNPL option
  • Some purchases may offer you EMI options with the same BNPL method. You could even get 0 cost EMI for some of them
  • Select the BNPL payment method, choose the number of EMIs you want to repay the cost in, and hit enter
  • The billing is completed and your bank account will be debited from the next billing cycle. It is as simple as that. 

Why should you pay for your next purchase using BNPL? 

Here are some advantages of using BNPL for your next purchase: 

  • Get increased credit limit
  • Improve purchasing power of consumers
  • Additional benefits for using BNPL schemes partnering with e-commerce sites
  • Get No Cost EMI offers on festival days and special sale periods
  • Simple application process and total transparency

How can I know if I am eligible for a BNPL scheme?

You can get a BNPL payment option if you meet the following criteria: 

  • You are an Indian resident citizen
  • Minimum 21 years of age
  • Hold a bank account with regular monthly income
  • Valid PAN and Aadhaar number linked to your bank account

Some leading BNPL Finance Providers online


KreditBee offers Buy Now Pay Later personal loans in the range of Rs.1,000 to Rs.2 lakhs. Applicants must submit just the bare minimum of documentation requested by the lender in order for the loan to be disbursed quickly.


EarlySalary provides quick Buy Now Pay Later options, including no-cost EMI. It has partnered with prominent retailers like Amazon and Flipkart to make this offer possible. This lender has a simple repayment system and adjustable repayment terms ranging from 3 to 6 months.


Individuals can get a personal loan from Stashfin to help them with their shopping needs. A maximum loan amount of Rs. 5 lakhs can be obtained. This lender offers repayment terms ranging from 3 to 36 months.


By activating a credit limit, ZestMoney allows applicants to purchase now and pay later. Shopping can be done at partner retailers with low-interest EMIs ranging from nine to twenty-four months. Other benefits of ZestMoney's buy now pay later programme include no foreclosure costs and no processing fees.

What are the key differences between a Credit Card and the BNPL payment method? 

Credit Card

Buy Now Pay Later

Interest rate is pretty high; in the range of 30 – 40% per annum

Interest rate similar to personal loans and hence in the range of 10 – 20%

Not limited to certain retailers or e-commerce websites

Generally partnered with specific retailers and e-commerce websites

Strict eligibility criteria

Eligibility criteria is a little less stringent

Credit limit based on gross monthly salary

Credit limit based on monthly average bank balance

Option to pay just the minimum amount due in a billing cycle

No option to make part payments


Find the top credit card offers in India 2021

To 5 Things to consider before you choose Buy Now Pay Later 

  1. Credit limit you are offered: The credit limit with this financing method is relatively low compared to credit cards. While credit cards offer up to thrice your gross monthly salary as credit limit, BNPL offers credit limits based on your monthly average balance in your bank account. So if you are looking for a higher credit limit, this may not be a good option. 
  2. Range of acceptance: Is your BNPL limited to only one retailer or can you use it in other stores too? Can it be used online as well as at physical merchant locations? If they offer you such benefits, it is a good BNPL scheme and you can take it. 
  3. What kind of interest rate is available: Is the interest rate fixed for all purchases? Or does it depend on my transaction amount? This is another factor for you to look at. 
  4. Repayment options: What are the repayment options I have? Can I prepay or part pay? Are there any pre-closure charges if I want to close the credit line earlier? Confirm these aspects before signing up for the BNPL scheme. 
  5. Additional discounts and rewards: If my BNPL scheme is linked to a particular retailer or seller, am I getting any additional discounts and offers for using that BNPL payment option? What benefit am I getting for signing up for this BNPL option? Find that out too. 

Buy Now Pay Later is here to stay for a long time. This has allowed many buyers to get interest free credit for a month or so. They choose to use this method while their savings earn some interest in the bank account. This is prudent, I would say! But similar to credit cards, if you don’t repay the amount on time every month, you will end up with high interest charges. We can conclude that Buy Now Pay Later is a good payment option for the fiscally responsible individuals. 


FAQ of Buy Now Pay Later

  1. What are the benefits of Buy Now Pay Later?

Buy Now Pay Later is a short term credit scheme that allows you to pay for your purchases online and pay them the next month. 

  1. What happens if I miss a payment on my BNPL account? 

BNPL is similar to a credit card and missing a payment will result in interest charges. This will also be recorded on your credit report and ultimately affect your credit score. 

  1. What are some disadvantages of BNPL?
  • Impulsive spending
  • Overspending
  • High interest charges and late payment fees
  • Low credit limit
  1. Can BNPL affect my credit score?

Though your credit score is not required to determine your eligibility, your transactions will affect your credit score. Any late payments and defaults are recorded under your credit report and can reduce your credit score. 

  1. Do I have to pay interest on BNPL?

Yes, you are charged an interest rate on your BNPL purchases. There might be No Cost EMI offers on special offer days or festival sales.