Effective Strategies to Manage and Pay Off Your Buy Now, Pay Later Loans
Buy now, pay later (BNPL) loans have become a popular financing option for many consumers. They offer the convenience of splitting a purchase into smaller, manageable payments, often without interest. However, managing these payments can sometimes be challenging. Here are five effective strategies to help you stay on top of your BNPL loans and avoid financial pitfalls.
Update Your Budget
Adding a BNPL payment to your budget might seem straightforward, but without proper planning, it can easily be forgotten. This can lead to unexpected fees and interest. Unlike traditional monthly payments, BNPL payments may not follow a 30-day cycle, making it crucial to update your budget accordingly.
If you don’t already have a budget, now is a great time to create one. Track your spending and identify areas where you can cut back to ensure you can meet your BNPL obligations. A well-planned budget can help you avoid financial stress and keep your payments on track.
Set Up Autopay
Many BNPL lenders require automatic payments from your bank account. This means you need to ensure you have sufficient funds to cover the payments. If your BNPL provider doesn’t require autopay, consider setting it up yourself to avoid missing a payment. You can also set reminders or alerts on your phone to ensure you have enough money in your account when payments are due.
It’s important to review the terms of any new BNPL loan, as they can vary between providers. Some apps offer multiple payment options, so make sure you understand when your bills are due. Be cautious about taking on new BNPL loans while paying off existing ones, as this can lead to overextension.
Change Your Payment Due Date
Some BNPL lenders allow you to change your payment due date or extend it, although this service may not always be free. If you prefer your due dates to align with your paychecks, check if your lender offers this option. Keep in mind that you may only be able to request an extension once per four-payment cycle.
Look at Your Other Options
BNPL loans are often used for impulse purchases, with the average loan amount being relatively small. However, if you have multiple BNPL loans or higher limits, you might want to consider other options. A debt consolidation loan could be a better choice if you’re dealing with a significant sum.
If you have a good credit score, you might qualify for a credit card with an introductory 0% interest rate, offering more flexibility for repayment. Evaluate your options to find the best solution for your financial situation.
Reach Out if You Have a Hardship
If you’re struggling to make your BNPL payments, don’t hesitate to contact your lender. Some BNPL providers are willing to work with borrowers facing financial difficulties. It’s better to make arrangements before missing a payment to avoid late fees, account freezes, or damage to your credit score.
More than 10% of BNPL borrowers have been charged late fees, according to a report by the Consumer Financial Protection Bureau (CFPB). If you’re having trouble, reach out to your provider to see what assistance they can offer.
The Bottom Line
Managing BNPL payments effectively can help you avoid fees and interest. While these loans are typically small, juggling multiple payments with different due dates can be challenging. A well-structured budget can help you accommodate occasional unplanned purchases without financial strain.
If you’re looking to finance a purchase and build credit, consider a personal loan as an alternative. At O1ne Mortgage, we offer a range of mortgage services to help you achieve your financial goals. Call us at 213-732-3074 to learn more about how we can assist you with your mortgage needs.
By following these strategies, you can stay on top of your BNPL payments and maintain financial stability. Remember, planning and communication are key to managing your finances effectively.
