The BNPL scheme has gained popularity among consumers, especially during the pandemic. So, many banks and NBFCs have introduced NBFCs to cater to the financial needs of the customers. But, defaulting on BNPL has negative consequences just like late repayments of other loans. So, read on to find out what happens when you miss your BNPL payments? 

How Does BNPL Work?

  • Buy a product or service at an online or e-commerce store
  • There is a Buy Now Pay Later option available at the checkout time
  • You can pay some in down cash
  • The rest can be paid in EMIS to the retailer
This helps customers purchase with ease and brands to retain as well as expand their customer base. Transparency, accessibility, and No-Cost EMIS have made BNPL schemes popular. 

Some of the BNPL players in the Indian market are:

  • ZestMoney
  • LazyPay
  • Simpl
  • Amazon Pay Later
  • Ola Money Postpaid
  • Paytm Postpaid
  • Flexmoney
  • EPayLater
  • Capital Float
  • Mobikwik Zip
  • KrazyBee 
  • Flipkart PayLater 

Who do BNPL Lenders Generally Focus On? 

Credit Score is one of the most important parameters based on which lenders assess whether to provide credit or not to the borrower. But, there is a new sector of young borrowers cropping up in India. They are mostly first timers and have not taken any loans in the past. Thus they do not have any credit score. Such people are often the primary focus of BNPL lenders. BNPL is a short term credit offered for a period of 15 to 45 days, and the borrower is required to repay the entire amount after this tenure. Just because it is a small credit, it does not mean that defaulting will not have any negative consequences. 

Additional Read: Credit cards versus BNPL - Which is the better choice? 

Consequences When You Miss Your BNPL Payments 


Often, defaults on BNPL payments come with interests and late payment charges.  

Look at the following examples:

  • For instance, take ICICI Bank’s Pay Later. If the total amount due is not paid on or before the payment due date, then the customer is liable to pay the amount along with late payment charges and default interest. 
  • Most BNPL schemes offer a smaller repayment tenure of 15 to 45 days. Online platforms, such as Postpaid,  Ola Money Postpaid, Amazon Pay Later, and Flipkart PayLater charge up to ₹600 fees if the borrower misses the deadline payments.
  • Flipkart's Pay Later levies late payment charges in the range of  Rs 60- Rs 600 for bill amounts varying from Rs 100 to Rs 5,000 and above. LazyPay users are charged a penalty fee of Rs. 15 per day. 
  • Some BNPL lenders charge interest rates ranging from 2-3 per cent per month. For example, Paytm charges its customers 3 percent interest on outstanding amount for extension of due date by a month. 

Here is a list of late fees levied by various BNPL Companies 



Late Fees  


Rs. 250 + 1% per day on late repayments


Rs 50 to 500 per cycle default 


Rs 250 per cycle default 

Amazon Pay Later 

Rs 100 to 500 per cycle default 

Paytm Postpaid 

Rs 10 to 500 per cycle default 


Rs. 500 + 0.2% penalty charge per day 

Mobikwik Zip

Rs. 20 to 200 per cycle default + 1% late fee after 3rd cycle 

FlipKart PayLater 

Rs 60 to 600 per cycle default 


Rs 100 per cycle default 

Affects Your Credit Score

Just like the lender reports to the credit bureaus when any other loan is taken, he informs the bureau when credit is given under BNPL (which is offered in partnership with banks and NBFCs). Availing credit under BNPL thus has an impact on the credit report and credit history of the person. Similarly defaulting on BNPL will also affect your credit score. It not only affects the credit history but also adds to debt. Besides, it will have a negative impact on the future access to credit as well. 

Final Words: The Future of BNPL 

BNPL has a bright future. Convenience and affordability make BNPL very popular among customers. They can instantly buy a product or service of their choice and defer the payments with no cost EMI options. However, BNPL is still a loan, and when you miss your BNPL payments, it will have negative consequences as discussed above. So, you must use the facility well and make payments on time. 

FAQS of What happens when you miss your BNPL Payments?

1) Do you pay interest when you use BNPL?

When you use BNPL, you will not pay interest. But, every BNPL provider will charge fees for using their service.

 2) What will happen if a LazyPay user does not pay LazyPay?

If the LazyPay user fails to pay the amount, PayU can suspend  the LazyPay account and notify the merchants and third party banks/financial institutions. 

 3) How do Buy Now Pay Later providers earn money?

Merchants usually pay BNPL providers in the range of 2 to 8   percent of the purchase amount. Some providers also charge money per transaction. Some BNPL companies like credit card issuers pay the vendors in full and redeem the money from the customers. 

 4) What is the range of the amount that a customer can pay through BNPL? What is the tenure of repayment of the BNPL credit?

    The amount that a customer can pay through BNPL lies in the range of Rs.500 to Rs. 30,000. The interest free period lies between 15 and 45 days. 

 5) What are some of the best BNPL apps of 2022?

Some of the best BNPL Apps in the Indian market are:

  • LazyPay
  • Simpl Pay Later
  • Bullet Pay Later
  • Paytm Postpaid
  • Amazon Pay Later     

    6) What are the key features of the Amazon Pay Later App?

  • Shop on Amazon with Pay Later and pay your amount in interest free EMIs.
  • Pay your mobile, water, and electricity bills 
  • 30-day interest-free repayment cycle
  • Maximum limit of up to ₹60,000

  7) How does Buy Now Pay 6 months later work?

     Buy Now Pay Later is a simple concept. Instead of you paying the retailer, the BNPL provider will pay the retailer. You will then pay the retailer in full. It is all about spreading the cost of your purchase.