- KredX Editorial Team
- 29 Apr 22
- Buy Now Pay Later

Consumer loans are advances that lending institutions offer to finance different purchases. These loans can be secured (backed by assets) or unsecured (not backed by assets). Mortgage loans, auto loans, personal loans, student loans or even credit cards qualify as consumer loans.
During the pandemic, the consumer lending sector suddenly saw a rise when Buy Now Pay Later (BNPL) was introduced. The pandemic forced more people to adopt an online mode of shopping and helped grow the e-commerce market. Those who are wondering if Buy Now Pay Later is a consumer loan must know that BNPL usually does not charge interest for purchasing and does not require a minimum monthly payment.
This is where it differs from credit cards, a form of consumer loan. This piece focuses on explaining BNPL consumer loans and their distinctive features.
Buy Now Pay Later- A Brief Overview
Buy Now Pay Later is a credit facility that allows consumers to buy products without any upfront payment and pay later at a future date. This credit facility benefits both consumers and merchants as both parties receive products and money respectively without delay. Wondering how? This is possible as the BNPL provider acts as an intermediary between these two parties that offers money to merchants on behalf of customers and enables customers to purchase products. Remember, here; consumers can mean both the general public and business buyer. It means BNPL is operational in both B2C and B2B sectors. BNPL is a type of consumer loan since it helps consumers (including business buyers) purchase products. However, specific characteristics set this credit facility apart from other available forms of consumer loans.Features of Buy Now Pay Later
Here is a list of features of the BNPL credit facility,- No Collateral Required
- Documentation
- No Upfront Payment
- Interest Charges
Benefits of Buy Now Pay Later
Below is a list of benefits that Buy Now Credit Facility offers.- Convenience: One of the biggest advantages of BNPL is convenience. By simply downloading an app, buyers can avail this credit facility. Further, by offering this payment option at the point-of-sale, merchants can easily attract more customers, increase sales and manage stocks.
- Interest-free Window: Another advantage buyers can enjoy the interest-free window. For instalment payments, business persons need not pay any interest charges.
- Relaxed Eligibility Criteria: Any business buyer or consumer can purchase through Buy Now Pay Later. Buyers are required to complete simple KYC formalities to utilise the benefits.