Trap To Nahi Buy Now Pay Later: Flipkart-Amazon Sale from 23rd; It is necessary to know the terms and conditions on payment from BNPL, otherwise you may get trapped in the debt trap A to Z Counsel

The countdown has begun for Flipkart’s Big Billion Days (23-30 September) and Amazon’s Great Indian Festival (23 September). Huge discounts will be available on mobile phones, clothes and other electronic items. A separate discount will be available for purchases made with credit cards. At the same time, credit cards have also made the purchase very easy as it offers the facility of payment in EMI.

Apart from this, many online buyers are also using options like Buy Now Pay Later (BNPL) these days. The Buy Now Pay Later (BNPL) service has managed to impress a lot of young buyers. The BNPL scheme looks more attractive than taking a personal loan or credit card. This is because zero percent interest is claimed in it. The process of availing this facility is also easy. Apart from this, payment facility is available in EMI.

BNPL companies give you a moratorium of a few days to repay the loan without interest. However, without knowing its terms, taking advantage of it can be overwhelming. Here we are telling you about the things you should keep in mind before taking advantage of BNPL and what kind of problems you may have to face if you do not pay the money on time.

What is Buy Now Pay Later Service?
BNPL provides the facility to the customers to pay in EMI. In this, zero percent interest rate is claimed. A customer may decide to postpone the purchase due to lack of money while making an online purchase. But with BNPL, the customer can buy the product immediately without paying and he does not need to postpone his purchase.

The BNPL company pays the merchant on behalf of the customer after charging a small transaction fee. Once the lender makes the payment on your behalf, you have to repay the amount within a stipulated time period. It can be paid either in lump sum or as no cost EMI. Flipkart, Amazon and Paytm offer this type of service.

BNPL service facility or trap?
Whether a BNPL service is a facility or a trap depends on how you use it. With the BNPL facility, many people usually end up buying more than they can afford. Due to this many of them are unable to make payments later and fall into debt traps.

If the customer does not make the payment of BNPL on time, then the BNPL companies report it to the credit score agencies and your credit score gets spoiled. This can make it difficult to get the next loan. There is also a penalty for not paying the money on time.

Take advantage of the facility only in case of extreme need
Pankaj Mathpal, personal finance expert and founder and CEO of Optima Money Managers, says that such offers often lead to extravagance. If people make purchases beyond the capacity of their pockets, it becomes difficult for them to repay the loan later. Therefore, buying on credit should be avoided unless absolutely necessary.

How big is the BNPL market in India?
According to Goldman Sachs, the Indian e-commerce industry is expected to reach $99 billion by 2024. According to Worldpay’s Global Payments Report, BNPL will increase to 9% by 2024 from the current 3%. If online purchase or e-commerce industry increases, then BNPL will also increase.