10/25/2025
A buy now, pay later (or BNPL) loan is a form of short-term financing that allows consumers to pay their bill incrementally over several weeks or even months, rather than all at once. Most BNPL services offer “pay-in-four” installment plans, which set payments two to four weeks apart, matching many people’s pay periods.
Unlike credit cards, BNPL plans typically don’t charge interest. And providers don’t run a hard credit check, so the loans are particularly attractive if you have bad credit or no credit history. The pay-in-four plan doesn’t usually include interest, but BNPL plans with longer repayment terms can charge annual percentage rates as high as 36%.
You could also be hit with late or rescheduling fees, which can be $10 or more depending on your provider.
According to a 2025 survey, nearly half of Americans have used a BNPL service like Klarna or Affirm and close to a quarter (23%) have had three or more active BNPL loans at one time.
First introduced in 2019, the BNPL phenomenon has grown from standalone providers to retailers like Walmart and Apple, and even online giants like Amazon and DoorDash.
An estimated 91.5 million Americans will use BNPL in 2025.
But that same convenience can make them a risky proposition if you’re not confident you can make timely payments. BNPL loans can cloud your idea of your budget, or tempt you to take out multiple short-term loans at once. 23% of BNPL users had three or more loans active at one time and 41% paid one of their BNPL bills late.
In addition, returning items bought via BNPL can be difficult, so make sure you’re certain about your purchases.
