Buy now pay later (BNPL) is a payment solution that lets you purchase items from e-commerce platforms without making any upfront payment. You can buy one or more necessary products up to a certain credit limit and repay the utilised amount from the next month in monthly instalments. Before applying for the facility, you must know various essential aspects of BNPL.

How does the BNPL Facility Work?

When individuals buy their necessary item online with the help of this BNPL service, a financial institution which partners with the e-commerce platform pays the bill. Customers simply need to repay the amount within their selected tenure. 

Benefits of Buy Now Pay Later (BNPL)

Following are all the advantages of this payment solution:

• Purchase with zero down payment

You can buy your required items without paying any amount when you choose BNPL as your preferred payment mode. All your bills get converted into small instalments payable from the following month. 

• Interest-free repayment

Some BNPL facility providers entitle you to repay without any interest for purchasing up to a certain value. You can also get seasonal no-cost EMI offers on some selected items available on e-commerce platforms. 

• Availability of Special Offers

Financial institutions offering BNPL service also let you receive special discounts on the sticker price of the product during festive seasons. 

• Cardless purchase

While buying products with BNPL, you just need to enter the OTP sent to your registered mobile number. It lets you avoid providing the card details, reducing your hassles and the overall time of purchase.

Eligibility Criteria to Qualify for BNPL

Applicants need to meet the following eligibility standards to get the payment facility:

• Must be in the age group of 18 to 55
• Should have a bank account
• Needs to be an Indian resident
• Must be a resident from a 1^st or 2^nd tier city

After meeting the eligibility criteria, you must undergo the application process to get the buy now pay later facility.

How to Apply for Buy Now Pay Later

Here are the steps to apply for this BNPL payment solution:

Step 1: Go to the official website of the financial institution that offers this payment facility

Step 2: Get the application form for buy now pay later

Step 3: Enter your personal, professional and income details along with your PAN number

Step 4: Submit the filled-in application form

With this simple application process, you will successfully send your request. After verification, you can see the credit limit offered by the financial institution. 

Documents Required While Applying for BNPL

You also need to keep the below-mentioned required documents handy while applying for the buy now pay later service:

• Income Proof: Salary slip, bank account statement, Form 16, etc.
• Address Proof: Ration card, PAN card, electricity bill etc. 
• ID Proof:Aadhaar card, Voter ID card, PAN card, etc.

In this regard, you also need to know that the BNPL facility has a lower credit limit than credit cards. You may not be able to buy too expensive an item with buy now pay later. Hence, besides securing the BNPL payment facility, you can opt for a Bajaj Finserv EMI card. 

Bajaj Finserv payment card has several additional benefits as well, including pre-approved loans up to Rs. 4 Lakhs, zero foreclosure charges, etc. The application process for the payment card is also straightforward. 

Differences Between BNPL and Credit Card

There are some notable differences between these two payment solutions, as mentioned below:

• Acceptability of the payment solution

You can leverage the BNPL service while purchasing from certain e-commerce platforms only. However, credit card has wider acceptability, and you can purchase from both offline and online stores.

• Difficulty in getting approval

You can get approval on your request for initiating the BNPL services easily without checking the credit score. On the contrary, you need a healthy CIBIL score to qualify for a credit card.

• Interest rate

The annual interest rate can go up to 24% in BNPL instalments. However, you may have to bear an interest rate of up to 48% for buying items on EMIs through a credit card.

• Repayment period

Generally, you get a tenure of up to 90 days to repay your bills on BNPL. Contrarily, credit cards let you get a repayment period between 3 and 24 months.

In conclusion, BNPL lets you buy items from e-commerce websites without any down payment and at a low interest rate. The documentation process and eligibility criteria of BNPL are also lenient. You can be eligible for the facility even with a lower credit score.