Buy Now, Pay Later (BNPL) has become an emerging online payment form over the last 2-3 years. While these plans offer instant, no-cost financing, it’s important to understand what they mean for your credit score.
Indeed, BNPL can also be offered to people with low credit ratings, said Nitin Mathur, CEO of Tavaga Advisory Services, in an interview with CNBC-TV18.
“Additionally, BNPL has captured the attention of regulators and the credit industry and is expected to soon play a leading role in consumer credit ratings,” he said.
“Traditional loans can require a relatively complicated and more paper-heavy process with low chances of approval for someone with no or low credit score, which BNPL does not,” said Anshuman Narain, Vice President of CashBean.
However, it is important to check here that before availing BNPL, one must understand the underlying risks of this option.
Thus, before availing loans through BNPL, individuals should ensure that they are not putting their credit rating at risk.
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First post: STI
